A common problem that critical access hospitals face is access to resources to improve and have time to take control
of any problems they encounter. The Fallon Medical Center located in Baker, Montana remodeled a section of their
facility and relocated the purchasing and supplies department into this new area. With the available resources of 1.5
full-time equivalents, proper planning was limited and the overall project remained unfinished. The Montana Office of Rural Health received a FLEX grant which was used to fund a Lean Healthcare Process Improvement program. 

Efficiency Improvement within Supplies Inventory at a Critical Access Hospital

Charlie Bartram, Alex Bones and Durward K. Sobek II
Department of Mechanical and Industrial Engineering
Montana State University
Bozeman, Montana 59717-3800 USA


Critical Access Hospitals (CAH’s) are small hospitals (25 beds or fewer), which meet specific criteria developed by
the Centers for Medicare and Medicaid Services. They are often located in rural communities, which have a
disproportionately high number of uninsured, underinsured and Medicare patients. As such, CAH’s face significant
challenges in meeting the growing demands of the current healthcare climate with limited resources. One such
facility located in Baker, Montana had recently relocated the supplies inventory within the hospital and faced the
problem of a time and cost efficient organization of the department. As part of a two-week rapid improvement
event, the storage design was analyzed, and a visual representation created which depicted graphically the current
travel, pick locations, and resulting wastes. The visualizations helped garner consensus as to the main areas of
inefficiency, and helped determine alternatives in how to reorganize the department. The agreed upon design
grouped items by hospital department and brought high frequency picked items to the front of the storage area,
located in easy-to-reach shelf locations, with a designated and labeled location for each item. The implemented
reorganization resulted in approximately 50% travel distance and 70% search time savings.


overview of project