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A Medical Distributor's Role in Supply Chain Management of Equipment

By CME Corp Staff | July 18, 2014

When someone talks about supply chain management, what usually comes to mind is the procurement, acquisition, in-house storage, and distribution processes for the consumable items that the healthcare facility uses on a daily basis.  

This usually involves such things as GPO (group purchasing organization) negotiations, just-in-time (JIT) deliveries by medical distributors, on-site storage, inventory management and distribution to the end-user departments on a recurring basis.  It also may involve an automated electronic ordering system that essentially minimizes the active engagement of the materials management/purchasing department personnel.

While the supply chain management process for major equipment items is similar to that for the consumable medical supplies, there are some significant differences. This is especially true in the case of new construction, expansion and major remodeling projects, which are not routinely recurring events.  There is no automated ordering system for new major equipment items.  There is no standard in-house delivery process for getting the items to the end-user departments, nor is there a dedicated storage space or inventory control process.

The supply chain management process for major medical equipment items has to extend well beyond the boundaries of the hospital/healthcare system. In order to properly outfit a new facility, a major expansion of an existing facility or even a large remodeling project, many different manufacturers/vendors need to be contacted and negotiated with.  

They each need to have individual orders placed for their specific products, have shipments scheduled and even have storage, installation and training issues addressed. Such a process could involve as many as 100 different vendors with possibly 150 purchase orders and multiple delivery dates. Since this is not usually a routinely recurring process, it is not generally automated which means that it is very time and labor intensive.

An alternative is to engage the services of a medical distributor that specializes in medical equipment distribution and is well versed in all the logistics involved.

Quoting and Flow

Utilizing medical distributors allows hospitals and IDN’s to take the cumbersome paperwork, schedules and tasks associated with procurement and make it simple. Deployment and implementation are covered and the headaches associated with timing, budgeting and manpower are taken care of so that staff will have nothing to worry about other than using the equipment when it arrives. Utilizing medical distributors ensures that procurement is turn-key for both everyday delivery and major new facility openings or moves.

With so many steps involved in supply chain management, medical distributors can reduce the number of PO’s issued, reduce the cost of purchases, manage the flow of how things will arrive at your site and also eliminate as many steps as possible to reduce costs and expedite the ordering process.

Streamlined Delivery

Streamlining delivery takes a lot of effort, yet with a medical distributor, it can become easy.  They can provide tracking reports so that you always know when and where your equipment is and when to expect its arrival.  With some medical distributors you are not faced with using third party logistics companies.  Instead there is a smooth transition from all of your individual vendors to one warehousing and staging area where all of the assets can be tagged and stored until you are ready to take delivery. This way you are not faced with an endless flow of deliveries and instead can have a single direct-to-site delivery so it will arrive to site assembled, tested and ready for use.

In the case of major orders such as a hospital opening or expansion, deliveries can be scheduled in a logical fashion, separating orders that require assembly or installation.

With smaller items some medical distributors will arrange for items to be boxed and labeled by room or department so that there is less chance for loss in the supply chain.  For larger equipment, items can be assembled, delivered and installed directly to the right rooms.  There is also a product damage and malfunction service should anything not be functioning properly.  In fact, some medical distributors will even coordinate staff training on new equipment as required.

Benefits of Medical Distributors

In a nutshell, some medical distributors will offer the following benefits in supply chain management:

  • Reduced administration cost and effort due to fewer PO's

  • Fewer scheduled deliveries using a logical delivery system from one warehouse direct to the room on your site, minimizing potential loss or damage

  • Maximized cost savings due to GPO contracts or bundled purchases

  • Streamlined direct-to-site, time-sensitive deliveries

  • Reduced freight costs due to a single consolidated delivery schedule from one warehouse

  • Fewer losses and less damages due to products being sorted and boxed according to room and department which also reduces costs and administration efforts at your end

  • Single point of contact for your entire facility's needs for less effort and more savings

  • Your project is delivered on time and on budget.

Using a distributor that specializes in equipment procurement and deliveries can assist you in successfully fulfilling many of these functions.  At CME Corp, 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.  

About CME: CME Corp is the nation’s premier source for healthcare equipment, turnkey logistics, and biomedical services, representing 2 million+ products from more than 2,000 manufacturers.

With two corporate offices and 35+ service centers, our mission is to help healthcare facilities nationwide reduce the cost of the equipment they purchase, make their equipment specification, delivery, installation, and maintenance processes more efficient, and help them seamlessly launch, renovate and expand on schedule.

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