Enjoy Big Gains By Involving Your Smaller Vendors In Your EDI Process
Despite the constant need for appropriate medical inventory, which costs money not only to purchase, but to install, store, maintain and train staff to use, hospitals and medical facilities are under incessant pressure to maximize what they have before purchasing anything else. They need to maintain the exact inventory needed for a medical emergency while controlling costs, a feat that seems counter-intuitive.
One way to accomplish this miracle is by participating in electronic ordering processes with suppliers. Doing so makes make ordering and delivery more efficient and streamlined. However, even the best laid plans can present obstacles What if a long-time supplier isn’t equipped with the technology needed to communicate with a hospital electronically? Are suppliers really losing business if they aren’t equipped to communicate electronically with their hospital/customers? Yes, they are.
Benefits for hospitals
The positives of all sides in the medical profession managing orders electronically are clear. For example, the most immediate benefit for hospitals is efficient control of their ordering and inventory processes. It is important to note hospitals can extend those positives beyond the ordering process by integrating their ERP systems with their EDI order processing, thereby eliminating delays and errors due to incorrect data entry. Such integration is standard practice in retail and other industries needing quick and accurate accounting linked to inventory and sales processes.
Not only does integration between orders and accounting reduce time and data entry errors, it extends the hospital’s view of its orders. By using software programs called dashboards, hospital inventory can be tracked from order to delivery, all through a single program. Dashboards can also create alerts to notify administrators when an order is delayed or otherwise isn’t being handled as expected. Such notifications provide advance warning for situations when a specific time-critical item is needed for a surgery scheduled for the next day, for example, so that remedial steps can be taken to get the product to the operating room on time.
For more routine orders, chain supply visibility can reduce or even eliminate the need for phone calls to suppliers inquiring about the status of orders. When both the hospital and supplier participate in EDI transactions, electronic updates are automatically transmitted between the trading partners to advise of the order’s status. Dashboards automatically announce when an order has not progressed to an expected stage in the supply chain so immediate action can be undertaken. Administrators can focus on problem orders while allowing the system to automatically track the majority of orders that are processing in a timely manner.
Why it’s difficult to being suppliers onboard
Most hospitals already utilize EDI in their ordering processes. However, an average of only 100 of the 1,800 to sometimes even 2,000 suppliers the typical hospital works participate in EDI. This discrepancy is usually due to the burdensome costs associated with a supplier implementing EDI. For suppliers that work with only a limited number of hospitals and medical facilities, the benefits of EDI may not outweigh its enormous costs.
The handful of vendors that do participate in the hospital’s EDI program are likely companies large enough to justify the investment in EDI technologies. But, in situations when the costs are simply too much for a small vendor to justify the investment, a transaction-based pricing model might make the most sense.
Hospitals can also decide to implement an alternative provider for use by their smaller disconnected suppliers without disrupting their established connections. EDI system providers such as DiCentral are able to deliver services to hospital suppliers billed by transaction volume rather than by the value of their entire business. In addition, these systems can connect to a hospital’s ERP system to provide the kind of supply chain visibility that pays off in reduced time spent on last-minute phone calls and missed deliveries.
Bringing the largest segment of a hospital’s trading partners into an automated electronic supply chain can reduce inefficiencies, streamline order processes, integrate payment and inventory systems and provide much-needed management controls. And, the right EDI service provider can handle the entire process from ERP integration to vendor set-up and training, leaving the hospital and its staff to concentrate on leveraging their newfound capabilities, reduced workload and streamlined processes.