“We make working with us as easy as having a factory down the street.” – Bill Fallon
Why can’t I go directly to the factory myself?
Direct sourcing straight from the factory is the superior option for health systems, as it gives you greater control over product quality, cost and design while driving out the wasted cost associated with distributor markups. This being said, it’s not surprising that many health systems are making the transition to going direct to the factory in order to take advantage of these benefits.
However, having a partner with direct to factory experience reduces unexpected risks for the health system in a number of ways. Having people on the ground local to the manufacturer and experience doing business in many countries can streamline the process, keeping costs low. Many health systems simply don’t have the administrative infrastructure to support in-house direct to factory sourcing. You have to have an experienced logistics team, a Quality Assurance team, and carry the liability insurance to back it up. Each aspect of the relationship is a key part of manufacturing directly with the factory.
Challenges to working directly with the factory
Manufacturing is not the skill set of a hospital, and properly executing a strategy that includes working directly with the factory requires interaction with manufacturers worldwide while managing logistics and quality assurance. Established regional manufacturing connections are needed to acquire products that meet a health system’s specific needs while still maintaining cost efficiency.
In-house direct sourcing capabilities also introduce a huge risk in terms of liability and cost. Having new products manufactured gives health systems ‘product ownership’, making them liable for everything from quality assurance to insurance. There are tremendous administrative and cost demands associated with being a ‘product owner’. Tight cost margins can force health systems to make the decision between staff positions and product sourcing.
Advantages of partnering with experts like ASP Global
Going direct to the factory with a partnership model offers a single point of connection to a network of qualified manufacturers, customs and shipping support, and expertise in quality assurance. The right partner is able to build on health systems’ existing strengths and current distribution relationship while still introducing new, diverse sources for products and reduce costs. Reducing costs saves FTEs.
ASP Global’s program helps health systems unlock new savings by offering a low-risk way to source products directly from the manufacturer. We have established relationships and direct sourcing expertise to minimize risk for your health system and provide end-to-end services. Our vast experience in dealing with duties, customs, quality assurance, and product liability allows us to offer advice on opportunity identification, product design inputs, and product conversion.
By choosing ASP Global, you can gain access to higher quality products with lower costs for your health system without the risk of undertaking design and manufacturing alone. ASP can be the ‘factory down the street’ and provide the resources needed to reap the benefits of direct sourcing. Contact us to learn more!
