Improve Your Supply Chain Purchasing in 3 Easy Steps

“If you’re not working to save money, you’re losing money,” said Donna Worsham, senior vice president of National Surgical Hospitals in Chicago.

During a panel discussion at the Becker’s Hospital Review 4th Annual Meeting in Chicago on May 9, Ms. Worsham, along with Doug Golwas, senior vice president of Medline Industries, Richard Kunnes, MD, managing principal and CEO of The Sevenex Group and Jeffrey McLaren, managing director of Huron Healthcare, offered advice for finding and making necessary budget cuts in a hospital’s supply chain.

1. Get ahead of contract calendar. “The bigger the organization, the more the supply chain projects and priorities dictated by project calendar,” said Mr. McLaren. A demanding calendar does not leave much time for the data analysis all panelists agreed is needed to find opportunities for cost reduction. “The only way to spend the time analyzing is to get ahead of contract calendar,” said Mr. McLaren.

2. Tap into physicians’ competitive side. The panelists recommended ranking physicians on the basis of their cost-effectiveness and letting their drive to compete fuel cost-saving efforts. Find out which physicians are the “high spenders,” said Mr. Kunnes, and then “show that compared to peers there is an opportunity.”

It can also pay to build a sense of competitiveness between physicians and sales reps. “I suggest that physicians go out into the parking lot and look at the vendor’s 750 BMW to create competitiveness,” said Mr. Kunnes.

“I’ve done that. It works,” said Ms. Worsham.

3. Challenge vendors to meet your needs. The panelists recommended communicating with vendors about alternative supply options. “Challenge your vendor to tailor a solution that meets your needs,” said Mr. Golwas, to avoid disappointment later with services or products provided.

This also means working with vendors to keeping costs down. “Commit to your vendor,” said Ms. Worsham, “and then keep them accountable for your savings workplan.”

Mr. Kunnes also reported successfully using reverse auctions to challenge vendors to meet his price. “The savings can be enormous provided the auction is structured correctly,” he said.

From: Becker’s Hospital Review