Optimizing
Cost–
Efficiency

Watch Graham’s perspective on productivity and efficiencyPlay Video

Watch Graham’s perspective on productivity and efficiencyPlay Video

Themes

Maximizing the impact of our funding partners’ investment goes far beyond reducing and avoiding costs. The drivers of efficiency are woven into all aspects of our work, whether we’re simplifying the donation experience, implementing new productivity measures or enhancing our facilities to create better experiences for donors and employees.

Digitizing the collection environment

In shifting our blood collection sites from paper-based to digital information gathering, we’re creating a smoother experience for donors. At the same time, we’re boosting efficiency and enabling data analytics that will help us provide an even better donor experience. We’re proud to be a global leader in this area of automated supply chain management.

A landmark transition

Over a single weekend in July 2016, our blood collection sites across the country were dramatically transformed as we migrated from gathering data on paper forms to using digital technology to manage and monitor the first steps in the donation process. Migrations like these are usually rolled out in stages, allowing incremental testing and refinement. In our case, a phased approach was not an option: to maintain our standards for quality and safety, our underlying blood management information system can only track progress within a single operating model across the collection and manufacturing network.

Thanks to many months of close collaboration among our teams, the cutover began early on a Saturday and was completed with minimal problems. By Monday morning, we’d begun a new chapter in the efficient management of our collection environment and established a benchmark for blood operators worldwide.

Leaving paper behind

Our collection sites used to rely on paper-based information gathering in a complicated, multi-step process that was susceptible to errors; this would often create delays as we paused later to make corrections. Now donor information is captured more accurately from the outset using a digital form — either at the collection site, on a tablet, or using an online form that donors can fill out before their visit. Specially trained donor care associates and other collection staff members then make additions to that single record at each stage in the process. The result is a simpler and faster experience for the donor, improved quality and safety through fewer errors, and a more efficient and data-rich process for our collection teams.

Of course, getting used to a new system can take time. When we first introduced digital forms, the time donors spent moving through the collection process rose at about 30 per cent of our sites. Significantly, though, donor satisfaction levels remained steady — a testament to the efforts of staff to facilitate the transition, as well as the recognition by most donors that this was a welcome improvement worth supporting.

Going digital benefits everyone

As this automation initiative continues to unfold, within a broader digital strategy we will continue to implement over several years, we’re seeing real benefits in our blood collection sites, the “front end” of our supply chain. In terms of quality management, far more donor questionnaires now enter the system properly completed, cutting down on delay and duplicated effort. At the same time, capturing timely, accurate data electronically on hundreds of thousands of donations enables us to analyze this data much more deeply and pinpoint areas for improvement.

For example, when high numbers of donors arrive at collection sites during the first hour of operation, we can update our online appointment templates to smooth out traffic and adjust our staffing schedules to better match demand. And with staff now adding technical data such as donors’ hemoglobin levels to digital records, we’re able to better personalize appointment scheduling — for example, letting a female donor know about the longer prescribed wait time between donations, rather than having her arrive at a site only to be deferred from donating until a later date. We’re also equipping donors to be more proactive in gauging and maintaining their eligibility to donate — for instance, by providing information on our website about the body’s need for more iron after donation to maintain optimum hemoglobin levels.

As donors and employees alike become more comfortable with the new technology and processes, we expect to see continued improvements in quality, productivity and the overall donation experience — at the critical entry point for a supply chain that serves all of Canada’s health systems.

Advanced systems and applications are driving our multi-year digital strategy — but technology is ultimately just a tool for transforming how we communicate, collaborate and engage across the organization. By collecting, sharing, analyzing and leveraging data more effectively, we’ll create better experiences for our donors, improve quality and productivity across our operations and deliver superior products and services to all Canadians.

– Ralph Michaelis, Chief Information Officer, Canadian Blood Services

Boosting our productivity

We’re integrating continuous improvement into our day-to-day activities, applying lean management principles with a rigorous focus on meeting customer needs. This collective effort is transforming every area of our operations, and the promising results achieved to date clearly show we’re delivering value to Canadians. As a publicly funded organization, anything we do to boost productivity and efficiency helps to reduce the overall cost of health care.

