How Long Will You Wait to Save?Posted:Feb 6th, 2015 10:41 am
By John Freund
It can be hard for supply chain leaders to make decisions that drive change. With patient care at the heart of everything you do, changing a business practice almost seems like you’re choosing to take a risk. But not making change that reduces cost is also a risk and in today’s hospital economy, the pressure to drive costs down keeps building.
In a 2014 survey*, 91% of hospital C-level executives and supply chain leader respondents agreed that “supply chain management is one of the top three expense reduction strategies hospitals will use to the meet the challenge of healthcare reform.” With pressure on the supply chain to lead and deliver cost reduction strategies, can you really afford to wait? And how will you deliver these savings?
Look first at inventory management. Some examples of improvements you can quickly achieve include:
- Reduction of inventory dollars by 20% or more. (If your annual med-surg supply spend is $2,000,000, your savings could be $400,000+ a year.)
- Reduction of supply management labor costs by 10% or more
- Reduction of procedure rescheduling and cancellation costs
- Reduction of supply costs by eliminating maverick spending
- Reduction of IT spend by putting inventory management in the cloud
- Elimination of lease, administrative and reordering fees associated with cabinet systems
- Significant improvements nursing satisfaction, with positive impact on patient satisfaction
Consider cloud- and mobile-based inventory management technology. With quick and easy implementation, you could begin reducing costs within days or weeks. Has it worked? Yes – here’s one example: A medical center in Pennsylvania (see PDF case study below) moved their emergency department from a cabinet-based system with 10% nursing satisfaction, to a 2Bin system with over 90% nursing satisfaction and drove:
- A reduction of 2hrs,14mins spent by nurses (per 12 hour shift) stocking rooms and carts
- Approximately $353,000/year paying nurses and supply technicians to restock
- Elimination of 52 Pyxis machines in the ED, eliminating $300,000/year equipment leases
- Savings of $70,000 in line charges in the first year
Based on your supply spend, you could be leaving hundreds of thousands of dollars in savings on the table. Every month that goes by adds up to more lost savings opportunities.
Or you can take action and start achieving savings by changing your inventory processes. Regardless of your current ERP system or current inventory management processes, there are actions you can take now that will start delivering results immediately!
*Survey research conducted by Jamie C. Kowalski, CEO of Jamie C. Kowalski Consulting, LLC