Collaboration and accountability are evolving as the new pillars of the U.S. healthcare system. Yet they will not stand the test of time without the support of an increasingly sophisticated healthcare value chain that unites providers and suppliers as efficiently and cost-effectively as possible.
In response, supply chain leaders understand that they must leverage innovation to produce measurable results for their organizations. Additionally, they are finding unique opportunities in vendor sourcing technologies.
Laying the foundation for a robust supply chain by identifying trusted partners is one of a buyer's most critical roles. It's so important that many hospitals are taking on the tremendous task of self-contracting initiatives despite the tremendous costs and resources involved. The fact remains that although there is a wealth of unqualified information available to these organizations — delivered via the Internet or generic buyers' guides, for example — finding qualified suppliers can be one of the most difficult tasks. On the surface it's tempting to rifle through one of these familiar mediums in search of potential vendors. But providers looking to maximize their supply chain effectiveness and lower their risk of entering into risky partnerships due to regulatory issues are turning toward solutions that can intuitively source trusted, pre-vetted industry suppliers.
Many options, few real solutions
The Internet is a valuable source of information, even in the healthcare industry. Nearly every legitimate company has a Web presence that describes its principles, explains its product or service offerings and provides a means for contact. But while a supply chain manager at a hospital may desire to use the Web to conduct a cursory search for office equipment, for example, they will quickly be exposed to hundreds if not thousands of companies that have yet to be vetted. And options for narrowing results (such as by local companies or those that are owned by women or minorities) according to the hospital's specific requirements with traditional search engines are extremely limited, leaving the manager with flimsy brand impressions and unqualified leads.
There are also significant risks associated with traditional Internet searches. Misunderstandings can easily arise as to a company's size, scope or credentials, leading buyers to spend an inordinate amount of time and resources chasing a dead end. Similarly, traditional search methods often do not reveal the appropriate information a hospital requires to fulfill contract requisites, such as partnering with minority- or women-owned businesses. Furthermore, it's often hard to decipher via the Internet whether or not a company is truly local or simply operates a branch office in the region; delivery times could be severely delayed if the vendor needs to ship supplies from their warehouse halfway around the country.
A buyer's private network of associates can be invaluable for finding the most suitable suppliers. As a result, many supply chain managers will rely on an industry-specific listserv to find qualified, credentialed vendors. Although these peer-to-peer queries are more efficient for finding trusted partners than traditional search engines, they narrow the pool considerably by calling attention only to products and services recommended by the participants. This medium also resides in the public domain. Not only will organizations expressing interest in a particular solution be bombarded with unsolicited marketing messages but the organizations also risk exposing their strategic plans to a competitor.
Other providers rely heavily on group purchasing organizations, searching for products at a relatively reasonable price point. Many organizations appreciate these relationships because they can avoid a drawn out contracting process and they are generally assured the vendor is qualified and credentialed. But GPOs often stick to big-ticket items, leaving the organization to find other sources for more routine supplies. Healthcare organizations also give up some control over their supply chain purchasing decisions with a GPO, such as a preferred-vendor arrangement.
While published buyers' guides have long been an industry staple for sourcing healthcare equipment and supplies, they too, are losing favor among supply-chain managers. Providing laundry lists of hundreds of unqualified leads, they often contain out-of-date or inaccurate information. They are also difficult to search, and they limit a company's ability to promote its brand in a unique fashion.
Sourcing in a controlled setting
To gain the greatest efficiencies, providers are turning to more effective sourcing solutions, including secure online technologies that can perform vendor searches along any number of variables. For example, a manager may desire to find only credentialed vendors offering the product or service their facility requires. If too many results appear, they can narrow the initial results based on company region, size or female or minority ownership.
Sourcing technologies can even serve as a platform to engage colleagues for comments about previous experiences with a particular vendor, such as RFP processes, contracting details, product quality reports and customer service levels. Unlike a listserv environment in which anyone is welcome, controlled sourcing allows users to manage their own privacy settings, granting query to as many or few individuals as they desire.
This technique is emerging as a vital part of hospitals' overall controlled procurement management efforts that include platforms to facilitate solicitations and vet and monitor vendors' regulatory and internal compliance at the time of contracting and throughout the vendor relationship lifecycle. With technical capabilities that direct potential vendors to register with the organization as a valid supplier, their information will be readily available when the buyer needs access to their services. With all components operating in harmony, hospitals will have an additional tool for injecting efficiencies and stripping unnecessary costs from the supply chain.
Supporting the value chain
Today's vendor sourcing solutions are building on past successes, merging Internet tools and peer-to-peer networking solutions with ever-intuitive, multidimensional search features. The result is a secure technology that allows providers with little knowledge of their purchasing options to quickly generate a short list of credentialed vendors that precisely match the hospital's criteria. Applied as a complete procurement package, the supply chain can adequately vet their suppliers and quickly move them through the contracting process.
Healthcare organizations appreciate that a complete vendor management solution allows them to maintain control over every step of the procurement cycle. And vendors benefit from the power of a network that can identify purchasing behaviors, creating an accurate profile that matches the appropriate provider and vendor contacts. The net result is a true value chain based on a communications platform that unites providers and suppliers committed to lowering costs and creating an exceptional environment for clinicians, staff and patients alike.
Chris Luoma is a vice president at Vendormate where he is responsible for connecting potential customers with qualified sellers in the healthcare space.
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