Supplies in the category of maintenance, repairs and operations (MRO) can be particularly challenging – and costly - for healthcare providers to manage. While the products may cost only a few dollars each, the overall cost to procure these items can equal - or exceed – the cost of the products themselves.
In many cases, hospital maintenance staff will go out and shop at local stores for these items using their purchasing cards. Not only are the products procured this way often more expensive than those from suppliers with which the hospital has contracted, there are also the added labor costs and other expenses associated with staff members shopping at various local stores. It is clear that gaining visibility into and control over these items presents a significant opportunity for cost savings.
In healthcare, the long-held view of a “perfect order” is one where a purchase order is processed electronically — from order to payment — without human intervention.
Achieving the perfect order hasn’t been easy. A lack of automation throughout the payment cycle created all kinds of barriers to achieving the perfect order.
How can you significantly influence your supply chain performance without the help of additional resources?
Healthcare provider organizations are tasked with this dilemma daily and the goal to go beyond just managing costs, but to actually reduce costs while improving patient outcomes. Supply chain specifically goes after this challenge with an eye toward expanding automation, using data proactively and improving contract price alignment.
In the olden days (think any time before 2010), the healthcare suppliers getting connected to the GHX exchange were pretty much medical-surgical manufacturers and distributors. And while the supplier community connected to GHX, and the provider community as well, continued to grow, the products that were being purchased electronically through GHX tended to be those we classify as disposables and consumables. Maybe it was just that healthcare needed a starting point to think about where and how to automate purchasing, and the area of a hospital most able to move toward e-procurement was the department formerly known as materials management.
At the 2014 GHX Healthcare Supply Chain Summit, representatives from four leading supplier organizations shared their lessons learned and best practices for using GHX Order IntelligenceSM to address purchase order (PO) issues during the transactional process—before the PO hits their enterprise resource planning (ERP) systems, thereby eliminating costly errors and rework. All presenters agreed that setting up a clearly defined set of business rules was key to improving order accuracy and process efficiency.
Talia Mauck, director of Supply Chain Management for Adventist HealthCare
So much of healthcare today is about centralization with organizations seeking to increase efficiency and reduce costs. At Adventist HealthCare we’ve found that decentralizing purchasing information by providing key clinical departments access to order status has enabled us to achieve these same benefits.
In healthcare, we have a history of complexity that drives some of the current costs of healthcare. Bringing a new, innovative device or drug to market is an incredibly long, complex and costly process. Now add onto that our incredibly complex supply chain processes, which require the distribution of goods and services across a variety of points of care.
Winter has been tough this year. It has been especially tough on customer service departments.