Operational logistics wins accolades for health services provider

The first of its kind in Australia, healthcare services provider Aspen Medical has been rated the second fastest growing company in Australia and is a recent winner of the 2007 ACT Hudson Telstra Business Award.

In its fifth year, the dynamic young company has a turnover of over $40 million per annum and more than 250 people providing immediate, global healthcare services in remote areas around the world and those with high demand.

Co-founded by lifelong friends, logistics expert Glenn Keys and clinician Andrew Walker, the vision of the business is to be the preferred supplier of outsourced health services from medical staff to facilities, equipment and procedures in emergency or high demand situations and remote locations.

In East Timor early 2006, Aspen Medical was recruited to set up an operational hospital from scratch, which it achieved in three and a half weeks. “We exported everything,” says Glenn Keys, who’s also the company’s managing director.

“They gave us a piece of dirt and asked us to set up GP services, surgery, primary care, emergency beds, ICU, HDU, a ten bed ward, pathology, radiology, dental ambulance, environmental health and aero-medical evacuation.”

“We worked with the engaged contractors regarding laying a slab, utilities and temporary facilities while the permanent ones were put in place. We purchased over a million dollars worth of equipment and coordinated the shipping, delivery, fitting out, commissioning and testing by Defence, all in three and a half weeks.”

During the Solomon Island riots, Aspen Medical converted standard hospital care to full emergency preparedness in 36 hours.

“We realised there was a good chance the airport would be closed, so we planned getting in people and resources around a very small window of time,” Keys recalls.

“In a few hours we mobilised staff, pharmaceuticals and stores out of Brisbane, and within 12 hours we grew an additional team to 6 people on the ground in the Solomons. In 24 hours, we had doubled the stores required to treat the injured such as morphine, and provided other surgical supplies.”

According to Glenn Keys, the management of high clinical standards, logistics and operations is the key to Aspen Medical’s success.

An engineer by training at Duntroon, Glenn Keys qualified as a flight test engineer and worked extensively in logistics command with many deployments. Later employed by multi-national corporation Raytheon, Keys says planning and coordination are the single most important elements of Aspen Medical’s logistics operations.

“We use a range of project management and logistics planning tools right up front to scope the task,” Keys explains.

“We follow the process through on a regular basis to assess the progress of delivery. Every element is covered, including utilsing any person in the organization who might add value to the project on what needs to be done.”

In rapid deployment, logistics challenges include working with existing systems and procedures, understanding entry and exit requirements such as special visas, licensing or if Aspen’s people will need to be registered when importing equipment and resources.

“Planning incorporates everything from what style of equipment is appropriate in specific locations, how it’ll be operated and serviced, to what parts or spares will be required,” Keys says.

“We also handle delivery schedules, staff changeovers quarantine and any set-backs. Bad news doesn’t get any better with age. Right up front, we make a decision and get on to the next thing.”

“Finally, at the end of each and every project, we complete a wrap-up detailing what have we learned, what would we do differently and what strategies or processes that could be incorporated in to existing and future projects.”

According to Glenn Keys, every project is unique. Early in 2005, the company was contracted to clear an 8 year waiting list for urolology surgery in Ireland.

“In this instance, our deadline was three months,” Keys says. “Previously we’d been there to clear a 2-year ophthalmology surgery waiting list. They were only managing 12 cataracts a week. We facilitated 200 in 10 days. Every project requires a unique plan and implementation.”

Aspen Medical’s cutting edge approach to supplier and internal relationship management is another essential ingredient of the company’s success. Glenn Keys says performance based logistics, the science of managing staff and contract performance is an area the company has been pioneering.

“Establishing realistic, appropriate performance standards and how to monitor and report on them is quite new,” he says. “There’s a tendency to get in to contractual terms and conditions without truly evaluating whether the performance being measured actually reflects the desired outcome.”

“We’re big believers in gathering and analysing data. For us, setting up performance indicators, monitoring and evaluating them continuously against outcomes is an essential component of the business.”

“Customers should be very clear about identifying outcomes,” Keys says. “As part of the negotiation, parties must sit down and agree on how to measure those outcomes so everyone is measuring the right thing.”

“It’s also critical to look at how specific performance indicators drive behaviour,” Keys adds. “We’ve seen lots of examples where implementing KPIs creates bizarre methodologies that have a negative impact on the business. The ‘delivery in under fifteen minutes’ rule is an example.”

“KPIs need to be reviewed every three months initially and then six months, depending on the life of the contract,” Keys says. “If it’s a long contract, it’s essential to monitor whether the desired outcomes have changed.”

“If KPIs need to be changed, go through the whole agreement process again. It’s a lot of work but it will keep everyone focused on what the outcomes are. And it actually prevents contractual issues.”

Glenn Keys says businesses should have two sets of KPIs, those they are delivering for customers and those that measure internal performance.

“Productivity and efficiency are driven by the KPIs at Aspen, and by that I mean both the customers’ KPIs, and ours. Some will relate to our margin while others refer to customer and staff turnover.”

“It’s vital that you employ the same method to develop KPIs with each internal department as you do with your customers,” Keys points out. “Go through each and work out what’s important for finance, HR, stores, projects and so on.”

“No-one needs fifty pages of KPIs,” Keys laughs. “There will always be four or five that specifically relate to your business and chances are you won’t require any more. But those five KPIs must be the right ones and you need to keep looking at them.”

“It doesn’t matter what contract business you’re in, if you’re not measuring complaints and compliments for example, you’re missing the point.”

“The complaints register is the biggest indicator of what’s driving systemic errors, so it’s important to feed that back in to the business to make sure you never get that complaint again.”

“Similarly, if you’ve got a good margin but a dramatically high staff turnover something is going wrong somewhere.”

Glenn Keys is also an advocate of gain sharing — the practice of dividing the savings made by efficiencies achieved through a partnership equally between customer and supplier.

“Many contracts have non-performance penalties but gain sharing isn’t so common,” he says.

“There’s still a prevalent belief that you have to be brutal with your suppliers but negative reinforcement only supports the ‘status quo’ without driving suppliers to
improve. I think if we saw more gain sharing we’d see a more savings and efficiencies.”

Ultimately, Keys believes developing relationships is about talking. “It sounds trivial, but I think it’s important to schedule in a coffee, even if it’s just at your quarterly meetings,” he says.

“We all have stuff outside our jobs and you need to take some time to get to know your people whether they’re customers, staff or suppliers.”

“These days, everyone is so time- poor, they think they should only spend 15 minutes with a customer. But I’ve found if you spend an hour you might save 2 days or a million dollars later on.”

“Often, we’re only brought in if there’s a problem, so when it’s fixed there are many more pressing priorities to get on with. So I make a point of saying: ‘I’d really like to talk, let’s work out an opportunity to get together.’”

Despite the achievements of Aspen Medical, Glenn Keys is quick to confirm that he’s never complacent about performance. “We’ll never reach a stage where we just roll along,” he says.

“We promote the fact that our country managers and staff know their jobs best and we’re very supportive of any new ideas they might have to improve efficiencies or change the program. We have a range of methodologies to ensure we’re continually monitoring our service with fresh eyes.”

“We were able to purchase and distribute all the equipment needed in Timor within a week, but it took an enormous effort.”

Consequently, we’re currently putting all the agreements in place for our next logistics pipeline in advance. That kind of planning isn’t against a specific project, so it may seem like a cost. But I’ll be surprised if we don’t need those systems again.”

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