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5 Steps to Efficient Supply Chain Management in Healthcare

By CME on Jul 11, 2014 11:05:00 AM

ID-100260324Integrated delivery networks (IDNs) and other healthcare providers are always deliberating on how to make healthcare more cost-efficient. Many organizations have turned their focus to supply chain management.  According to some research, this function makes up 40 to 50% of the operating expenses for healthcare systems and hospitals.  In healthcare, the supply chain management function has evolved beyond the scope of simply determining how much of each type of supply to purchase and carry in the storerooms.  Today, those managers must effectively manage relationships with vendors and companies at the upstream source of products and downstream, to the end users to minimize supply costs and transform the function into a bottom line asset for the organization.

Here are five steps you can take to improve your organization's efficiency:

1. Commitment and Team Building

Before you embark on a project to create greater efficiency in supply chain management, you must have assurances from senior management that they will support the process and keep it moving along.  In addition, make sure that the project team is representative of all stakeholders—physicians, nurses, material managers and other staff, to increase support for any quality changes and cost saving initiatives you implement.

Remember, physicians and nurses and other professionals may not be motivated by money (cost savings), but rather by pride, professional recognition and better patient outcomes.

2. End-to-End Visibility

One key to achieving efficiency involves creating greater visibility between both the upstream and downstream segments of the value chain via data exchange.  Data from every task in the supply chain provide the facts and evidence you need to understand and communicate the realities you need when making decisions in key areas, including:

  • Accurate charge capture

  • Inventory management

  • Demand forecasting

  • Recall management

You can also realize significant savings through a reduction in errors and more up-to-date data to help the operations run smoothly. 

3. Improve and Automate Manual Business Processes

Use the principles of methodologies such as Lean and Six Sigma™ to evaluate current processes and identify bottlenecks and other issues.  You can also use them to identify opportunities to streamline and make improvements and to implement technology driven solutions to automate your processes.  This can improve your operational efficiency and inventory management.

For example, automating requisitions, purchase orders and invoices, helps providers and suppliers to eliminate manual, error-prone processes and improve supply chain management.

4. Build Efficient Trading Partner Relationships

Each entity within the supply chain performs a specific role, such as supplier, partner or customer.  When it comes to the movement of products, information or funds, it is important for you to establish collaborative alliances with vendors and distributors.  The quality of the relationships has bearings on your ability to get the product or equipment to the end user when needed at the lowest possible cost.  This affects your financial performance.

Relationships must be flexible enough to allow the key players the necessary leeway required to constantly source for better options and low-cost solutions, especially for big-ticketed items.

5. Establish Metrics to Track and Measure Results

Make sure that your supply chain management initiatives include the tools you need to track and evaluate outcomes over a given period of time.  This will monitor the use and selection of products.  Monitor adherence to established protocols to see if they are working as intended.  This proactive approach will help determine if adjustments are necessary and where you can make changes for further optimization.

Determine the metrics you want to use.  You don’t have to use every benchmark available to you, start with just a few key measurements and add on as the improvement process matures.

Using a distributor that specializes in equipment procurement and deliveries can assist you in successfully fulfilling many of these functions.  CME is just such a distributor.  At CME, we specialize in the logistics of medical equipment procurement and delivery to healthcare facilities.  We want to be considered as part of your upstream supply chain management team, particularly when it comes to securing and installing equipment for your new construction and expansion or remodeling projects.  Our unique order tracking, warehousing, inspection and assembly of equipment, plus our direct-to-site delivery program sets us apart as a valuable part of your supply chain system.

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Image courtesy of: Stuart Miles/ Freedigitalphotos.net

Topics: Equipment Delivery, Supply Chain Management, healthcare

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