Achieving the ‘perfect order’ has been the holy grail of the order-to-payment cycle in healthcare. It’s a lofty, but essential goal, given the high cost of errors associated with errant orders; costs generally associated with a lack of automation.
The aim of the ‘perfect order’ is to process a purchase order electronically - from order to payment - without human intervention, and make sure it is delivered to the correct location, on time, undamaged, at the correct price with the desired quantity, all on the first attempt. It’s a goal all providers and suppliers work to achieve every time an order is placed.
Historically, the obstacles to achievement were many. Those obstacles included inaccurate prices, contract misalignment and the inability to identify errors before they appeared on invoices. Little to no automation was present in the payment cycle, requiring a great deal human intervention at each step of the process. And, there were few tools that enabled providers and suppliers to communicate and collaborate easily, in real time.
As greater levels of automation are available to the payment cycle, including new social collaboration tools, it may be time to adjust the definition of the perfect order. The outcome cannot be compromised, of course. Orders must be delivered at the right price, right time, right place and with complete accuracy. But, the value of some human intervention in delivery of that order requires new appreciation.
While “without human intervention” is the right, high bar for success, there is critical value when human intervention happens at the right time. Our definition of excellence in the order process should include active, real-time collaboration between partners.
Perfect order tools have included prioritizing clean data, price accuracy and contract alignment. Yet, order errors and discrepancies still occur and they are costing providers and suppliers significantly in downstream processes, such as inaccurate invoices, payments and products. To prevent these downstream errors, it’s time to add trading partner collaboration for a new definition of the perfect order.
What is needed is a way to accomplish the “perfect adjusted order.” That’s where social collaboration between trading partners can get the industry more consistently to accurate orders.
Until recently, the tools to accomplish this collaboration haven’t kept pace with the need. New technology tools are required that enable high levels of social collaboration that allow providers and suppliers to intervene in an order process while it’s happening, not days or weeks later. For example, partners can identify a discrepancy mid-process, connect immediately with the trading partner, resolve the issue and send the order on its way before it reaches the point of invoice or payment with an error. It’s human intervention, but in a way that prevents all the downstream costs associated with order errors – with the least possible hassle for all.
Collaboration is the essential component to a practical application of this goal for the perfect order.
Key steps to the “perfect adjusted order”:
1) Clean up your data. Content management is critical to accuracy in your materials management system, from item master to purchase order history.
2) Implement a price automation solution. Hundreds of thousands of price changes occur daily and the only way to maintain price accuracy is through automation.
3) Monitor your orders. Ensure that orders, and order traffic, are processing accurately.
4) Address discrepancies early. When you receive discrepant order confirmations from suppliers, work to resolve the issue quickly - this an early indicator of problems that are going to show up in Accounts Payables and other down stream business processes. Fix those problems (both for that order and the core system data) before they get there.
5) Work collaboratively with your supplier. Talk in real time to interrupt discrepancies, resolve and fix the issues.
6) Embrace the adjusted perfect order. Not every order is a truly perfect order, but if you can identify and address problems in mid-process and quickly adjust them, you are back on track to delivering a perfect order.
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