Categories with a reputation for being “low preference” or “commodities” can get put on auto-pilot inside busy supply chain organizations. Too many supply chain leaders incorrectly believe that value improvement opportunities are limited in these categories – that the “juice isn’t worth the squeeze”. They assign staff time and focus elsewhere.
That improvement opportunity calculation is outdated.
Leading IDNs are tightening up management of “low-preference” and “commodity” supplies within their med/surg spend, and improving value with both quality improvements and cost improvements.
The first big lesson these forward-thinking leaders learned? That frontline clinicians actually have strong and principled preferences about many “commodity” items.
Let’s look at tourniquets as an example. Tourniquets are a high-volume disposable product, used in many locations throughout the health system.
Are they a low-preference item? Many supply chain folks that we know might say yes. But the answer is NO if you’re a daily end-user of this product.
Quality Improvements Within Reach
ASP Global asked clinicians and allied health professionals exactly what product attributes would make tourniquets work better for them. Clinicians asked for specific features, tied to their workflow and clinical needs – including some product features that are tied to critical safety requirements, like bright-colored tourniquets for use in the ED to avoid accidentally leaving one in place for too long.
For this “commodity” item, we defined preferences in color, length, stretch, width, texture, packaging, and material.
Quality improvement is achieved in this category by understanding and serving clinician preferences for these items.
Cost Improvements Beat Expectations
Breakthrough cost improvement is achievable in “low-preference” or “commodity” categories.
Leading IDNs are applying two cost management strategies in parallel. They are reaching new value thresholds by combining commitment with direct sourcing.
Committing spend to unlock new savings is a traditional strategy for healthcare sourcing. What’s new today is the emergence of comprehensive, programmatic management of commodity spend through GPOs and other purchasing groups.
The Vizient Achieve Committed program is one such program.
ASP Global was selected to support Vizient members through their Achieve Committed Program. As one of the first suppliers selected, we got a chance to see how the program works to drive value for members. ASP Global supplies a full range of NOVAPLUS brand tourniquet products for Vizient members. Two elements of this program stand out:
- ASP Global can offer breakthrough value for Vizient members because we’re direct-sourcing the items to their specifications. Vizient members get the benefit of our low-cost direct-sourcing model.
- Vizient members can commit to the NOVAPLUS brand with confidence that we meet their clinicians’ quality and product feature requirements.
The commodities program approach is working for Vizient members. The portfolio of contracts in Vizient’s Achieve Committed Program is growing steadily. The portfolio includes more than 80 contracts and 10,600 items. We’re proud to have served several hundred Vizient facilities to date with the NOVAPLUS tourniquet products, and we look forward to growing together with the Achieve Committed program.
Is your GPO or purchasing organization considering implementing a commodities program? Is your IDN planning to take a close look at commodities spend this year? Is a high-volume category up for recontracting? We’re always happy to share what we know and put you in touch with our direct-sourcing experts and our value analysis team.
For more information or to request a product sample of the NOVAPLUS tourniquets, please email William Fallon at email@example.com