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Top-performing consolidated service center (CSC) adopters operate with up to 65% less supply chain expense. But a CSC is not a one-size-fits-all approach or a magic box where a health system builds a warehouse, fills it with supplies and flips a switch to self-distribution. It requires thorough planning to achieve ROI.
A health system that takes the leap without considering the challenges risks overspending on a CSC model that delivers little value.
Here are 3 of the most common healthcare supply chain management challenges to consider when implementing a CSC to determine if the approach is right for your organization in its current state.
Take a step back and look at the broader strategy of your organization to determine whether a CSC model aligns with future goals. It doesn’t make sense to design a CSC for a five-hospital system when leadership is planning to grow the network by another 10 hospitals in the next few years. Therefore, involve executive leaders who will know what is coming down the road in your CSC planning.
Alternatively, if the push for a CSC is coming from the C-suite, they must align their efforts with supply chain leadership to determine whether this model is feasible — or even desired. Because whoever holds the IDN’s supply chain reins will be leading the CSC implementation — this individual will need to be a capable and enthusiastic supporter. Their team will also need the skills and knowledge to run a CSC.
Supply chain touches — and is touched by — many different stakeholders in a health system who will want a say in the strategy. So be sure to assemble a multidisciplinary team of those who will play a key role in making the CSC a reality, as well as those who would be impacted by the self-distribution model: clinicians, finance, IT, etc.
Further, engage external experts in self-distribution who have successfully planned and executed on CSC strategies for healthcare organizations like your own. They can guide you through the process of determining whether it makes sense and what steps you need to take to tackle the most common healthcare supply chain management challenges.
When considering a CSC, determine whether you have the proper resources and financial capabilities to see it through from planning to execution and beyond. Consider all the various elements that are essential for self-distribution and what resources you will need to commit to each key area: infrastructure, transportation, people, processes, etc.
A top consideration is the technology required to manage inventory from receipt at the CSC through to use in clinical care. While 44% of U.S. healthcare providers see a strong need for enabling technologies within their supply chains, few have implemented such technologies on a wide scale.
If your IDN currently relies on 20 different IT platforms for inventory management, including product data capture at the point of use (POU), is it even possible to integrate these systems with the CSC? And would you want to? Building interfaces to tie everything together and then maintaining multiple applications is costly and time-consuming. Furthermore, it makes it extremely complex to integrate data for supply chain performance analytics and demand planning.
Eliminate the costs and complexity by standardizing on a single supply chain management (SCM) platform that seamlessly integrates with your electronic health record (EHR) and enterprise resource planning (ERP) systems. Overcome common healthcare supply chain management challenges by selecting a holistic SCM that covers the full scope of supplies and tracks their movement from the time they arrive at your CSC to the time they are consumed at the patient’s bedside.
When considering the challenges of establishing a CSC, don’t overlook your organization’s culture and the need for change management. For a supply chain team that historically managed supplies in-house using largely manual processes, a shift to a CSC with automated processes will undoubtedly make their jobs easier, but staff members who are used to the “old ways” might initially resist change.
Clinicians who are accustomed to accessing supply inventory when they need it will likely have concerns about items being housed off-site, particularly if the CSC is located miles away or even in a different state. This is especially true if clinicians are untrusting of the supply chain to provide items when they need them. Engage in discussions with clinical leaders on how the shift to a CSC model will improve supply visibility and availability so they can help alleviate fears.
Develop a checklist for your organization to analyze and establish which of these 3 most common healthcare supply chain management challenges to consider before implementing a CSC. And don’t forget to engage your distribution partners in your CSC strategy and planning. That way, they will know what change is coming and how to support you best.