Wednesday, August 27, 2014

Strategic Supply Chain Management

Supply items add up.  It is estimated that the supply chain can make up 30-50% of a hospital’s expenses.  In 2020 medical supplies will surpass labor as the biggest expense for hospitals and health systems.  These are some big stats. Much of the time the focus has been on cost cutting ,but that isn't always the best answer. Quality is still a concern. Supplies need to perform and drive successful patient outcomes.  Suppliers who can provide high quality while offering lower costs will win the game.  Here are some tips for strategic supply chain management.

Cost Analysis
This is the given but the old adage of what gets measured gets done is true. Take the time to re-evaluate your product lines.  This can be quarterly, annually or beyond.  Have a system and analyze if you are still using the right supplier or it is time to make a change. Negotiate costs based on your volume increase, raw materials data, or buying in larger quantities at a time.  The key is to not be complacent.  Continue to fight for the bigger, better deal.

Look for ways to increase efficiencies.  There are endless technologies from software, apps, or complete ERP systems that can improve your processes.  If you save time doing administrative or repetitive items, you can spend more time doing what you do best.  Look for ways to automate to conserve your biggest resource – time.

Relationship Building
Take time to forge relationships with your vendors.  Know what makes them tick. Learn about their lives beyond their product or service.  Set up a calendar for touch base contacts such as phone calls, emails, or written letters.  Move beyond just the digital world.  This helps you negotiate more effectively and builds a partnership mindset to drive the win-win agreements.

Cross Reference
Determine the value proposition. Most of want to know what is in it for me to move business or convert to a new line.  Request a cross reference from your vendors to show the savings and value they can provide.  A value analysis is a priceless tool that provides hard data to prove savings and the value of a move.

It is more important than ever to create a supply chain strategy.  Have other tips to help your peers?  Please leave suggestions in the comment section below.  

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