March 31

Healthcare Supply Chain and Finance Department Alignment


About 80% of healthcare supply chain departments report to the finance department in their organization, but are they aligned together for success? By aligned we mean, are they on the same page to be successful?

For example, if your CFO is stretching out payments to your suppliers to improve his/her cash flow it makes it difficult for the supply chain department to gain price concessions for these same vendors. Or, if your supply chain department is not controlling your official inventories it can put a strain on your CFO’s cash flow.

The obvious answer to this dilemma is for both departments to see the big picture so they can operate in unison vs. in discord. This can only happen if communication becomes healthier between these two departments. Even a weekly meeting might not be enough to get you on the same page with your boss, since everyone is too busy day-to-day to look at the big picture.

A Strategic Healthcare Supply Chain Plan is the Answer

The easiest way to achieve healthier communication between supply chain and finance is by the development of an annual strategic supply chain plan (SSCP). This will enable you to ask your boss how he/she sees your mission, goals, and objectives for any given year. More importantly, you need to have a section in your SSCP that discusses your alignment with finance such as:

  • What should our healthcare organization’s position be on payment terms with our suppliers, so we don’t surprise them after their first delivery?
  • How much inventory on hand is permissible, on average, for most departments in our hospital?
  • What supply chain statistics would your CFO like to see on a monthly, quarterly, and annual basis?
  • What preferences should supply chain give local suppliers vs. national suppliers?

These and other questions need to be asked to fully understand your CFO’s position on these topics. Naturally, you can negotiate with your CFO an equitable set of hospital policies before finalizing your SSCP.

Align Supply Chain and Finance for Success

The SSCP exercise we are suggesting is in lieu of just letting things happen in an unplanned or accidental manner. It takes the guessing out of most big decisions and it will align supply chain with your finance department for success.

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