It starts with an extreme focus on quality
Everything we touch at ASP Global has quality improvement in mind. By focusing on improving quality and securing clinical input at the beginning of the design process, we are able to then go direct to factories, cut out the middlemen, deliver meaningful savings, better quality and in turn reduce the risk for our clients.
Becker’s Hospital CFO recently invited ASP Global CEO Lorne Tritt to share his insights on top metrics for hospital medical supply global sourcing programs.
“As hospital purchasing executives and CFOs continue to try to squeeze costs out of the system while maintaining quality levels and clinical utility from their medical supply purchasing programs, many have turned to global sourcing to affect this.
When as much as 50% of the cost a hospital or IDN pays for [disposable medical supplies] can be attributed to the middlemen taking profit, the attractiveness of global sourcing programs is easy to understand. The implementation is not so easy.” – Lorne Tritt, CEO of ASP Global in Becker’s Hospital CFO.
Top metrics of successful Global Sourcing Programs
1. Overall savings – start with the bottom line
“Global sourcing facilitated by ASP Global saves an average of 27% on 33 SKUs currently in the program.” – Jim Connor, Vice President of Supply Chain Operations at Westchester Medical Center Health Network
2. SKU reduction & consolidation
On a 100 product program, eliminating 20 SKUs is a solid goal. Within Westchester Medical’s global sourcing program, the team sourced a new digital thermometer that reduced the number of SKUs and cut costs simultaneously.
“ASP Global generated a better product at half the price,” Connor says. “We save $70,000 per year on that product alone.”
3. Program expansion
If your global sourcing program is working well, it is worth expanding. One large east coast hospital (more than 2,500 registered beds), initiated a global sourcing program in 2013 with 20 products generating savings of 32% across the program. The program doubled in size in 2014 to 50 products and $1 million in savings on a $3 million spend. In 2015, the project reached $1.4 million in annual savings on a $4 million spend.
4. Fill rates
If your hospital’s receiving areas or warehouses are not capable of supporting large containers, enlist other existing suppliers, distributors or 3PLs to provide some support. Your global sourcing partner and program should be providing annual fill rates at 99% or better.
5. Improving the patient experience and HCAHPS scores
“At the price for a day in one of our beds, [patient amenity products] SHOULD be the kind of items one would expect to find at a Four Seasons Hotel,” Connor says. “We use our supply chain and procurement expertise along with our global sourcing partner’s capabilities to provide a higher quality experience for our patients.”
Read the entire article as written by ASP Global CEO Lorne Tritt at Becker’s Hospital CFO here.