Sunday, October 6, 2013
Supply Chain Management- Strategic Opportunities in Healthcare
This week’s supply chain management topic is the “21st Century Supply Chains: Challenges and Opportunities for Executives,” and of course I looked into how this relates to healthcare! As we all know, reimbursement rates for hospitals are slowing decreasing, as the focus has already begun to shift to value provided and away from volume. In order to save on costs, healthcare executives have begun to look in areas where they have never thought to look before, in order to reduce costs. One strategy currently taking place is improving hospitals' supply chain management in order to gain a competitive edge.
The article, “Driving Transformation in the Healthcare Supply Chain: Change Can Be Good for Your Bottom Line,” discusses how healthcare executives have found that supply chain costs are the second largest and fastest growing operational expense for most hospitals. These supply chains consist of too much manual processes and are reporting inaccurate data to materials management.
Leading healthcare systems such as the Cleveland Clinic has already begun to change their supply chain management, as one of their missions is to reduce $100 million out of their supply chain costs over two years. They have leveraged the use of technology and discovered that streamlining their purchasing, contract and pricing management, content management, invoice and payment automaton has made their supply chain more efficient and has reduced costs. The innovative part of the transformation of their supply chain is that Bill Donato, Executive Director of Cleveland Clinic Supply Chain Management, recognized that workflow improvements needed to be made as well, in order to complete the transformation. By improving the workflow and aligning resources appropriately, costs reduced and the processes became more efficient. They were able to cut $45 million in costs by transforming their supply chain management system.
The concept this week of nano-based RFID tags could work wonders in the healthcare industry. Labor costs would reduce drastically and would also help to improve efficiency in materials management. With that being said, is this a positive thing for RFID tags to replace the labor needed in supply chain management or a negative thing because they are eliminating jobs?