From the March 2011 issue of HealthCare Business News magazine
The supplies are a hospital’s second largest cost after labor. As a result, modest improvements in supply chain management can result in significant cost capture and savings. In a recent study, hospitals that adopted a proactive, streamlined method of supply chain management have been shown to reduce costs from five to 15 percent, which equates to a one to three percent improvement in operating margins.
The key to improving the hospital supply chain is to view it as a complete, wall-to-wall system that links all component system parts – the loading dock, storeroom, prep areas and operating rooms - in a single cohesive chain. Most hospitals have an existing materials management system that tracks deliveries to the loading dock. This lets supply chain personnel know what inventory has been delivered but they can’t see the rate at which it is being used or where it has been delivered in the hospital. Greater inventory transparency at each step in the supply chain is a must.
Hospitals can unify this entire system with modern supply chain software that is both compatible with existing central material management software and places handheld devices loaded with sophisticated applications in the hands of personnel at points-of-use throughout the system. All items are scanned and tracked at each point, giving hospital administrators granular visibility into department storerooms and operating rooms on a real-time basis. Where RFID and advanced barcode technology is employed, this system becomes even more efficient and streamlined.
A comprehensive supply chain management system also tracks exactly what items are used during a medical procedure and which unused supplies are returned to the storeroom. After the procedure, the unused items get scanned back into the storeroom, billing the used items directly to the patient. This greater level of accuracy and transparency works to the advantage of both the patient and the care provider.
A comprehensive supply chain management system will also generate alerts when inventory is running low or nearing expiration. Appropriate “par” levels can be set and when the system falls below these, an automatic alert is sent out. The supply chain management system also serves as a powerful analytical platform capable of generating reports and providing the intelligence needed to improve performance, cut costs and reduce unneeded inventory. Fewer supply chain personnel are needed to manage the system more effectively, reducing the burden on hospital staff, particularly care providers.
