The business world has put new emphasis on taking cost out of manufacturing and delivering products. Take Wal-Mart’s mandated supplier RFID program, Toyota’s lean manufacturing principles and numerous quality methodologies like Six Sigma, Total Quality Management (TQM) and Business Process Re-Engineering.
Yet healthcare has not achieved the same level of process improvement and data integration as players in the manufacturing and retail environments. Very few providers have taken advantage of the estimated 3-9% in supply savings left untouched in most healthcare organizations’ supply chain operations todayi.
Much of the reason lies in the complexity of the healthcare supply chain itself. In the U.S., the healthcare supply chain involves more than 650,000 different organizations including manufacturers, distributors, carriers, GPOs, hospitals, users and patients.ii And there’s a level of unpredictability to the healthcare environment not experienced with manufacturing or retail — you never know exactly how many patients will come through your ED doors next Saturday night, let alone what their ages, acuity and diagnoses will be — so you need to remain in a constant state of preparedness for multiple scenarios.
While healthcare organizations won’t ever be able to control all the variables, they can eliminate many inefficiencies and errors by creating a more integrated and automated supply chain. The way to accomplish this? Implement an Event-Driven Supply Chain.
To learn more about improving inefficiencies and improving safety with the event-driven supply chain, download Operationalizing the Event-Driven Supply Chain.
i “Are you sure you’re really practicing value analysis? Or are you doing something else and simply calling it that?” Robert T. Yokl, Healthcare Purchasing News, April 2007.
ii “Transforming the Global Health Care Supply Chain,” MIT Center for Transportation and Logistics, Dr. Mahender Singh, James B. Rice, Jr., and David Riquier; July 28, 2006, pg. 2.
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