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Cost Vs. Value: How to Evaluate Your Next Equipment Delivery Project

By CME on May 16, 2014 1:12:24 PM

ID-100213542Whenever you want to get new equipment for your medical facility, there will be several types of costs involved.  Besides the price of the products that you are getting delivered, you must also consider PO costs, delivery charges, administrative fees, staging, and cleanup.  Basically, all the costs that are involved with a product in its journey through the  supply chain, from the time the PO is created until the time the product is put to use by the end-user. Sometimes these costs can be nearly as much as the cost of the equipment items themselves.

Where Direct-To-Site Delivery Can Save Money

Studies conducted based on actual cases of direct-to-site contracted deliveries have shown that there are five primary areas where this kind of delivery strategy can provide savings:

  • Storage
  • Warehouse receiving and handling
  • Product assembly
  • Installation and deployment
  • Trash removal

Whether you decide to handle this work in-house, simply absorb the routine equipment delivery costs or decide to contract out a direct-to-site delivery, there will be costs involved in each of these areas.  Direct-to-site delivery can reduce the cost of paying someone to handle this work and allow you to save the hours it would take your own staff to handle these tasks themselves.  The important thing to think about is the individual costs that you will accrue in each of these areas depending on how you decide to handle your delivery.

Storage And Warehouse Receiving

If you simply absorb the costs of a third-party delivery company to handle this part of your equipment procurement, you can expect to pay a per-pallet premium for storing your pallets or cartons.  There is also a fee for your contractor to receive the pallets and get them ready to be delivered.  From there, you have to also consider the cost of getting your equipment from the warehouse to your site.  The costs for this type of work can average around $35 per hour.

Assembly Of Product

It is great to have products assembled for you, prior to getting them on-site.  Even if you have your own team assemble the product, you have to consider the hours that they will lose.  Busy medical facilities and hospitals may not be able to afford to pull staff members off their normal responsibilities to put together new equipment.

Deployment And Installation

Once product is assembled, it must be activated and set up for use.  You might be able to get your own medical professionals to handle this work, but not everyone on your team will understand how to deploy the products that you purchase.  If you pay a third-party to set up your equipment, you have to deal with the costs, which are usually charged per delivery.  This means that in a situation where you are purchasing a large number of products, there may be multiple installation and deployment charges.

Waste Disposal

This might not be something that you consider when evaluating equipment purchases, but think about all of the waste that can accumulate with equipment deliveries during the renovation or construction of multiple floors in a medical facility.  There may be hundreds of boxes in your order, as well as packing materials and pallet wraps.  You also have to be conscious of the costs of waste vessels like dumpsters for trash and recycling.

How To Minimize These Costs

Whether you decide to handle these tasks yourself or contract them out, you will face a cost in each of these areas.  The best way to maximize savings is to find a single source that can offer all of these services at a competitive price and contract for an all inclusive direct-to-site delivery fee.  At CME, we specialize in cost effective delivery and installation of medical equipment.  Case studies have shown that when it comes to quantifiable warehouse and deployment costs, our direct-to-site delivery program can save our customers over 3.5% of the cost of their order, a significant sum of money when you are undertaking six or seven figure renovations or construction projects.

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Image courtesy of:  Stuart Miles /freedigitalphotos.net

Topics: Equipment Delivery, Medical Equipment Procurement

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