Supply Chain and Cost Cutting within a Hospital
Managerial Accounting, BUS 630
July 4, 2011
Supply chain management is commonly used to refer to the coordination of business processes across the companies in order to better serve the end consumers
(Brewer, Garrison, & Noreen, 2011). Cost cutting is basically being able to cut the cost safely of some organizations without having to close down. In this paper I will be discussing the issues that many organizations face when it comes to the proper supply chain management. The specific area in which I will be talking about will be hospitals and how a lot of them have not moved from the materials ...view middle of the document...
The supply chain management should really only focus on the total impact of the care of the patients and not the product acquisition costs. They should be able to look at the value and how it will hopefully affect in a positive way on both the patients outcome of care and also the cost of there care. An effective supply chain management can be very rare across any of the hospitals nationwide. Many of the healthcare organizations still work with the materials management and also all the purchasing departments. Many of the hospitals have also changed the name of material management to supply chain, but have been using the tradition materials of the material management operations; many of these departments are unable to take advantage of the new practices (Mangione & Stark, 2004). Many of the supply chain leaders do not have the title or corresponding authority to be able to use the policies that are required for any of the supply chain improvements. The hospitals supply chain leader should be able to enforce the central purchasing, improve inventory management, and redesign the logistics and procedures across an organization (Mangione & Stark, 2004).
There are some things that the supply chain managers will need to do in order to move into a more strategic focus and listed are just a few:
• Analytic skills to evaluate the spending history and analyze the cost-benefit.
• Project management experience to leverage across functional expertise from departments across different organizations.
• Facilitation skills to ensure different points of view are considered when developing strategies.
• Professional skills to communicate effectively across the organizations
(Mangione & Stark, 2004).
Many hospitals make many changes that could end up resulting in having much lower costs, but then measure results in weeks instead of it taking many of years to accomplish. In order to be able to become successful and sustainable over a long term a supply chain must focus on the process design and also the attitude change, while also enabling the technology (Mangione & Stark, 2004). The hospitals are able to achieve an substantial amount of benefits by not only changing purchasing practices, but also by improving how they may manage their labor force, supplies, equipment and also their facilities; and the strategic view of a hospitals supply chain is critical for their success. The supply chain management must be high level focused, non-fragmented, and driven towards realizable and sustainable goals
(Mangione & Stark, 2004).
Hospitals are able to cut approximately 8 to 12 percent off their overall supply costs by working jointly with the physicians to be able to control the cost of physical, preference items and one way to start attacking physicians preference items are to: put supply related issues on the agenda at regular meetings of the physician committee. Some of the hospitals choose to have the stand alone...