Tracking Your ‘Inbound’
|BY KURT KUEHN|
|Tracking your 'inbound'|
Supply chain visibility yields savings, says one of the nation's leading shipping companies
|For years, the nursing home field has faced ongoing pressures to simultaneously improve care and reduce costs. Operating nursing homes is a tough business, with slim margins and top-line revenues largely controlled by Medicare and Medicaid. Both patient care and profit-ability depend on efficiency.|
Over the past decade, as costs and administrative burdens have increased, nursing homes have taken many steps to reduce expenses. However, while many facilities have made great strides in cost control, the obvious targets for savings may already have been exploited. The focus is now turning to less obvious but potentially more lucrative efficiency opportunities, such as those buried in the organization's supply chain.
Supplies as a Cost Item
Other industries-retailers, automotive suppliers, and consumer products manufacturers, for example-have already streamlined their inbound shipping and inventory management costs. It's time for healthcare to do the same. Nursing homes should reap the rewards of a more efficient supply chain.
A Clear View Into the Pipeline
When organizations buy goods-from cleaning supplies to paper products-they're typically buying under a purchasing agreement with negotiated prices. In a significant number of these agreements, shipping and handling charges are bundled with the cost of goods, making it difficult for the organization to see what it's actually paying for the goods versus shipping charges. Many organizations are now asking suppliers to break out these charges, and the trend seems to be shifting in the "unbundled" direction. Many more procurement agreements include line-item charges for shipping and handling.
This makes it easy to see exactly what is being paid for inbound shipments-a necessary first step in analyzing and managing these costs. Armed with concrete knowledge about inbound shipping dollar volume, the organization can tackle the issue head on.
Technology Provides Visibility Tools
What are "visibility tools"? An example: At UPS, we offer a free Web-based tool called Quantum View, which tracks the purchase order number to deliver a complete picture of shipping activity. Via Quantum View, an organization can access, download, and query shipping status information, and see when a package is processed, when it is in transit, when it will arrive, or why delivery might be interrupted.
Once the package is delivered to the facility's receiving area, another UPS technology called Trackpad integrates with an organization's internal system to process receipt of inbound shipments faster and more efficiently. When the delivery is received, package data are automatically transferred from the driver's electronic clipboard into the Trackpad software. An optional handheld unit allows receiving and delivery personnel to capture and store proof of delivery information as individual packages are delivered inside the facility. Both Quantum View and Trackpad can also be customized to trigger e-mails alerting users that a specific pack-age has arrived.
Using pipeline visibility technology such as this, all of the captured information can be used proactively to help organizations make informed business decisions. Benefits include:
Better visibility is the way of the future in healthcare, and the technology for it is growing steadily. Radio frequency ID technology is already being used in some large institutions for supply tracking and inventory control. Advanced systems are even capable of detecting low supply levels and automatically triggering a reorder.
Defining Your Plan
1. Know your costs. Study your inbound transportation costs and figure out exactly what you're spending. What can you control? What can you manage under an inbound shipping contract appropriately "visible"? The potential savings may surprise you.
With the increasing intensity of services, reimbursement uncertainties, and unceasing regulatory challenges, nursing homes know that finding new approaches to cost savings is imperative. As it turns out, the supply chain is full of opportunities for savings. Clear visibility into the supply chain and specifically managing its costs will yield rich rewards.
Kurt Kuehn is Senior Vice-President, Worldwide Sales & Marketing, UPS. For further information, visit www.ups.com. To send your comments to the author and editors, e-mail email@example.com.