Optimizing Hospital Procurement Costs through SKU Standardization: Strategies and Best Practices

Written By Lauren Davis, BS, CPT

Summary

  • Hospitals can effectively control procurement costs by standardizing on specific SKUs.
  • The process involves analyzing usage patterns, conducting value analysis, and collaborating with stakeholders.
  • Standardization can lead to cost savings, streamlined operations, and improved patient care outcomes.

Introduction

Hospital supply and equipment management play a crucial role in the overall operations of healthcare facilities. With the increasing focus on cost containment and efficiency, hospitals are constantly seeking ways to optimize their procurement processes. One effective strategy to control procurement costs is by standardizing on specific SKUs (Stock Keeping Units). In this article, we will discuss how hospitals can determine which SKUs to standardize on in order to lower costs while maintaining quality care.

Understanding the Importance of SKU Standardization

Standardizing on specific SKUs involves selecting a single type or brand of a particular product to be used throughout the hospital. This approach helps streamline operations, reduce inventory costs, and improve overall efficiency. By consolidating purchasing around a smaller number of SKUs, hospitals can negotiate better pricing with suppliers, reduce the risk of stockouts, and simplify the ordering process.

Benefits of SKU Standardization

  1. Cost Savings: By purchasing larger quantities of standardized products, hospitals can benefit from volume discounts and lower unit costs.
  2. Streamlined Operations: Standardizing on specific SKUs simplifies inventory management, reduces confusion, and minimizes the risk of human error.
  3. Improved Patient Care: Having consistent products across departments ensures continuity of care and reduces the likelihood of medical errors.

Steps to Determine Which SKUs to Standardize

While SKU standardization offers numerous benefits, hospitals must carefully evaluate their product offerings to determine which items to standardize on. Here are some steps that hospitals can take to effectively determine which SKUs to standardize:

1. Analyze Usage Patterns

One of the first steps in SKU standardization is to analyze usage patterns for different products across departments. Hospitals should track product usage, identify high-volume items, and categorize products based on their criticality to patient care. Understanding usage patterns can help hospitals prioritize which SKUs to standardize on.

2. Conduct Value Analysis

Value analysis involves evaluating the quality, cost, and performance of a product to determine its overall value to the organization. Hospitals should assess the clinical effectiveness, safety, and reliability of different products before standardizing on a specific SKU. Collaborating with clinicians, Supply Chain professionals, and relevant stakeholders can help identify the most cost-effective and high-quality products.

3. Collaborate with Stakeholders

Effective SKU standardization requires collaboration between various stakeholders within the hospital, including clinicians, Supply Chain managers, and finance professionals. By involving key stakeholders in the decision-making process, hospitals can gain buy-in, address concerns, and ensure that the selected SKUs meet the needs of both clinical staff and patients.

Best Practices for SKU Standardization

Implementing SKU standardization requires careful planning and ongoing monitoring to ensure its success. Here are some best practices for hospitals looking to standardize their SKUs:

1. Establish Clear Policies and Procedures

Hospitals should develop clear policies and procedures for SKU standardization, outlining guidelines for selecting, implementing, and monitoring standardized products. These policies should be communicated to all relevant staff members to ensure compliance.

2. Monitor Supply Chain Performance

Regularly monitoring Supply Chain performance, including inventory levels, order accuracy, and supplier performance, is essential for successful SKU standardization. Hospitals should use key performance indicators (KPIs) to track the impact of standardized products on cost savings and operational efficiency.

3. Continuously Evaluate and Adjust

SKU standardization is not a one-time event but an ongoing process that requires continuous evaluation and adjustment. Hospitals should regularly review their product offerings, solicit feedback from clinicians and staff, and make necessary changes to optimize their SKU portfolio.

Conclusion

SKU standardization is a valuable strategy for hospitals seeking to control procurement costs, improve operational efficiency, and enhance patient care outcomes. By analyzing usage patterns, conducting value analysis, and collaborating with stakeholders, hospitals can effectively determine which SKUs to standardize on. Implementing clear policies, monitoring Supply Chain performance, and continuously evaluating and adjusting SKU offerings are key to the success of SKU standardization initiatives. With careful planning and ongoing monitoring, hospitals can realize significant cost savings and operational benefits through SKU standardization.

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Lauren Davis, BS, CPT

Lauren Davis is a certified phlebotomist with a Bachelor of Science in Public Health from the University of Miami. With 5 years of hands-on experience in both hospital and mobile phlebotomy settings, Lauren has developed a passion for ensuring the safety and comfort of patients during blood draws. She has extensive experience in pediatric, geriatric, and inpatient phlebotomy, and is committed to advancing the practices of blood collection to improve both accuracy and patient satisfaction.

Lauren enjoys writing about the latest phlebotomy techniques, patient communication, and the importance of adhering to best practices in laboratory safety. She is also an advocate for continuing education in the field and frequently conducts workshops to help other phlebotomists stay updated with industry standards.

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