Hospital Supply Chain - What It is?
As the Covid-19 pandemic continues to send waves of infected patients, there’s news almost every day of shortages. From car rentals and toilet paper to office supplies and food products, it seems more important than ever that your hospital retain and manage its supply chain.
Personal protective equipment (PPE) and testing materials are in such demand and experiencing shortages that the U.S. Food and Drug Administration had to put out a notice for the public. Even after the pandemic ends, it’s essential that you have a hospital supply chain in place to keep your corridors well-stocked.
What Is a Hospital Supply Chain?
A hospital supply chain is a series of procedures, vendors, and employees that get products or supplies needed by the hospital for patient care to the hospital and eventually to the patient or medical staff member who needs to use it. In some cases, part of the hospital supply chain includes the services of doctors and other clinicians.
If the hospital supply chain breaks down or lacks efficiency, it can cost your hospital a lot of time, money, and resources. For example, if your vendor for towels stops sending them and each department had to send an orderly to pick up new ones, the cost would include the time of a staff member, paying retail pricing, and a reduction in the quality of patient care.
The hospital supply chain affects both the finances and operations of your hospital, making it essential. For a hospital’s success, it needs a highly effective supply chain.
7 Key Components in a Successful Hospital Supply Chain
A supply chain isn’t a simple item that you can order. It’s a variety of people, vendors, practitioners, and procedures that make up a constantly evolving system. There are some components that play an important role in a successful hospital supply chain, including:
1. Strategic Sourcing
From Tylenol to hospital beds, your hospital needs a lot of supplies to run. Strategic sourcing helps to get the best products at the best prices in the most reasonable amount of time to meet the needs of staff and patients.
With strategic sourcing, you’re constantly evaluating your suppliers to ensure quality and pricing. After formalizing the procedures for strategic sourcing, it’s beneficial to consistently use them when identifying and selecting suppliers and contractors.
2. Effective Strategy for Working With Doctors, Medical Teams, and Leadership
Doctors and medical teams can be an essential part of a healthy medical supply team. These professionals bring their expertise and services in for the benefit of the hospital’s patients.
For example, if there’s a heart specialist in the local area that will only operate and run tests at your hospital, his supply of medical expertise brings a lot of revenue to your bottom line.
It’s essential to have an effective strategy when working with these professionals and gain buy-in from them. You might need to constantly analyze your strategy to ensure its effectiveness.
3. Consistent Monitoring of Monthly Expenses
Yes, there are always some months when more supplies are used than others. However, it’s a good idea to consistently monitor monthly expenses. A successful hospital supply chain is constantly adjusting the budget and finding new ways to save money.
This starts at the monthly level. A problem with the hospital supply chain might start slow and gain traction. If you’re consistently monitoring the expenses, you’ll be in a better position to catch any issues early and make the needed adjustments.
4. Effective Purchasing Controls, Spend Utilization, and Inventory Automation
With an effective purchasing control procedure, the hospital only does business with vendors who can meet your specific requirements and specifications. It’s always a good idea to have a vendor who can supply multiple items needed for inventory to get the best pricing available.
It’s always beneficial to carefully monitor your utilization of spending. You don’t want to spend more than you need to; however, periods of high traffic in your hospital can lead to increased spending with your supply chain.
Inventory is always an issue, and you don’t want to be caught without the necessary supplies. Shortages of medical supplies during the Covid-19 pandemic have become problematic as hospitals scramble to get inventory. Inventory automation should constantly contrast use and current orders to ensure new supplies are ordered to replenish the needed inventory.
5. Efficiency in the Supply Chain Processes
If the process isn’t efficient, the supply chain will never successfully meet the needs and goals of your hospital for inventory or cost controls. Imagine if one of the processes in your supply chain required a meeting of the hospital’s board of directors to approve any changes. The supplies and materials involved in that process would stop flowing until the meeting and approval.
While there might be many legitimate reasons for approvals, you need to ensure that these can be received quickly, so you get the needed supplies. Everything in your supply chain process should run smoothly with little to no outside interference to ensure maximum efficiency.
6. Develop Benchmarks for a Successful Supply Chain
If used correctly, the benchmarks established to determine the success of the hospital supply chain will reduce wasteful spending and subpar inventory. It’s essential to balance the cost of supplies with the quality and value they offer.
For example, it isn’t a good idea to buy sets for the beds that need to be replaced after a month if you can find ones that last for three months with only a nominal increase in price per unit.
As you review the benchmarks, it should be easy to see where there are any inefficiencies within the supply chain, so you can make needed corrections. Benchmarks can show success and failures within the supply chain, allowing practical adjustments to the process.
7. Managing Costs of Physician Preference Items
Physician preference items can be anything from a brand of gloves to the model of a machine. The hospital knows that there are advantages to purchasing these physician preference items as they’re typically higher quality.
However, it’s not a smart plan to end up with half a dozen brands of gloves because different doctors want different brands. It’s essential for making the most of the funds available for supplies to get a consensus among your medical staff.
If the quality of a product is an issue with a physician, then you might need to talk to the vendor and recommend improvements. There are ways to save money with this component of the hospital supply chain.
Benefits of a Healthy Hospital Supply Chain
When you’re putting a lot of work into establishing a healthy hospital supply chain, you want to know that there are benefits to all the hard work that you’re putting into the process.
Here are a few benefits to consider:
Improved Quality of Patient Care
When the hospital and staff have the right supplies for any given situation, the care of the patient becomes easier and the quality naturally improves. From medications to the correct members of staff, almost every patient has different needs.
A healthy hospital chain helps you meet those differing needs and improves the care offered to the patient.
Helps You Manage Costs
If you don’t have a supply chain in place, it’s hard to keep up with the money actually being spent on individual items. With a healthy hospital supply chain, it’s easier to manage costs and negotiate lower prices from the vendors, especially if the order is large enough or the contract extends over a longer period of time.
Maintain Consistent Levels of Inventory
Sometimes, the supply closet has a glut of tongue depressors but not enough gloves. With a hospital supply chain, it’s easier to maintain consistent levels of inventory, so the staff and patients always have what they need when they need it and valuable storage space isn’t being utilized with excessive amounts of inventory.
Easier to Analyze for Weakness and Ways to Cut Costs
A healthy supply chain has procedures in place to handle the flow of inventory and services. These procedures are easier to analyze than a hospital without procedures in place. When the supply chain is easy to analyze, it’s more likely that an audit will reveal areas of weaknesses, so you can make improvements. These audits can also highlight ways the hospital can reduce costs without reducing the quality of patient care.