Supply Chain Management

Purpose: As the second largest item on the budget, supplies and equipment represent approximately 30% to 35% of the total budget. Opportunities for savings from pricing and contract slippage are often are available for recovery. Inventory build-up and outdated stock cause money to be tied-up in storage areas throughout the hospital and require man hours to physically inventory and maintain. Often, overstock items can be returned for credit.

Inventory Reduction

  • Work with the Department Managers to identify and pull outdated, slow-moving and obsolete products currently on the shelves of the Storeroom and the Operating Room, utilizing Material Management Information System (MMIS) utilization reports.
  • Meet vendor/GPO representatives to determine additional expense reduction & inventory consolidation opportunities.
  • Consignment and/or improving the disposition of the value of expired inventory.
  • Work with the Pharmacy Director and the Pharmacy and Therapuetics Committee to identify and consider a closed Pharmacy Formulary (i.e., inventory reduction, standardization across drug classifications, etc.

Expense Reduction

  • Review select reports (i.e., A/P Vendor Master, GPO reports, Item Master, etc.) for supply and service expense reduction opportunities.
  • Establish a structure, techniques, forms, tools and training for the Value Analysis Team (VAT) or Teams. Recommend the possible ad hoc Team or Teams which will be identifying, quantifying and pursuing select topic expense reduction, cost avoidance and revenue enhancement opportunities (i.e., Orthopedic Prostheses Team, etc.).
  • Identify initial financial targets along with providing a “Hot List” of opportunities that have historically provided the greatest cost reduction potentials in peer Value Analysis Teams.
  • Work with the Hospital to “get the word out” regarding the VAT or VAT’s, their structure, membership, charge & charter, key initiatives and other information, then kick off the first VAT meeting and attend future meetings to assure a successful VAT process.
  • Work with Finance on the potential elimination of patient charge stickers using similar methodologies adopted at other Pennsylvania hospitals.
  • Work with Novation, AmeriNet and Materials Management on reducing the overall mark-up for supplies paid currently to Hospitals primary med/surg supplier.
  • Work with Information Services on the establishment of on-line requisition templates for supply-intensive areas and the MMIS.