From Conception to Consumption: Applying Lean to Supply Chain Management
In today's economy, companies are increasingly challenging their supply chains on various dimensions, including flexibility, cost reductions, risk management, technological innovation, and customer service levels. Similar to the supply chains in manufacturing and other industries, the healthcare delivery system has become so large and complex that it is now imperative to find a way to achieve marked improvements with sustainable results.
With supply chain management being the second highest expense after labor, hospitals and health systems are looking for a better way to save money and increase efficiency, while still maintaining high quality standards and improving the patient experience.
The Simpler Supply Chain and Logistics Practice helps hospitals and health systems respond quickly to overall strategic direction while meeting new demands for process performance, increased productivity, and enhanced value. We help create a lasting competitive advantage at every stage of the supply chain — from product selection and sourcing to logistics and distribution.
The Simpler Five Phase Supply Chain Transformation Process
Although traditional project-by-project methods of process improvement remain popular, as much as 75 percent of savings and productivity can be lost within 18 months without a continuous improvement discipline. Simpler's healthcare team employs Lean management principles, uncovering opportunities leading to 8–12 percent reduction in supply chain costs at our typical healthcare provider client. The Supply Chain Transformation Process includes several phases: Discovery, Assessment, Solution Design, Implementation, and Continuous Improvement.
Depending on the present state of your organization's supply chain, continuous improvement can include:
- Establishing and/or improving standardization of sourcing, ordering, receiving, and distribution of supplies to end-user employees.
- Aligning physician preferences to the supply chain process. Getting physicians involved in designing the supply chain will lead to better patient outcomes.
- Reducing the amount of suppliers and number of goods to the minimum, eliminating multiple choices where possible.
- Portfolio management of equipment, and designing protocols and standardization around future decisions.
- Ongoing tactical negotiation with suppliers on quantity and other leverage points to further reduce costs.
- Aligning supply chain to care delivery and eliminating the equipment, inventory, and processes that do not fit the outcomes-based model.
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