Supply chain transformation has been the buzz phrase in the Healthcare world for some time now, but what the heck is it? The answer to this depends on who you are talking to.
The traditional supply chain involved the movement of goods from supplier to demander, so from manufacturer to retailer, or manufacturer to distributor, or distributor to retailer and so on. These physical supply chain activities are governed by the whole procure-to-pay transactions sets, paper or electronic, of purchase order, invoice and final payment. Certain experts in Healthcare have proposed to extend this supply chain definition to include the patient as the final demander and so the supply chain extends to the hospital room and patients Electronic Health Record (EHR/EMR).
This theoretical extension to the patient and patient record has taken the attention of many, when in fact the traditional supply chain in healthcare today for the most part lies stuck in the 1980’s. This needs to be fixed before the extension can be addressed. In Canada less than 30% of purchase orders are delivered electronically resulting in needless paper processing that is adding billions of dollars to healthcare costs. These costs are hidden in the back office and result in increased product costs from manufacturers.
In the modern retail world 100% of issued purchase orders are delivered electronically and thus invoicing is returned in the same format. Then an auto-match-pay process eliminates all the paper processing saving that industry many 10’s of billions of dollars annually.
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