July 29

Hospital Supply Chain Benchmarking


Hospital supply chain benchmarking as an art and science hit its peak in the 1980s when Robert C. Camp published his book Benchmarking: The Search for Industry Best Practices That Lead To Superior Performance. Camp explained in simple terms that benchmarking is the “process of consistently researching for new ideas for methods, practices, and processes, and of either adopting the practices or adopting the good features, and implementing them to obtain the best of the best…(results).”

What is most misunderstood by practitioners about this art form is that benchmarking isn’t about numbers, metrics (key performance indicators), and reference points, but instead is about identifying “gaps” in your current performance and then searching for best practices to improve your future performance levels.

It’s also critically important to understand what is behind the numbers. A few years ago, one of our client’s form’s cost per patient day was about .35 cents vs. our traditional benchmark of .60 cents. When we investigated how this could be happening, our client told us that his healthcare system went paperless about a year prior.

Improve Cost Management

Bingo…we just uncovered a new best practice to improve the cost management performance for all of our clients. This wasn’t an accident that we uncovered this new benchmark, since our firm had institutionalized benchmarking many years ago to improve our clients’ cost management performance. We are always looking for “gaps” in our clients’ cost management performance and then searching out new and better best practices to elevate their performance over time.

Our point here is that hospital supply chain benchmarking is a never-ending search for best practices. It’s not a one-time event or whenever the mood strikes you.

Hospital Supply Chain Radar

You need to have a system in place to continuously benchmark everything that is important in your supply chain operation’s performance (i.e., people, projects, and performance) especially when it comes to expense and cost management. Since things change and people change at a rapid pace, your supply expense cost structure can change almost overnight. How would you know that it changed if you didn’t have a process in place (like supply chain radar) to identify your performance gaps?

It should be common sense that institutionalizing benchmarking to improve your hospital’s supply cost management performance is “mission critical” in these uncertain and volatile economic times. Without constant benchmarking, you will be flying blind without a navigator to keep your supply chain operations on a steady, level, and direct course to success.   

Articles you may like:

4 Things Supply Chain Leaders Need to Know About the Benefits of Benchmarking

Healthcare Supply Chain Managers: What is the Biggest Difference Between Price Savings and Supply Utilization Savings?

Supplier Relationship Management: What Do Your Suppliers Think of You?

Request Demo of SVAH’s Value Analysis and Utilization Tools


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