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Cost saving through efficient Supply Chain
Healthcare
Healthcare is one of the largest and fastest growing sectors in the world today, despite the current bleak economic scenario, globally. Labour is usually the single largest expense in a healthcare organization, reason being that staffing and satisfaction of patients is directly proportional, and the management of the healthcare companies are well aware of this fact. The attention therefore focuses on the next major expense in this industry – the supply or procurement costs.
The Cost
The very nature of a healthcare organization drives complex supply needs. Improvements in technology require thousands of items to be procured, which in turn also results in the organization making hundreds of ‘one off’ purchases over time. Meanwhile, due to a lack of proper supply chain methodologies and practices, the management lacks a top-level view of the total supply spending or ways to minimize the supply side costs. A less-than-efficient supply chain has consequences which are far reaching and almost always increase cost of operations. From paying the wrong price for contracted products to the extreme unintended but serious consequences such as surgeries being disrupted, which can happen when proper supplies are not on hand, the consequences can be many. Lack of accurate information in the supply chain, such as incorrect or higher prices for a contracted product has spiralling effect, from the patient being over-billed right down to the insurer having to pay higher reimbursements to cover the patient’s costs. The lack of use of modern information technology also results in enormous paperwork, task based manual processes that many a time lead to incorrect order placement, sometimes resulting in inventory worth millions of dollars. With these facts coming to light, hospital executives and directors of materials management today consider supply chain as a strategic and business-critical function.
Streamlining Supply Chain
Companies across industries have adopted supply chain management initiatives to manage the supply and procurement side costs and inventory, and transform the way they deal with suppliers, customers and partners. The implementation and leverage of latest technologies have resulted in healthcare organizations turning data into information which can be acted upon, and in the long run, enabling them to drive cost savings that can be directed towards better patient care, in addition to enabling the management take informed business decisions.
A number of tried and tested software packages like the Healthcare Information Systems (HIS) and Enterprise Resource Planning (ERP) software’s are available for companies in the healthcare segment to implement and thereby streamline their supply chain, making use of the silos of data that gets generated into useful information for the top management and materials managers to use in analyzing trends and making forecasts that are more accurate. It also allows analysis of the supply chain and logistics processes, gives room for tweaking them for improvement and further evolution, thus cutting costs and lead times.
Experts suggest that process analysis and measurements lead to unveiling of pain points in the supply chain which can then be addressed properly. It allows organizations to make a combined use of technology, information and services resulting in, many a time, redeployment of a sizeable portion of the workforce that was hitherto involved in labour intensive tasks, in to more suitable positions which ensured better skill utilization.
Conclusion
Use of technology is aimed at the objective of auto stock replenishment and an intelligent supply chain management system. From connecting and automating different departments in the healthcare organization to providing the senior management information in the form of intelligent dashboards for proper decision making, and demand forecasting, implementing supply chain management initiatives and strategies go a long way in simplifying the complex nature of healthcare procurements and realizing cost benefits on a long term basis.
Telecom
Telecom Industry in India is growing at a fast pace, with approximately 9 million mobile connections per month, India is the second largest mobile market globally. Logistics operations in Telecom Industry mainly pertains to infrastructure – network development, besides inbound logistics, warehouse management and freight management including unloading / erection of material at sites, Customs clearance, warehousing, order sorting and delivery to project site, real-time shipment tracking, special deliveries using specialized labour into rural and un-motorable sites, etc.
Over the years the Telecom Industry has seen a shift from a supply-driven marketplace to a demand-driven model which has significantly impacted not only how carriers market and sell their products, but how they purchase their own network equipment. The only way telecom majors have been able to sustain and grow in the recent recession has been by practicing effective supply chain management, streamlining purchasing processes and reducing time-to-market. Leading telecom service providers have also taken advantage of a key shift in the supply chain infrastructure - large equipment vendors outsourcing manufacturing operations.
Besides telecom infrastructure and network related logistics management, telecom majors have also looked at logistics providers to manage logistics activities related to sales promotion and advertising materials, SIM Cards distribution management etc.
Value Added Services are being contemplated by a number of leading companies as the new supply chain using the mobile telephone to market their products. The value-added services market in India is expected to grow to about US$ 5.6 billion by 2011, and data services will be the major factor behind the growth. VAS is not merely cost effective, but also has a high profit potential. With millions of subscribers getting added every month and mobile phones getting cheaper, this is a supply chain that has many industry experts and marketers excited.
Telecom equipment manufacturing is also set to boom in India. With companies like LG and Nokia planning expansion to their manufacturing bases and targeting rural markets, the telecom market looks riding a high-tide.
Experts opine that Logistics and Supply Chain management will be a top priority for organizations in the telecom domain, with the current boom in the industry. Supply chain management will enable telecom equipment purchasers to reduce procurement process inefficiencies, reduce their time-to-market pressures, improve their purchasing processes, and easily access current product specifications and information. Suppliers will be able to post updated product data on bulletin boards, cost-effectively access global markets, and streamline their sales, marketing, and distribution channel operations.
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