Learning from the best

In 2015, as part of our long-term strategy to boost productivity and better serve our hospital customers, Canadian Blood Services formed a unique partnership with Toyota Canada. Our goal was to adapt the automaker’s proven approach to engaging front-line employees in creating a culture of continuous improvement. In a yearlong collaboration at our Brampton, Ontario, facility (as detailed in last year’s annual report), Toyota representatives worked alongside our teams, studying how our production areas were organized and then conducting step-by-step analyses to identify sources of waste, as well as activities that were not adding value for our hospital customers. This led to a complete rethinking of many aspects of our operations as we adopted lean management techniques and aligned our everyday decision-making with the broader principles of the Toyota Production System.

The productivity gains at Brampton were immediate and tangible. In hospital order fulfilment, for instance, our redesigned pick-and-pack process reduced lead times by more than 40 per cent. Overall operational availability — the ratio between actual and potential output — has risen from below 50 per cent to more than 80 per cent thanks to new standardized work processes and other lean measures.

Taking it across the country

Over the past year, we began leveraging the lessons of our continuing partnership with Toyota across Canadian Blood Services. The productivity tools and techniques we’ve introduced to date are enhancing the experience of hospital customers served by our other major production and distribution sites in Vancouver, Calgary and Dartmouth. We’ve appointed lean managers for each region, and we’re creating a lean operations group to coordinate efforts and ensure consistent standards, applications and training programs across the organization.

The strategy we’ve adopted at each site is to focus on a narrow area of potential improvement and drill down deep, determining exactly which productivity factors drive customer satisfaction and how they can be improved. After defining where we are and where we want to go, we then establish key performance indicators for measuring our progress toward an interim target state.

By honing in on specific areas of our processes and setting clear indicators of progress — and critically, by engaging front-line employees in this work, inviting their ideas on how to improve things — we’re building the foundation we need to pursue our ambitious customer service and productivity goals.

We’ve got the right skills and capabilities. We have relevant tools and techniques informed by sound philosophical principles — and just as importantly, reflecting the engagement of front-line team members. We’re already seeing direct, outcome-based evidence of success across the supply chain, and we expect that to continue over the next fiscal year.

– Rick Prinzen, Chief Supply Chain Officer, Canadian Blood Services

Enhancing our facilities

Our multi-year National Facilities Redevelopment Program moves us forward in three vital areas — quality, productivity and service — while creating healthy, attractive environments for our donors and employees. By replacing outdated and inefficient sites with purpose-built facilities, we’re meeting the long-term needs of Canadians in every part of the country.

Building a new hub in Calgary

Over the past year, planning for our new production, testing and distribution facility in Calgary steadily gained momentum, culminating in a groundbreaking ceremony in May 2017. The facility will consolidate operations from our current Calgary location, as well as sites in Edmonton and Regina, into an advanced biologics manufacturing environment. It has been designed to optimize productivity, quality and service while maintaining the highest global standards for employee engagement, safety and environmental sensitivity. Serving as a regional hub for Alberta, Saskatchewan and Manitoba, the new facility will process about 24 per cent of the whole blood we collect nationally, or just over 4,000 units per week.

The new building is being designed to achieve Gold-level LEED (Leadership in Energy and Environmental Design) certification, meeting up to 25 per cent of its energy needs with a solar-panel array that will be the largest of any building in the city. The facility will offer a better work environment for about 180 employees who until now have had to creatively adapt systems and processes to fit a converted downtown office space. Expected to be fully operational by 2020, this new site represents another milestone in our commitment to reshape the blood system supply chain, investing today in the lifesaving products our stakeholders will need tomorrow.

Testing moves to Brampton

As the fiscal year drew to a close, final preparations were underway to shift our largest testing operation from a heritage building in downtown Toronto to our five-year-old facility in suburban Brampton. The move, in July 2017, marked the substantial completion of the first phase of our National Facilities Redevelopment Program. All blood and blood products for Central and Eastern Canada will now be tested in a laboratory environment that is efficiently integrated with other Brampton operations. (Our new Calgary facility, which will provide testing services for British Columbia, Alberta, Saskatchewan and Manitoba, will also provide backup for the Brampton testing site.)

The first phase of our work to transform our facilities included frequent communications with employees through various channels to build engagement and support (a strength of Canadian Blood Services highlighted in the 2013 performance review conducted by EY). The second phase of the program is focused on updating and optimizing our infrastructure in Western Canada.

