"If you can't measure it, you can't improve it."
We love the above quote by Peter Drucker — widely regarded as the greatest management consultant of all time — and have adopted it as a central theme in white papers on procurement for healthcare providers.
Most hospitals have invested in automated technologies for managing inventory and procurement. The same is not true for the bulk of non-acute care providers, and that means these facilities miss out on significant savings in time and money. There are easy-to-use systems designed just for the non-acute practice type and size, and they yield a real return on investment.
Sourcing and Product Selection
While working with a recent client to implement our SmartPO system, we found some interesting facts. This group’s initial location had purchased a total of 143 unique items from their primary medical supplies vendor in the previous six months. When we assembled the list of items purchased by their second location from the same vendor, we found that location 2 had purchased 243 unique items. Both offices are the exact same specialty, and the second office is actually smaller in size and patient volume. We found only 37 common items between the two offices.
Real World Purchasing Inefficiency
Office 1: 143 items from Vendor A
Office 2: 243 items from Vendor A
Common items from Vendor A: only 37
Of course, efficient purchasing utilizes volume discounting as much as possible. GPO (Group Purchasing Organization) contracts are usually structured so that the greater your volume or commitment on products, the lower your costs. The above example highlights the need to cross reference purchases to identify where you are taking advantage of volume discounts... and where you’re not. To follow Peter Drucker’s advice, you must be able to assimilate and analyze purchases in order to look for efficiencies and savings. That’s nearly impossible to do with manual purchasing.
Streamlining products across locations also allows for borrowing and sharing when needed, such as during the pandemic, when many practices saw unprecedented shortages and delays. If each office uses different items, options for getting through a crisis can be significantly diminished.
Creating Procurement Efficiencies
Think about your procurement process with a manual system. Usually, a staff member is assigned the task of ordering supplies each week. Their minimal instructions generally consist of something like, “We use ABC Medical for our basic medical supplies and XYZ Pharmaceuticals for our drugs.” They are then given a log-in to each supplier’s website and are on their own from there. Each week they log in on as many websites as you have suppliers and key in their orders, hoping they are purchasing the correct items, and completely oblivious about what your other offices buy. Their goal is to restock the cabinet and finish the task as quickly as possible.
Compare that to how orders are placed on our SmartPO platform. Our implementation team helps you build an item master for your group, which can be used across all locations for purchasing consistency. We help you decide what products you want to buy and what vendors you want to buy them from. Your staff members then log into one place, SmartPO, to begin the purchasing process for the items they need. SmartPO begins to build purchase orders in the background to direct purchases to vendors you have pre-selected. Syringes may come from Vendor A, elastic bandages from Vendor B, and office supplies from Vendor C.
As you add items to be purchased, SmartPO automatically builds a separate purchase order for each vendor.
In the absence of a full-time materials manager (which you would no doubt like to have but can’t justify), procurement falls to staff members, who understandably want to complete it quickly and return to their primary duty of patient care. A system like SmartPO speeds up the process for them, while at the same time accomplishing the broader goals of managing what you buy, who you buy it from, and at what price. Everybody wins.
In an interview with a manager at a recent installation of SmartPO, we asked their opinion of SmartPO’s top benefits. Their answer: “Time savings and efficiency.”
You likely realize that you do not have tight control of your purchasing process, but you might be unsure of the best way to improve it. Even if you’re convinced an automated system is needed, you might be reluctant to undertake its installation. With SmartPO, we understand that you don’t have a materials manager or a supply-chain team, so our staff handles the heavy lifting to get your practice up and running quickly. Our on-going contact, advice, and recommendations assure optimal results.
SmartPO has been in use by non-acute providers of all specialties since 2006. It was designed and is continually enhanced with input from providers just like you.