Managing the supply chain in the healthcare industry is a very difficult task because they are typically incomplete, fragmented and complex. But, the fact is that it cannot be taken lightly because such weaknesses can cost huge sums of money, put the lives of people at risk and reduce the ability of the healthcare industry to face and defeat challenges. Since the whole sector has become focused on improving outcomes, controlling costs and following increasing regulations, the pressure and scrutiny of the supply chains has magnified. Therefore, strengthening healthcare’s supply chain has become extremely vital as an efficient one has the capability of improving the delivery of healthcare services to the masses.
While this task may not be easy, there are several steps that can be taken to make it happen. Some of the things that can be done are:
1. Contract management should be done carefully
A number of providers just choose to let the supply chain contracts fall through once the Group purchasing organizations (GPO) take over the contracting process. They are used by most hospitals for dealing with contracts because they can leverage the contracts based on the purchasing ability of the members in terms of negotiating. They can also be helpful for saving costs on products and services, but this doesn’t mean that providers shouldn’t examine the contracts at all. Prices need to be examined carefully and it is also important to address the market forces. Otherwise, the contracts may expire or they may be overcharged for products.
2. Inventory management needs to be efficient
There are numerous times when manufacturers find it difficult to move their inventory through the supply chain in a timely manner. If products are not used properly and they expire, this leads to lost revenues and can hurt profit margins. Therefore, effectively managing the inventory process is crucial. A quality equipment management system should be used by healthcare executives for managing inventory levels. Creating synergy is important just like collaboration as it can ensure maximum productivity because suppliers and providers work together.
3. Analytics and technology should be used
Effective technologies should be used for making successful improvements in the healthcare supply chain. Strong analytics support these technologies and suggest trends that make the supply chain management hassle-free and simpler. When automation and technology becomes a priority, you will be able to prevent financial waste and this will also encourage data-driven and transparent choices.
4. Implement an effective pricing system
You need to have a proper understanding of costs in order to ensure that an effective pricing system is implemented. Cost-accounting systems can be used here that can provide detailed information about the actual as well as incremental costs of every service. Such accounting methods are being used by numerous organizations as they can help in ensuring their pricing systems run smoothly. You also need to have a pricing strategy, which means collecting, tracking and managing information on labor, supplies and other expenses. Also, you should compare your pricing systems with that of competitors because you don’t want to lose your clientele.
5. Order cycle times and order accuracy should be improved
A substantial number of healthcare providers struggle in their ordering processes, which have a large error rate. Ordering the wrong products means considerable losses in revenue and facilities may not have the products required for providing some services. In addition, ordering errors are also a risk because they can often lead to medication errors as well thereby paving way for poor health outcomes. Proper controls need to be placed for ensuring order accuracy and reducing order cycle times as this can help in improving supply chain efficiencies.