Chances are you’ve noticed that your assisted living facility’s supply chain costs are the second-highest of all your operating costs (the first/highest cost more than likely is for labor/employees).
Most assisted living facilities want to cut costs as much as possible without hurting resident care. That pretty much leaves out cutting back on employees.
But reducing your supply chain expenses is doable. You may think you’re stuck with the status quo, but the way to save money when it comes to your supply chain is … streamlining it!
If you don’t already have one, consider hiring someone to head your purchasing initiatives. Depending on the size of your facility – and especially if your company has assisted living centers in more than one location – it may be wise to hire a Chief Purchasing Officer, or CPO. Hospitals have been asking CPOs to lead their purchasing departments for more than a decade and smaller healthcare facilities have seen the wisdom in the position and have followed hospitals’ example.
Your CPO or director/manager of purchasing would be tasked with managing and leading all purchasing initiatives with the goal to reduce costs for goods, services and even equipment outside your normal supply chain. Another goal could be to standardize supplies, thus reducing costs.
Creating a purchasing system for all equipment and supplies will go a long way toward lowering your overall supply expenses. What’s more, an actual system will streamline your inventory procedures, thus saving time and therefore money.
Several hospitals and healthcare facilities also are taking action similar to major retailers: getting rid of middlemen and purchasing in bulk (and receiving volume-based discounts). In addition, they are incorporating the power of price competition, at will, when possible.
Such strategies could reduce costs tremendously. In a 2009 article, HealthAffairs.org wrote that a similar approach could reduce a hospital’s or medical facility’s costs because creating streamlined layers in a supply chain by instigating purchase volume reduces costs (and might even improve care).
Incorporating such practices might mean that supply chain costs as well as labor hours very well could be reduced considerably, thus saving money. Cardinal Health stated in a 2011 white paper that one of its large healthcare/hospital system clients saved almost $20 million on surgical and medical purchases, as well as more than 24,000 labor hours since 2006 within the system’s pharmacy.
G.A. Smith is a freelance writer for Right Click Software by Signature Solutions LLC.
Image courtesy of jscreationsz/FreeDigitalPhotos.net
