of the healthcare industry. If this is done, many of the inventories, warehousing, distribution, and billing problemsfacing manufacturers go away. One call to a CLSC delivers all the materials needed for existing orders. A CLSC canconsolidate deliveries, while improving receiving, restocking, and service to the hospital. Space previously used forinventory becomes flexible space for growth and revenue generation, while visibility across the manufacturingenterprise is greatly improved through a centralised inventory/warehouse/logistics provider. At the other end ofthe medical supply chain, hospitals also financially benefit from a centralised inventory centre. Supply chainmanagement, inventory, and procurement can account for up to 35% of a hospital’s operating budget, accordingto Healthcare Purchasing News. Unofficial VMI can account for up to 50% of total inventories, creating distribution,billing, and product lifecycle headaches for both manufacturers and hospitals.Hospital supply chains spend approximately $8 billion each year on inventory management and order managementout of an estimated $11.5 billion in total supply chain costs. In this context, even small percentage improvementsto supply chain efficiencies quickly add up! Recent studies show that – just in the past 2 years – hospitals that moveto a Consigned Inventory Management System can expect to reduce supply costs by up to 3.5% within the first 4years of operation, which equates to more than 1% of total hospital operating expenses.Accessed from -HealthcareKnowledgeBase6-07Final.pdf.
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