When Vendors Manage Your Inventories, Is it a Win-Win?
The answer to this question is MAYBE YES or MAYBE NO; it all depends on what your healthcare organization’s operating philosophy is! It’s been my experience that many vendors do an excellent job of managing a healthcare organization’s forms, office supplies, sutures, stents, pacemakers, orthopedic inventories, etc. This can provide a value added service that is hassle-free, low cost (or no cost) and saves your hospital inventory dollars over the short and long term.
On the opposite side of the coin, I have seen vendors that have bloated a hospital’s inventory with their highest priced feature-rich products just so they could make a few extra dollars on their accounts. Or, though benign neglect, one of my client’s vendors was costing his customer $196,239 annually because he didn’t perform any value analysis studies on the forms he was inventorying and ordering for this client.
Can it be a win-win? This is where your operating philosophy enters into the picture. We have talked to one for-profit healthcare system that won’t let their vendors do anything that their staff can do even if there is a savings by doing so. Then again, other hospitals, systems and IDNs we have talked to believe that if a vendor can demonstrate significant savings by managing their inventories, this then is a win-win for them. It’s your call…
One word of caution! I have always liked President Ronald Reagan’s philosophy of “TRUST, BUT VERIFY” if you want the results you expect, require, and are paying for from your vendor. I would recommend a quarterly audit of your vendor’s inventory process to ensure you are hitting the targets they promised, or else, you could be spending even more money than you ever anticipated with the wrong vendor.
Summing up, there is no right answer to the question, “Should you have your vendors manage your inventories?” As I said previously, “Maybe yes – Maybe no”. It comes down to this, “can a vendor do it faster, better and less expensively than your hospital can? Only you can be the judge of the answer to this question, but make absolutely sure that you can’t do it yourself.
Filed Under: savingsblog • Supply Chain
