As budgets get tighter and spring approaches, it's time to clean more than just your desk and office. This spring cleaning season, focus on cleaning your supply costs. Here's a guide to get started:
1. Understand your current vendor spend
For each vendor, you should understand the services and/or products they provide and whether the vendor is covered under your GPO. You should also ensure you have the current agreement and understand which costs are singular and which are recurring.
Contact your AP department for an annualized spend to provide a high level overview of the vendors you currently engage with. Prioritize these vendors by total spend or service/product category.
2. Plan your pipeline
Upon review of your AP spend, you will choose which vendors to target for cost reduction. Be sure to select a variety of vendors; some will provide quick wins, while others will present longer term projects to unearth the most savings.
3. Create a project plan
Each vendor you want to explore for savings should become its own project. Before engaging the vendor in cost reduction it is important to set a project plan to understand your current costs and future goals.
Your project plan will need to investigate your current position, the market competition, and the various strategies to consider.
4. Strategy exploration and implementation
After you've listed all the possible strategies and predicted results, it is time to determine what path to take.
Throughout due diligence, it will be important to consider which strategies will most benefit your organization. Key stakeholders and hospital employees working directly with the selected vendors should be informed of your cost reduction goals.
5. Complete implementation and document
Once you've completed your project with a specific vendor, it is critical to set up, maintain, and safeguard your process to ensure the continuity of savings. This will also confirm the hospital is realizing the new price points and/or reductions that have occurred.
As the final section in your project plan, be sure to document your project. Note what went well, what did not, what should have be done differently, etc. You should also plan when to revisit the project.
George Malik, the CEO of Quality First Solutions, has been in the healthcare industry for the past 30 years and has saved millions for hospitals nationwide.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.L