Not seeing cost saving results in supply chain? 5 underlying issues

Restructuring and implementing supply chain support systems may not be enough for hospitals to realize their full savings potential.

To fully grasp supply chain efficiency and savings, organizations must first address five key business issues that are at the foundation of the inefficiencies, writes Todd Tabel, vice president of McKesson.

1. Poor data quality and sharing. Organizations need to first remove data silos and integrate everything "into one source of data truth," writes Mr. Tabel, including item and charge maters, purchase history and contracts and vendor catalogues. By doing so, users can access all necessary information in one place.

2. Poor supply spend visibility. "When you can't see spend, you can't compare or control it," writes Mr. Tabel. He suggests a implementing a formulary procurement system that centralizes all purchases, bringing an organization's entire supply spend into view. Doing so allows organizations to review what they are spending for particular items and can help plan and strategize for new contracts.

3. Lack of purchasing information and direction. A preemptive formulary procurement system can direct materials managers and clinicians to the organization's preferred items. Doing so can ensure best financial practices and value through product purchasing standardization.

4. Poor contract compliance. Instead of analyzing purchases and supply chain spend after already procuring items, Mr. Tabel suggests implementing a system that looks ahead to future purchases to prevent off-contract purchases. When organizations don't manage and analyze contract compliance before purchasing, "it's like driving by looking in your rear-view mirror," Mr. Tabel writes.

5. Inability to compare similar products. Identifying and comparing similar products can present challenges to standardization and value analysis. However, in doing so, organizations can select the best products for their organization, standardize purchases and limit the number of vendors with which they work.

More hospital supply chain:

6 of the largest GPOs
GHX: 10 ways to cut med-surg supply spending
Supply chain's evolution from the basement to the executive suite

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