How can your facility or system save money and improve supply chain efficiency? The answers are in the data – but finding the insights within mountains of information can be daunting.
That’s where your supplier partner can help, says Jeffrey Waldman, Chief Administration & Operations Officer for Henry Schein Medical.
A supplier partner – in particular, a prime vendor distributor – has a great deal of information and can help you use to it find opportunities and drive efficiencies. For instance, your supplier has data and intelligence on:
- What you’ve been buying
- What similar facilities are using
- What market trends are driving changes in product demand
- What best practices can be applied to improve purchasing and logistics efficiency
“It’s not just about price anymore,” notes Waldman. “Customers need to attack total operating costs, and data is the key to unlocking this potential.”
Creating the right formulary
Your prime vendor can help develop formularies and custom catalogs for your users, Waldman says. “But before developing purchasing formularies, providers need to know exactly what they’re using now.” To help them figure that out, Waldman’s team meets with their customers to review their recent purchasing patterns and examine crucial utilization data: products bought, purchase frequency, net spend per line, and so on.
With this data in hand, the provider’s supply chain manager can better identify products which should be on the formulary, as well as expensive or non-standard products that are being purchased too often. From this, the supplier can create a custom catalog, allowing the provider organization to monitor and force formulary purchasing, greatly enhancing product standardization.
The purchasing history analysis often reveals opportunities to build and leverage volume. For instance, a health system that aims for 75 percent or greater compliance with GPO contracts may find that its actual figure is much lower. The custom catalog can be an important tool to direct purchases to formulary products, and the data analysis can also help supply chain managers identify the most common non-compliant purchases so that users can be retrained if necessary.
Improving logistics and inventory management
A thorough purchasing review will also reveal logistics opportunities, notes Waldman. “For instance, if you’re purchasing one item today and two tomorrow, there may be a way we can help improve the efficiency of your ordering habits,” he explains.
The next step is to better plan for demand changes. “We want to help our customers stay ahead of the market in terms of clinical procedures,” says Waldman. “We combine predictive analytics with current market intelligence to help our customers meet their clinical needs.” For example, if a prime vendor determines customers are conducting more checkups or procedures tied to type 2 diabetes, they can work with suppliers to better understand and increase access to products to serve those needs.
How do vendors predict what’s ahead? At least three factors come into play:
- The ability to interpret big data, as already discussed
- Market experts who keep an eye on clinical and financial trends impacting future demand
- Staff members who are very close to the customer, at locations all over the country
Waldman explains: “Some of our Healthcare Services team members even have dedicated desks on site at our customer locations, allowing them to help drive the strategic goals of the health system while observing what providers deal with every day. This helps us predict and address potential product needs at other locations.”
Electronic Data Interchange
EDI (Electronic Data Interchange) is a crucial tool that allows suppliers and providers to manage and leverage data, Waldman emphasizes. “It’s fast, effective, and allows for a much easier product review and approval process,” he says. When purchases are done electronically, through a single system, the provider gains a much broader view of its own buying habits and greater ability to identify improvement opportunities.
Healthcare organizations have very unique needs, but all are concerned about saving money and improving clinical outcomes. To achieve these goals, Waldman encourages supply chain professionals to take advantage of the support their distributor can provide. “As a strategic prime vendor partner, our job is to ensure we provide the best possible information to our customers. We want to educate while making sure each of our customers is choosing the right products, getting the best prices, and doing it all in the most efficient way possible.”