SCM hospitals play a significant role in amplifying efficiency and productivity. When hospitals and healthcare professionals have got all the required services and supplies and it helps them to offer better care to patients. Today, we’ll discuss hospital supply chain management; its definition, and top strategies.
What is Hospital Supply Chain Management?
Hospital supply chain management outlines all the processes and activities to make sure that the clinical staff of the hospitals has got all the equipment, medicines, medical supplies, and non-medical supplies to treat the patients. It comprises various functions and operations of material management, contracting, procurement, and other activities involved in receiving materials, services, and products that the hospital needs to take care of the patients.
Strategies for Hospital Supply Chain Management
Some of the top strategies for hospital supply chain management are as follows;
Optimized Inventory System
When medical supplies become expired, then you would lose revenue and profitability because doctors can’t use the expired supplies. It is significant to manage your inventory efficiently, and that’s why you should consider launching an equipment management system to control inventory.
You should make sure that you are ordering the right supplies in the right quantity based on the recommendation of doctors; ensure that t reaches the right department on time. The key is to maintain the low inventory level efficiently to avoid excessive material cost and space.
Launching an Effective Pricing System
Hospitals should beware of various costs and launch an effective pricing system. The cost accounting system would help you to process information relevant to the actual and incremental expenses of the provided service. Some of the other strategies to facilitate the pricing system and they’re as follows;
- Medicare cost allocation
- Charge-to-cost ratio
The pricing system of every hospital requires a proper strategy. It is significant to comprehend the cost-to-charge relationship. You should make sure to manage, monitor, and gather data based on expenses, labor, and supplies.
Process Automation & Gathering Data
You should gather as much data as possible to facilitate the SCM in hospitals and healthcare facilities. A plethora of information allows you to comprehend various patterns and trends of various departments and find opportunities for improvements. Often, the SC department develops partnerships with the 3rd party and the business intelligence helps you in terms of saving capital, consumable, and purchased service engagement.
It is significant to invest in the tools automation and data analytics technology; it would help you to make your SC processes into strategic business assets. If your focus is on implementing the right hospital technology, then it would help you to decrease financial waste and promote more transparent choices.
The 1st step is to outline the procuring responsibilities that fall under the category of procurement department. Procurement used to be the obligation of the capital management department, but the roles have changed a lot over the years. However, GPO (group purchasing organization) should comprehend and manage any local agreement that is already in place; analyzing the flexibility level of your organization to have regarding GPO.
Analyzing Procuring Controls
The best SCM strategy for hospitals is to increase automation and purchase control. The initial point is developing and analyzing your existing procurement procedures and policies including the order authorization process. The ERP system would create electronic procurement orders, but it needs electronic inventory input, and it amplifies accuracy in inventory management.
Many hospitals leave their contracts to the GPOs (group purchasing organizations), and GPOs use contracts to gain an edge over negotiation. It assists hospitals to decrease the cost of products and services. The GPO would manage various areas of your contract so that you could comprehend contract pricing. If you aren’t paying heed to the market forces and contracts, then you would overpay for the products and services. You should carefully analyze the contract and recognize the confidential clauses relevant to the negotiated pricing.
Turnaround Time & Accuracy
Some clinical mistakes emerge from the errors in the procurement order. If the procurement department orders the wrong products, then the hospitals would have limited tools to perform various types of operations. Patients would receive no medication or the wrong one, then it results in the form of malpractice charges and poor health conditions. Therefore, hospitals should place the right orders, it helps you to avoid the reorder the right product the 2nd time.
In order to avoid a shortage of supplies, you should beware and have full knowledge of the SCM inventory level. You should know the capacity of the suppliers to analyze consumption rates and demand patterns to predict future inventory requirements. If you timely predict the future shortage, then you could timely manage them before the occurrence of any type of crisis.
Including All Departments
It is important that you should bring all the stakeholders and staff on the same page and allow them to have an open line of communication with the SC team. The medical team would welcome the idea of change if they are aware of the SC goals and strategies. Senior management can’t comprehend the changes in the supply chains and their impact on various units.
Expense Decreasing Consultation
It is significant that you consult with SC and procurement professionals and learn how to decrease expenses. They employ advanced technology and employ mass data to decrease inefficiency, waste, and mistakes that are negatively impacting your profit margin.
Conclusion: Hospital Supply Chain Management
After an in-depth study of hospital supply chain management; we have realized that healthcare SCM is highly significant for the smooth operations of hospitals. If you are learning about hospital SCM, then you should keep in mind the abovementioned strategies.
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