Five levers to improve supply chain management
03 July 2017
For local healthcare leaders the choices are becoming harder and harder as they have to decide how to prioritise their finite resources and are struggling to guarantee safety and quality of care. The system needs significant transformation to address these challenges so that resources can be freed up and more effectively targeted at securing the best possible patient outcomes.
- Around 30% of a hospital’s budget is spent on supply chain activities.
Efficiencies in supply chain management was a key area identified by Lord Carter in his report on operational productivity in acute hospitals (2016). It has not always been seen as a priority within the NHS but that is changing as more people begin to understand the benefits it can bring. The healthcare sector is beginning to learn the lessons of other industries such as retail or automotive where supply chain systems ensure availability, effective use of supply and analysis of future requirements. As approximately 30% of a hospital's total budget is spent on supply chain activities, a step-change in performance is not simply a ‘nice to have’, it is crucial to deliver the savings that trusts need to make substantial savings and return to financial sustainability. But the benefits are not just finacial - through data tracking and analysis there is also the potential to improve quality of care and, therefore, patient outcomes.
Through our work with a number of NHS organisations we have observed significant challenges within the supply chain many of which are adding unnecessary costs to healthcare delivery. As a result we have identified five levers which we believe impact the supply chain and allow hospitals to transform systems and benefit from overall care improvements:
- point of use data capture - capturing demand data closer to the point of healthcare delivery and investing in point of use technologies to evaluate costs and innovation;
- control tower coordination- having a centralised, end to end view of supply chain operations and procurement, with integration to patient schedules;
- tackling clinical variation - measuring efficiency and effectiveness in care delivery and reducing variation in clinical preference, whilst improving cost performance;
- strategic inventory management - managing inventory centrally and more strategically in order to release cash and control spend;
- enhancing supplier relationships - finding the right supplier, paying the right price and creating partnerships for the right patient outcomes.
Hospitals can no longer afford to make purchasing decisions solely based on cost. Efficient, precise supply chain management is more important than ever before.
For more information please contact us using the details below and read our recent report Capture, control, analyse and share - How strategic supply chain management can enable affordable high quality care in hospital.