The 21st century has become known as the age of payment reform for the healthcare industry. For this reason, it’s imperative that healthcare providers continue to improve their supply chains. Let’s take a look at the different ways the healthcare industry can accomplish this, especially as it involves adopting new technologies.
Complexity of supply chain management
According to RevCycle Intelligence, supply chain management is one of the most complex aspects of the healthcare industry, especially since it is so fragmented. Following are suggestions for healthcare organizations (including hospitals) to improve their supply chain management:
- Manage contracts carefully: Healthcare organizations often let the responsibility for their contracts fall by the wayside by turning them over to group purchasing organizations (or GPOs). But failure to stay on top of contracts could lead to them expiring altogether, or being overcharged for goods. In fact, this is such a prevalent problem in the healthcare industry that the Health Financial Management Association (HFMA) has conducted a study on the matter, suggesting that health care providers pay attention to their contracts to be aware when vendors include “strict confidentiality clauses.”
- Develop effective inventory management: Manufacturers often have problems keeping track of their inventory and getting it through the supply chain in a timely fashion. Developing effective inventory management helps manufacturers keep the profit margin up since failure to effectively manage the inventory can lead to items being expired, thus causing loss of product and, subsequently, revenue. It also helps with productivity, since failure to effectively manage the inventory can lead to a decrease in worker productivity, as they must stop doing their daily work to maintain inventory.
- Use technology and analytics: Technology, in general, is a boon to any organization. In the healthcare industry, using the most up-to-date technology helps increase productivity, profit margin, and worker satisfaction — all of which are essential to maintaining an effective supply chain.
- Ensure that the pricing system is on point: One of the biggest problems that healthcare providers have is understanding the concept of cost and profit margin. The best way to circumvent this is to have a cost-accounting system in place that automatically determines the correct cost of an item, and the corresponding price that makes sense both economically for the company, and financially for the client.
- Improve ordering accuracy and order cycles: Continuing in the vein of improving productivity and profit margin, improving order accuracy also improves the company’s overall error rates. For example, if a company orders the wrong products, they won’t have the correct items to supply to customers. This negatively affects the bottom line, sometimes irreparably.
The bottom line, according to Forbes Magazine, is that healthcare supply chains can only be positively impacted by digital disruption. However, if the company isn’t prepared for the next level of the digital revolution, digital disruption can have a negative impact on the company and its supply chain. Ensure that you come out on the positive side of digital disruption by proactively working to transform your supply chain with the right skills and technology, gain real-time insights into your supply chain, and eliminate the system silos that prevent insights to move your organization in the right direction.
About Vanguard Software
Vanguard Software introduced its first product for decision support analysis in 1995. Today, companies across every major industry and more than 60 countries rely on the Vanguard Predictive Planning platform. Vanguard Software is based in Cary, North Carolina.