We’ve designed our new Calgary facility to reflect the highest standards in biologics manufacturing, applying lean management principles to ensure unidirectional workflows, clear lines of sight and improved throughputs — with the ultimate goal of serving our hospital customers better. And we’re managing all of this while staying on time and within budget.

– Rick Prinzen, Chief Supply Chain Officer, Canadian Blood Services

Managing cost-efficiency

We feel the fiscal pressures facing Canada’s interrelated health systems. With a budget for fresh blood products that has stayed flat or decreased seven years in a row, we’ve found savings through productivity initiatives, cost reduction and technology improvements. We’ll continue working with provincial and territorial health ministries and our other partners to identify and implement innovative cost-management solutions.

Saving $170 million

In 2008, Canadian Blood Services committed to saving or avoiding $70 million in costs within the next three fiscal years. EY subsequently confirmed, in its 2013 performance review, that we had achieved this goal by the end of 2011–2012. At that point we set an ambitious objective of $50 million in further savings, and then doubled our target to $100 million the following year.

As of the end of 2016–2017, we’ve reached the $38-million mark in our journey to $100 million. Of the many cost-saving and productivity measures implemented across our organization, a few examples are worth highlighting:

Digital enhancements such as the ability to book donation appointments online or via the GiveBlood mobile app not only improve the efficiency of our operations but also respond to donors’ changing expectations around how they want to communicate, and how they prefer to manage their busy lives. And by reorganizing our regional recruitment structure to support more productive workflows, we’ve been able to recruit donors with fewer staff.

Our Automated Supply Chain initiative is simplifying all aspects of blood collection through better process design and technology-driven productivity; this will ultimately mean fewer people will be required for the same amount of work. One area where we've significantly improved our efficiency is large-volume platelet collection, which requires fewer donations to achieve the same total quantity. Large-volume donations accounted for 82.5 per cent of apheresis platelet collection in 2016–2017 — more than double the rate four years earlier. We met our annual platelet target with nearly 7,000 fewer donor visits.

We have also been pursuing cost savings and avoidance with providers of everything from production and testing equipment to biohazard waste and janitorial services. To cite one concrete example: in seeking more cost-effective consumable products for our collection sites — while maintaining our rigorous quality and safety standards — we’ve reduced the unit cost of blood bags by 53 per cent and saved 57 per cent on platelet packs.

Plasma protein products

While Canadian Blood Services has been very successful in managing costs over which we have direct oversight — for fresh blood products, stem cells, cord blood, organ donation and transplantation, and diagnostic services — the cost of plasma protein products (PPPs) presents a unique set of challenges. There are two factors where we directly manage the risk: the unit price per product and our exposure to fluctuations in foreign exchange rates on purchases made outside Canada. However, the cost of PPPs continues to rise as physicians’ prescribing practices evolve and patient demand steadily increases.

We’ve advocated a collaborative approach to optimizing utilization of PPPs, bringing together ministries of health, hospitals, health authorities, prescribing physicians and patient groups with our own medical, financial and supply chain experts. We’ll be extending these conversations in the coming year.

In the meantime, we continue to tightly manage the costs of these products, which accounted for $678 million or about 55 per cent of our 2016–2017 operating budget. Year over year, the cost of PPPs rose by almost nine per cent, largely due to increased utilization.

We also continue to leverage the strong market presence of Canadian Blood Services — as a major bulk purchaser of biological drugs on behalf of the provinces and territories — to secure the best possible pricing and terms. Through competitive tendering in 2013, we were able to achieve more than $600 million in cost reductions and avoidance over five years. This effectively reduced the prices of PPPs to 2009 levels or lower.

In the past year, through competitive tendering, we realized an additional $20 million in savings on specialized products for patients with bleeding disorders. Our competitive tendering process significantly reduced unit costs, and final pricing was set in Canadian dollars for some products to protect against costly currency fluctuations. We’ve also begun a new vendor proposal process, expected to conclude in the fall of 2017, which could have a significant impact on the future cost of PPPs. As always, our goal is to achieve the best possible return on investment as we work with our government and health-system partners to balance the realities of fiscal restraint with our collective commitment to deliver responsive, effective patient care.

Canadian Blood Services has made great strides in improving productivity and reducing costs, and we’re committed to going even further through a carefully managed balance of process improvement, cost containment, innovation, technology implementation and value-based procurement.

– Pauline Port, Chief Financial Officer and Vice-President, Corporate Services