Regardless of whether your facility is a small local hospital or a large IDN, both private and public institutions are facing all-encompassing cost pressures. Within the supply chain, innovation is often viewed as an out-of-reach luxury that comes with a hefty price tag.
In actuality, innovation and reduced cost can often go hand-in-hand. From adapting your mindset to exploring best practices from other industries, here are three ways to change your perspective on hospital supply chain innovation.
Explore unexpected areas for innovation
Though innovation may bring to mind buzzwords like AI, blockchain, and the Internet of Things, there are plenty of small ways to adopt an innovative mindset within your facility without jumping into the deep end of advanced technology. The key is to identify areas within your hospital or health system that can benefit from simple changes. In order to determine if an innovative solution is worth a larger investment, test-drive the change on a small scale within a specific area of your facility.
As healthcare becomes increasingly commercialized, the first step is to work with your staff to encourage a customer-centric mindset. From there, identify which areas within your facility can act as your innovation guinea pigs. By testing new processes on specific, isolated categories like food, consumable products, or housekeeping products, you can directly determine the exact impact a small change generates. If incremental innovations do have an impact on cost and patient care, your results can be used to justify larger-scale changes with higher startup costs. Innovation doesn’t have to be all-or-nothing.
Contemplate complexity
Innovation isn’t inherently linked to higher costs; there’s often a third variable confounding the relationship.[i] When innovation leads to more complexity within the supply chain, higher costs are quick to follow. Therefore, it’s important to factor in complexity reduction when considering potential innovations. In some cases, there may even be a complexity trade-off. For example, implementing an RFID solution may initially increase complexity by altering your staff’s workflow, but will minimize complexity in the long run as all products are concentrated within a single inventory management system and the need for manual engagement is reduced.
If your hospital isn’t ready to implement a comprehensive RFID solution, consider implementing a single RFID cabinet in an area of the facility that needs inventory management most. Or, take a simpler, less complex, and more affordable approach by implementing handheld barcode scanning. This option still includes manual scanning but helps automate the data entry aspect of inventory management. As stated before, a small-scale change that demonstrates a positive financial impact can be used to justify more extreme innovation in the future.
Take a page from manufacturing’s book
Though innovation is inherent within every industry, the manufacturing sector has been an important driver of innovation since the Industrial Revolution.[ii] Taking this long history into account, proven innovation theories from the manufacturing space can help you determine a strategy for innovation within your facility.
When designing products, manufacturers utilize both Design to Value and Design to Cost strategies.[iii] When adapting the Design to Value approach for the supply chain space, the supply chain should be assessed in terms of features that drive value for your facility’s patients. This will help you adapt innovation to suit changing customer needs and identify areas for improvement. When using the Design to Cost approach, the supply chain can be examined with the aim of reducing costs wherever possible. The most effective plan for success? Utilize both strategies in tandem and consider both short-term and long-term results.
Another strategy from the manufacturing space is to take on the role of a “Need-Seeker” and utilize insights from data in your facility to drive new ideas.iii There’s no need to be at the forefront of every new trend, but if there’s a pressing issue or need that your facility is facing, sticking to traditional, time-tested solutions may be holding you back. Utilize innovation first where it’s most critically needed and then grow your innovation focus from there.
[i] https://www.industryweek.com/software-amp-systems/balancing-product-cost-and-innovation
[ii] https://interestingengineering.com/27-inventions-of-the-industrial-revolution-that-changed-the-worldhttps://interestingengineering.com/27-inventions-of-the-industrial-revolution-that-changed-the-world
[iii] https://www.strategyand.pwc.com/gx/en/reports/strategic-product-value-management.pdf