Month 1: Step 1 – Where’s the money going?
Procurement. What does it mean to you? Complex? Dull? Daunting? Way down the priority list? It’s the poor relation in most industries and especially in healthcare. However, the only way you will have got by without it, is luck. Procurement isn’t just about buying. It’s more than that. It’s about thinking strategically, forming relationships, reducing risk, maximising return and providing a supportive arm to every department from the clinical to the administrative.
Over the coming months, I’m going to show you techniques that will help you understand just how simple procurement really is. We’re going to be looking at the 7 steps you need to take to reduce costs, tricks that salesmen use and how you can reduce risk within your supply base. Following these steps, you will be able to deliver your surgery up to a 50% cost saving. The reason I can make such a claim is that is exactly what I’m doing right now for my customers.
The very first step you need to take is known as “information gathering”. Find out where your money is being spent. Use your profit & loss account and capture product line detail from recent invoices. Once this is completed, rate each category in terms of complexity, the expected time period and amount of savings that can be delivered. You want to focus you efforts on the quick and juicy rewards, not get lost up blind alleys. When you’re confident you know exactly what you’re buying and what you want to review, you’re ready to move onto step 2, designing your “strategy”, which we will be taking a look at next week.
