Healthcare's Cottage Supply Chain Needs a Makeover

Mike Alkire, for HealthLeaders Media , August 19, 2011

Instead, we should be learning from and implementing best practices that have been realized in other industries to drive supply chain improvements that can provide the best patient outcomes at the best cost.

Wal-Mart provides a good example of how to transform this cottage approach to supply chain.

In the early 1990s, manufacturers supplying deodorant to Wal-Mart sold their products in a paper box. Then Wal-Mart asked a simple question: Why do we need the box? The box cost money, made the shipments heavier and destroyed millions of trees. And it didn't make customers smell better. So Wal-Mart told suppliers to lose the box. And they did, not just for Wal-Mart, but for almost all their customers.

But these types of innovations can only come with scale. Wal-Mart makes up a significant portion of most consumer products manufacturers' business, and when they request that a standard or a process change be implemented, it happens. But there is no Wal-Mart in healthcare. This has to change.

We need to unite individual providers around common, shared goals, such as the consistent need for better, more clinically effective products. And we need to use our scale to get those products at the best price using the most effective sourcing strategies.

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