2nd
June
2016

Addressing supply chain inefficiencies following mergers

When major companies merge, there are a lot of logistics to manage. From adjusting to new systems and processes to choosing which vendors are the most cost-efficient, supply chain managers have a lot to address. Quick fixes can cause serious issues that are costly and interrupt a hospital or other health care provider's services, so it's best to avoid these mistakes in the event of a merger:

Not using quantifiable measurements
Supply Chain Quarterly noted that when a merger occurs, people may be uncertain of their new positions. This can lead to trouble getting a consensus on particular data. It's important to make supply chain management decisions as transparent as possible so hospital management can understand why certain decisions have been made. It's also key to be clear on choices as this shows financial consequences of supply chain actions. To avoid unclear measurements, make sure to establish what information is necessary to establish a supply chain moving forward.

Compare delivery times, product prices, warrantees and shipping costs to get a clear picture of which vendors and providers are the best for the newly merged company. Ops Rules shared that it's necessary to take into account what your facility should always have on hand and which items should only be ordered when necessary. This prevents overspending and promotes effective use of storage space and funds. 

Immediately combining systems
While your company may now be merged with another, this does not mean every aspect of each health care provider should be linked right away. Hastily making decisions regarding which systems and processes to use can cause serious chaos, and may lead to ineffective patient treatment as well as a lower ROI. Take several weeks, or even months, to fully understand why each company uses particular supply chains and how they do so.

"Hastily-made decisions can cause supply chain chaos."

Then, address metrics that can show which is the better option. Only after some study should the newly formed entity opt for a particular route when it comes to supply chain management. The three-step process of integration, optimization and acceptance may seem like it takes unnecessary time, but in the long run both providers will benefit from the careful analysis and planning.

Addressing potential disruption
Possible interruptions are a huge factor in managing a health care supply chain. Natural disasters could impact shipping. Low supplies may affect the production of a product. Vendor closings or mergers may also have an effect on whether your recently united hospitals or providers can get what they need on time. Always take into account potential extra time for such disruptions when making changes to your supply chain. 

With careful planning a merger can benefit both companies in many ways. Proper supply chain management will make your newer, larger provider more efficient and cost-effective.

PartsSource is a leading provider of medical replacement parts solutions. Combining a suite of software-enabled services with industry best practices, PartsSource is empowering its customers to drive costs out of the healthcare delivery system while improving outcomes.