The reason for this circumstance is that this function, at most hospitals, has been outsourced to your department heads and managers with disastrous results. We have seen department heads sign purchase service multi-year contracts that have cost their hospitals hundreds of thousands of dollars a year just due to benign neglect. Other department heads have missed deadlines on contract renewals that roll over for another five years without any renegotiations. Or, there have been instances when they have committed their hospital to a copier contract that had no cancellation clause. 

 

To stop this train wreck, it is now time for supply chain professionals (as other industries have been doing for years) to step up to the challenge of administering these contracts from start to finish, since there is no other department in your hospital that is more qualified to do so. You have the training, discipline, ethics and know-how to rein in your hospital’s multi-million dollar portfolio of purchase service contracts. 

 

I know you don’t have the time or staff to do so now, but that doesn’t mean that you should continue to let these millions of dollars in contracts be outsourced with dire consequences to your department heads and managers. It’s time for you to develop a proposal to your senior management to take over this function that can save your hospital 11% to 18% right out of the gate. 

 

I call this building a case for change by showing your C-suite how much they can save on their purchase service contract portfolio by having your supply chain department professionally manage and control these contracts.  Why let this madness continue any longer?