New Tools E-Store
 
Login
 
Home
 
 Contact Us
 
Visit our new video
spacer
Home
spacer
About NML
spacer
Services
spacer
NML Toolkit
spacer
Senior Team
spacer
Client List
spacer
News
  Monthly Newsletters
  RUMC Press Release
  HSS Press Release
  Avera Press Release
  TCS Press Release
  IH Press Release
  PAMC Press Release
  UHHS Press Release
  MHM Article
  Repertoire Article
spacer
Contact Us
spacer
spacer

new logo with tag on white
National Medical Logistics Newsletter
 

January 2010

In This Issue
Understanding Leverage
Reform Uncertainty and the Supply Chain
Quick Links
Visit us at
 
www.natmedlog.com  
 
See prior newsletters at

Dear Friends,

 

Happy New Year and welcome to 2010!  As we launch a new decade, we thought it appropriate to offer a few thoughts about perspective.  As you build your strategic plans for the future, consider the concept of leveraging assets, then build into your company's objectives those initiatives that will achieve it.

 

Additionally, it is hard to believe, but it has been a year since we offered any thoughts on healthcare reform.  With the process moving into a new phase, we offer a few reflections about history repeating itself.  Enjoy.   

 

Sincerely,

 


National Medical Logistics
Do You Understand the Concept of Leverage? new logo with tag on white
 As we begin a new year and start with a fresh set of goals, it is a great time to think about some of the key economic cost and value drivers that might be used to help attain those goals.  One of the most important drivers and one that you should look to incorporate into your operations is that of leverage.
 

For most businesses, the key to supply chain efficiency and maximizing economic return includes the concept of leverage.  The more volume that can be spread over a set amount of capital and expenses the greater the productivity and associated cost reductions.   Therefore continually increasing the amount of products and services purchased through your supply chain will continue to provide higher levels of efficiency and value. This runs the gambit from price point improvement opportunities to labor and transportation savings. 

 

In general, the larger the scope of products and services, the greater the opportunity to successfully translate them into opportunities.  Volume by itself however, does not ensure success.  It just provides the environment and atmosphere to increase negotiating power and the associated likelihood for generating incremental and sometimes substantial savings.  
 
In some areas, smaller supply chain organizations are joining together to form cooperatives as an approach to gain volumes and create leverage.  In some cases, newly formed entities [LLCs] comprised of independent supply chain organizations are consolidating demand and establishing a single, larger distribution facility, that allows each organization to benefit from the leverage that the model achieves. 
 
This collaborative approach is gaining popularity within the provider community as many explore the benefits derived from self-distribution supply chain models that provide the same opportunities that were previously available only to the bigger healthcare systems.Achieving savings opportunities can be a great motivator for creating and taking advantage of leverage.  One of those is the self distribution supply chain model.  
 
Certain considerations however to deploying this strategy should be given to potential restrictions or hard constraints including physical challenges such as space limitations due to growth, or a desire to pursue enhanced supply chain control.  These non-financial considerations can be a big a motivation as they sometimes result in a cost avoidance situation.  Many providers consider the impact this model has from both a logistical and economical perspective including soft and hard benefits. To read more click here.
  
Healthcare Reform Reflectionsnew logo with tag on white 
    

About this time last year we offered a few thoughts on the healthcare reform initiative. We thought it might be interesting to revisit some of those points.

  

One of the concepts that we discussed a year ago was the notion that to succeed, the process needs to be kept simple.  Some in Washington believe that a large part of the reason the Clinton healthcare reform effort failed was because the bill was 1,300 pages.  At 2,000 and counting, today's bill is a long way from simple.

 

A year ago we also reflected on the belief by some in Washington that it is important to capitalize on the early wave of public sentiment and emotion inherent in these types of efforts.  To succeed, patrons needed to complete the process before the campaign lost its momentum and energy.  

 

Public opinion polls would indicate that much of the public is increasingly confused, disenchanted or even fearful concerning the present healthcare reform.   While there is still much emotion left in this topic, the tide appears to be turning negative.  Even supporters of President Obama's present day efforts are nervously reading the political tea leaves from NJ, VA and now MA.

 

It is hard to know where any of this will take us or when.  One thing that is clear to us, however, is that change doesn't have to be bad.  It should, however, be incremental.  Most American's are happy with their healthcare, consider it world class and, while acknowledging its problems, do not want to wreck havoc with massive change.  A smaller, slower-as-you-go reform may be the norm for years to come, regardless of political persuasion.   Whether it is the levels of coverage, numbers of new participants brought into the program or just the psyche of the American public with regard to how they acquire healthcare, the system will continue to experience changes where consensus exists.   

 

In keeping with the first concept mentioned above, we offer a simple piece of advice.  Stay flexible, and keep your operations as simple as possible.  To be flexible you, need data.  If you don't have much now, find ways to capture it.  Build in ways to calibrate your supply chain up or down.  Increase communication throughout your network and establish benchmarks.  And as always, call NML if we can help.         

    Copyright ©2009 National Medical Logistics, LLC. All Rights Reserved.