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As healthcare reimbursements are continually squeezed, hospitals are looking for ways to improve performance across the entire supply chain. Only by identifying and eliminating supply chain waste can hospitals reduce the second largest cost after labor on their balance sheets. But how can this be done? A look at auto industry best practices offers healthcare a new model.
A recent article published by Becker’s Hospital Review shared insights from Steve Thompson, a 20-year supply chain veteran of the automotive industry, now director of Patient Driven Supply Network for Cardinal Health. Thompson discussed why a new “pull” model of demand should be adopted by hospitals. In this model, Thompson said, supplies are restocked for exactly what is used, and only the most logical unit of measure is considered.
With a true “pull” model, hospitals no longer have to store supplies that were ordered based on historical trends or convenience, and they’re not wasting money on overstocks that expire before they can be used. Instead, they replenish supplies as they are actually used. For example, the article said hospitals today spend more than $36 million per year on wasted orthopedic hip and knee implants; that single statistic contributes to a $5 billion per year loss for the healthcare industry.
To truly make the “pull” model work for hospitals, accurate, real-time data is needed to inform smart purchasing decisions. OpenMarkets gives hospitals the tools to make this happen, providing the robust demand data they need to internally aggregate and plan for system-wide purchases from manufacturers.
As hospital strive for a more sophisticated level of supply chain management, OpenMarkets gives them the real-time data and information necessary to make optimal purchase decisions. Contact us to schedule a demo.