What are the key elements of achieving a world-class hospital supply chain superiority?
This is important, because only a 5%-15% savings in supply costs can equal a 1%-3% improvement in a hospital’s total operating margin. It goes without saying that a keen focus on your supply chain can make a big improvement in your hospital’s finances!
This will be the first of a three-part series dedicated to achieving a world-class hospital supply chain superiority as well as what works against you in achieving it.
Let’s begin with what should be the obvious – your people. Having a great staff and great leadership is fundamental to achieving results. They’re the backbone of your operation, they’re the ones engaging with patients, and they’re the ones making the decisions that impact every area of your hospital. You have to ensure you have the right people in the right roles.
You also want to look at technology. Specifically, investing in it, and then actually using it!
If you walk into any other manufacturing environment anywhere in the world, you will see about 60% of the IT budget devoted specifically to operations and supply chain.
A recent study also showed that healthcare providers that make greater investments in back-office automation and process improvement enjoy operating cost ratios that are 2%-4% better than those of their peers. These percentages support the investment and utilization in technology, specifically in the supply chain.
To round off the first part of this series, you also need to create an environment of innovation. A hospital that doesn’t take the input of their staff and employees seriously is a hospital that isn’t operating to its potential. Their feedback is critical to your success, so promote innovation across your entire workforce.
Our next entry will share further key elements to achieving a world-class hospital supply chain superiority.
In the meantime, what would you say is another important factor to consider here? Share your thoughts in the comments.
The audio version of this entry is available at the bottom of this post.