Considering the tough economic environment healthcare organizations find themselves in due to reduced reimbursement from third parties, it has never been more important for supply chain leaders to have an efficient and effective supply chain and eliminate costly mistakes. Accordingly, here are five significant mistakes supply chain leaders should avoid at all costs to survive and thrive in the 21st century:
1. Reluctance to adopt technology: Embracing new technology is the little-known secret to greater supply chain productivity, efficiency, and effectiveness. Furthermore, technology helps in simplifying even complex tasks, such as value analysis analytics, so that even an inexperienced staffer can master this discipline with ease.
2. Not performing supply savings audits: “A savings isn’t a savings until it is validated,” should be the mantra of all supply chain leaders. Based on our research, 23% to 46% of the savings you are reporting to your senior management never happens. As professionals, we can no longer submit savings reports to our CFO, COO, and CEO that aren’t authenticated. Or, we risk losing our c-suites’ confidence in our facts, figures, and statistics.
3. Failing to control utilization misalignments: Cost management isn’t just about the price at the pump in the 21st century. It is now all about the cost per mile or the utilization (or in-use) cost of the products, services, or technologies you are buying. For you see, you could have the best price in your region on a commodity you are buying, but this same product, service, or technology could still be costing your healthcare organization hundreds of thousands of dollars annually in utilization costs.
4. Failing to develop a supply chain strategic plan: It is said by Alan Lakein, business author, that “Planning is bringing the future into the present so that you can do something about it.” It’s performing a SWOT (strengths, weaknesses, opportunities, and threats) Analysis to understand where your supply chain organization is today vs. where it needs to be tomorrow to meet the goals and objectives of your healthcare organization, as opposed to ‘winging it”, which never ends well.
5. Neglecting succession planning: How many times does a healthcare organization need to recruit from the outside new supply chain leaders? Too often in my estimation. You may not realize it, but it is the supply chain leaders’ responsibility to develop (through training, mentoring, and new experiences) their current employees to succeed their bosses (including you) as openings occur due to retirements, promotions, or transfers, etc. To do otherwise is to relinquish your leadership role.
If you meet future and current supply chain leaders, as we do on a regular basis, you see that they have one thing in common: They are always experimenting with new ideas for improving, refining, and streamlining their supply chain operations to ensure they are always on top of their game.