As we approach the end of the year, many health systems will likely be looking for opportunities for any additional cost savings after facing financial headwinds throughout 2020.
There are several long-term changes facilities can undergo in order to see significant cost savings, such as implementing a logical unit of measure system, leveraging an inventory management technology, or maximizing freight management. However, these may not be practical or feasible in the short term. But looking within your current supply chain model may uncover some hidden inefficiencies. Here are four quick tips we’ve gathered from our experience and supply chain experts to increase the health of your supply chain and decrease costs as you head into 2021.
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Reducing the amount of same day deliveries. As your healthcare system grows and evolves, so does your local, same-day transportation needs. Unmanaged same-day delivery costs could be up to two times the costs of small parcel and large freight combined. Often, individuals and departments use different couriers for same-day deliveries. However, when under pressure departments might not be making the best choices, which leads to duplication and inefficiency. Take a deep look at your delivery schedule to assess how many couriers you use and how many drivers visit and re-visit the same facilities every day. Then, leverage your freight management capabilities to optimize these modes of transportation. This could mean reducing duplication of same-day shipments from the same courier, or even sending certain small parcel shipments overnight, which is often more efficient and cheaper than repeated daytime deliveries.
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Regularly organize and reorganize stock rooms. Mismanaged stock rooms can significantly increase soft costs like staff time, but luckily, they are one of the most avoidable supply chain mistakes for most health systems. Knowing exactly where products live in the stock room limits the amount of time staff spends looking for product, giving them more time to treat patients. This both reduces soft costs and increases staff satisfaction. In addition, regularly reorganizing your stock room helps to avoid throwing away expired product. If staff don’t know where to find items, they will not know where to return them. Returning product to the wrong location ultimately leads to expiring product and a sunk cost. Regular reorganization can also help to catch these mistakes more easily.
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See where you can increase automation. Most health systems already implement automation in areas where tedious, repetitive processes reduce staff bandwidth. Although automation technology might exist at your facility, you may not be using it to its full capacity. See if you can expand this automation to other departments within your facility. If any frontline staff are spending more than two hours on supply chain management each week, then it might be time to expand your automated solutions. This will reduce the risk of human error in your supply chain as well free up human bandwidth for more strategic work and for time spent treating patients—decreasing both soft and hard costs at your facility.
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Encourage staff cycle counting on high turn items. sure everyone on your staff is held accountable for proper demand planning of key products. Identify key high turn items, and encourage regular cycle counting to quickly determine where inventory management issues can occur. This can potentially identify the root cause of inventory issues and help better predict future demand.
Following these four tips can boost your supply chain health and better position you for the New Year. For more insights and supply chain best practices, visit our supply chain center.
1 http://interactive.cardinalhealth.com/same-day-solutions/p/1