Today’s consolidated service centers require well-thought-out strategies in order to effectively meet the goals of their overarching organizations.
By Alan Cherry, Dail-e News Editor
Running a consolidated service center (CSC) is not just about setting up four walls and doing self-distribution. Approaching it as such is setting yourself up for failure, said supply chain leaders during a recent ANAE panel discussion. In a panel moderated by Supply Chain Sherpa’s Jeromie Atkinson, supply chain leaders discussed consolidated service centers – how they got started, where they are now, and where the trend is moving forward. Participating were:
- John Lebowitz, recently retired VP of supply chain ops for Stryker
- Greg Swanson, CEO and co-founder of National Medical Logistics.
- The following were five takeaways from the panel discussion.
- The CSC model and its purpose have changed over the past couple of decades. When CSCs first emerged, they were very hospital-centric but, just like health systems, they’ve since become much more diversified. Supply chains at healthcare systems today have to account for not just hospitals but physician offices, surgery centers, even extended care facilities and more. And all those points of care now are finding themselves flowing through a CSC.
- Running a CSC is not just about setting up four walls and doing self-distribution. Approaching it as such is setting yourself up for failure. Creating and maintaining a CSC must be incorporated into the healthcare system’s overall strategy; it’s not simply about having a better warehouse widget.
- There is no “one size fits all” model for consolidated service centers. When starting a CSC, the healthcare system must determine the strategic objectives for their specific needs. It’s critical to develop a business case that outlines the cost, objectives, expected outcomes and general timeframes, as well as numerous other service support elements of the anticipated model. However, to do so requires real transparency within the organization as well as with its supplier partners.
- CSCs function best when the relationship between suppliers and providers is collaborative instead of transactional. When starting a CSC, it’s important to bring all parties to the table and have a frank discussion about how to get away from a contentious relationship to a much more invested program, where everybody has “skin in the game” and there is visibility all the way through.
- There are going to be growing pains, but once those bugs get worked out, the returns can be seen throughout the entire organization. When a provider embarks on a CSC, what they’re really saying is, “We’ve decided we no longer want to outsource our supply chain to certain areas, and we want to take more accountability for them.” That accountability flows throughout the supply chain, and the net result is an increased collaboration and an enhanced level of inventory availability that the clinician can see, right down to the point of care at bedside.