As debate over how to view, and fund, healthcare through governmental reform progresses, it creates more budgetary pressures on healthcare facilities trying to manage an erratic stream of payments from disparate sources. However, things evolve, payment pressures will not abate, which is why having the supply chain involved at the decision-making level makes fiscal sense.
The supply chain represents 40 to 45 percent of hospital or healthcare system operating expense, second only to labor costs. This mix is expected to keep shifting, with the supply chain potentially overtaking labor costs within the next 5 years. Creating successful supply chain strategies requires a top-down approach with knowledgeable stakeholders involved at the highest levels.
In a recent survey that focused on healthcare supply chain trends, expectations for savings from supply chain performance was the top cited trend for 2017. These cost improvement initiatives result from a strong customer/supplier relationship and biomed and IT departments that are engaged with executive processes.
At CME, we seek to build a strong relationship with our customers and to act as a partner in helping them obtain their supply chain objectives. We take a cradle to grave approach with our products because we know the value of the equipment goes beyond the price of the item. These are not just expensive pieces, but lifesaving as well, with maintenance and regulatory concerns attached to them.
We see the trend of more collaboration with suppliers as a very positive development and approach every customer relationship as a partnership. The improvements in supply chain performance, and the savings, both in time and money, that can come from working collaboratively with your medical equipment supplier, are clear and substantive. Here are just a couple of examples.
Total Cost of Ownership
When procuring medical equipment, the hidden costs of the product are not always considered. This total cost of ownership (TCO) means looking at the fully landed costs, not just the sticker price. Things to consider are:
- What is covered in the delivery charge?
- What are the assembly/installation requirements?
- What are the costs for disposal of the replaced equipment and shipping materials?
- What are the costs for extended warranties/preventative maintenance?
By working with a trusted supplier partner that is aware of these “hidden costs” the full TCO makes for realistic decision making.
CME provides a direct-to-site delivery service that covers all of the issues helping customers avoid the hidden delivery, installation, and disposal costs. CME can also provide extended warranties and preventative maintenance as well as doing basic electrical safety inspections.
Watching these extra costs is a top concern within supply chain. With the fierce competition between different departments for budgeting dollars, utilizing a TCO approach offers a transparency that leads to effective, strategic decision making.
TCO also encompasses all lifecycle factors, including maintenance and regulatory compliance costs. With CME’s turnkey approach, TCO becomes clearly understood, as all aspects of the lifecycle management of the equipment are available with charges spelled out transparently.
Having a more collaborative relationship with your supplier is an effective means to make executive level strategic decision-making more profitable.
This and other important supply chain trends speak to a fundamental shift in how healthcare systems are acting more like systems, with a collaborative interplay between departments and the executive team leading to more successful outcomes. We will continue to highlight, and expand upon, more healthcare trends that impact the supply chain and the departments aligned with it.
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. Call CME at (800) 338-2372 or contact us for additional information.