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Procure-to-Pay for Healthcare: 4 Ways Your Distributor Partner Can Help

By CME Corp Staff | February 23, 2023

Covid-19 has been devastating to the healthcare supply chain in many ways. Past due payments, lack of visibility, and match exceptions proliferated during the pandemic. This experience has made all of us in the supply chain look at ways to improve going forward. One of the processes that has emerged for healthcare systems is the Procure-to-Pay model. The first step is to mine all of your processes including preparing the Purchase Order (PO), confirming the ship date, receiving the product, and invoicing. Then determine gaps, redundancies, inefficiencies, best practices, and possible automation all along the way. When correctly implemented the end result should be a reduction in operating costs, improved efficiencies, better alignment with your suppliers, and supply chain resiliency. Here are four ways CME Corp can help.

Matching POs to Orders and Invoices

Match exceptions are a nightmare for healthcare facilities. It takes time and costs money to figure out the solution with suppliers. And the exceptions have multiplied since the pandemic. Price changes, long lead times, and change orders are more frequent and can cause problems if everyone is not on the same page. CME has developed an automated dashboard to catch any discrepancies early on. If the total dollars on the PO does not match our total on the order, we figure out what the discrepancy is and contact the customer immediately to collaborate on a solution.

Visibility throughout the Product Journey

Three years ago, CME developed a proprietary software program, CME360 Project Management (PM) Hub, to automate some of our internal processes and to provide more transparency for our team and the customer’s team. After we enter the order into our ERP, we create a product tracker in the PM Hub that has built in reminders that keep everything on track. Once our purchasing department creates POs for the manufacturers, the system monitors PO confirmations, anticipated ship dates, tracking information and warehouse receipts. Our project managers communicate any problems to the customer such as freight damage, short shipments, and extended lead times expeditiously.

More and Better Communication with Manufacturers

Many of our manufacturers send us accurate ship date information but they are relying on their suppliers to get the components to them in a timely fashion. Since Covid-19, that has been hard to do. Most of them try to get us updated information in a timely fashion but many do not. CME has a team of purchasing professionals slated as project specialists. Their primary responsibility is to communicate with our manufacturers to get updated shipping information on products that have imminent ship dates or past due dates. Having this focus on constant communication with our manufacturers has helped us get better information to our customers.

EDI Initiative

Automation is the key to Procure-to-Pay being a successful endeavor. Having all manufacturers, distributors, and customers using EDI for POs, PO acknowledgement, advance shipping notice, and invoicing would be revolutionary for the industry. CME is focused on selling equipment and that side of the market has been slow to adopt EDI. For it to work, manufacturers have to have a unique part number for everything they sell. Most smaller manufacturers do not have unique product numbers for all the upholstery colors, finishes, and accessories. CME is working with our manufacturers to start using EDI. It has been slow but we are having some success. We are also looking to our hospital system partners for guidance and conversation on where they are with EDI and how we might help.

For more information on CME or any of our services, contact your local CME Account Manager, visit our website, or call 800-338-2372.

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.

Supply Chain Management CME360