Finance
One way that surgical facilities can maintain margins during a challenging economy is to fully leverage the potential of supply chain management. As the recession continues, companies in all industries are challenging supply chain professionals to demonstrate their true value by finding more ways to reduce purchasing and inventory costs and surgical facilities are no exception.
Supply chain teams are always looking for ways to leverage better pricing from their vendors while, at the same time, reducing costs associated with inventories. Through aggressive vendor negotiations, supply chain professionals have historically demonstrated that they are able to mitigate or reduce price increases as they are rolled out from the vendor community. Inventories can be reduced through closer management of inventory turns and by leveraging vendors to agree to consign products to the user facility so the vendor actually retains product ownership while placing products at the end user's facility. Then, when the product is consumed at the end user facility, the product is typically billed and replaced by the vendor.
Supply chain management should also include leveraging group purchasing organization contracts and other stand-alone agreements that have been negotiated locally, regionally or nationally. Supply chain teams should be extremely focused on expanding these contracting opportunities in 2009.
Within a healthcare setting, other opportunities for savings can be realized by focusing on improved pricing opportunities, less costly alternative items, product standardization and overall reductions in supply utilization. Supply value analysis activities usually occur through a formalized committee, which meets monthly, and are most effective when physicians and staff join forces. Results should be monitored and tracked on a monthly and annualized basis to provide a metric by which to measure the committee's effectiveness in terms of overall savings, while never compromising patient or employee safety.
Now is not the time for those responsible for supply cost management to shrink from the economic challenges ahead. Rather supply professionals should seize the opportunity to step into a leadership role within their respective organizations. By making their mark now, the supply chain team can be one of the primary contributing factors to their organization's success in challenging times.
Written by Don Fox, vice president, supply chain Nueterra Healthcare