We communicate in some fashion (e-newsletters, newsletters, letters, Podcasts, etc.) with literally thousands of supply chain professionals annually. We also talk to hundreds of individuals in our supply chain community by phone or e-mail each year.  So we feel we have a good understanding of what’s going on in the healthcare supply chain marketplace.

 

To our amazement, only a handful of supply chain professionals that we talk to each year have any decision support tools that they are employing to make their savings jobs easier.  In fact, I was talking to a competitor of ours a few months ago who agreed with our assessment.

 

Now why is this important?  As we have stated repeatedly over the years, you can’t see or reduce variations in your supply spend with the naked eye! You will need one or two power tools to do so, just like any other toolbox.  One tool can’t handle all of your jobs!

 

The first power tool that is required is spend manager that can do your price benchmarking for you and hopefully will do your compliance work for you too. If you don’t have one that is GPO natural, then you are missing big savings opportunities that are now hidden from your view now.

 

The second power tool that we would recommend is a utilization manager, since utilization is where 79% of all of your new savings resides. If you don’t have this tool in your toolbox you are only getting your job half-done! It will enable you to dig and drill down into your supply spend to identify anomalies in your purchasing trends, patterns and practices that are eating away at your bottom line.

 

Our point here is that healthcare supply chain expense management is no longer an intuitive process, but a scientific methodology that needs the power of technology to get it right. If you don’t have any power tools (or you just have one) in your decision support toolbox then you are missing an opportunity to gin up your supply chain expense savings by a multiple of 3, 5 or 7.  Don’t miss this opportunity to get better than just good.