I’m continually amazed by what I read.

September 11th, 2009

Article points to an area that requires more attention and more CEO’s and CFO’s need to get more involved.

I was reading an interesting article in the Money Section of the September 10th issue of USA TODAY titled Hospital CEO’s find ways to save by Del Jones. You have to be kidding me. The sub title was Managing staff time, inventory can cut costs. Does this mean that while times were good and profits were a plenty that this was not the right way to run a business?

One reference in the article went on to discuss how a hospital carried twenty varieties of rubber gloves of different colors and thicknesses and that now doctors would have to choose from just two types. The article also indicated that this would reduce costs on gloves by almost 52% because of a larger volume based on just two types. You have to be kidding me. This is just an example of poor negotiation and poor purchasing discipline. We are talking about basic collaboration and aggregation strategies that most large organizations should have in place already. Surprisingly many do not. This type of collaboration should be taking place between disparate departments by aggregating similar product purchases. The products do not even need to be the exact same products to drive deeper discounts or quality improvement.

There are any number of quality management systems, procurement systems and supply chain management systems available on the market today. Many are available as hosted on demand offerings that make these tools easily accessible for companies of all sizes.

It still amazes me that they are not in greater use.

As always, we look forward to and appreciate your comments.

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