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| National Medical Logistics Newsletter |
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Dear Friends,
If you are like a lot of healthcare systems, fall is high planning/budget season. A natural part of that process is to review the year that has gone before and think about ways to improve things for the coming planning period. Intellectually, we all know that we should have a complete and comprehensive set of written business policies (and accompanying procedures) for our operations. Our experience at NML is that while most people have some, few have what we would call a complete set of policies covering a wide spectrum of their supply chain focused enterprise. Written policies are valuable for a number of reasons: - They make a great training and orientation tool for new hires
- They serve as good documentation for restructurings, mergers, acquisitions, expansions or any other period of great change.
- They are highly helpful in providing controls and achieving standardization and consistency.
- They provide a clear and concise method of consistently managing customer expectations.
When working with clients we are sometimes asked what policies should organizations develop and keep in writing? This question is even more important in situations where the organization is launching a new business or re-inventing themselves to improve their cost position. Over the years we have developed a comprehensive list of the top 29 policies that we encourage clients to maintain. Those 29 fall under the following categories: Inventory, Purchasing, Vendors & Customers & Authorities Over the course of the next several months we will share some thoughts on our list, focusing on a new category each month. This month, we begin with the topic of Authorities. To learn more, see the article below. Sincerely, National Medical Logistics |
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Authority
One classic definition of management is accomplishing things through others. A natural extension of this concept is delegation. When you allocate the making of decisions, however, you increase risk to the enterprise. One way to mitigate this risk is to clearly define the areas where others will be allowed to act on behalf of the organization, how they may do so and at what level(s).
As you think about establishing authority for management or staff, we encourage you to commit to writing policies on at least the following:
- PURCHASING AUTHORIZATION POLICY: This policy will identify the purchasing authorization requirements for buying goods or services through the ISC model. It will detail the authority level by dollar amount and commodity/service. In some cases, the ISC operation staff may use this policy to address any potential vendor sales effort that targets clinicians or end user departments. This policy may also address products and or services that are normally purchased through ISC that are being diverted to other sources and any associated penalties [if any].
- EMERGENCY ORDER PROCESSING: This policy identifies the authority level needed to initiate emergency orders. It addresses orders containing stocked items and non-stocked items. In some cases, emergency orders may be initiated internally in a proactive manner; this policy will include the criteria, in which this may occur, the cost of service and who pays for associated expenses.
- WORK SCHEDULING/OVERTIME POLICY: This policy will address work schedules and overtime pay, when it will be acceptable and at what rate, record keeping requirements, etc. This may already be in existence. It may include a communication protocol of ISC's hours of operation and who must be notified.
- ITEM LOW UNIT OF MEASURE POLICY: This policy identifies how the lowest unit of measure for distribution out of ISC will be determined [vendor order requirements, packaging, space limitations, etc]. It will identify who is involved in the decision and the criteria used [this may include productivity, cost analysis, etc.]. In some cases, the policy will identify ongoing review schedules and authority levels needed to modify or establish these units of measure.
- OPERATING EXPENSE APPROVAL POLICY: This policy will address who is authorized to incur operational expenses associated with ISC and at what dollar levels. This will also cover special operational situations related to new or one-time customer services.
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