Business problem:
- A large Healthcare group with more than 30 hospitals with over 10,000 beds has a decentralized supply chain with cost inefficiency. Same type of material procured for different prices by different units
- High inventory levels resulting in frequent material expiry and inventory write off.
- Inadequate controls resulting in pilferage and excess use by end users.
- High procurement cycle time and more than 30% of purchase being emergency purchases.
Solution Approach:
- Analyze the current operations against key impacting factors for operational excellence
- Extensive data mining across the group and applying advanced analytics to develop predictive models.
- Setting up centralized protocols and policies to streamline supply chain process, building a shared service center to service all hospitals in the group.
- Inventory optimization, purchase process standardization, common guideline price, vendor list standardization, predictive models for demand prediction.
Key Outcome and benefits:
- Procurement cost reduction of 7% across the group, with annualized saving of $ 2 million.
- Enhanced controls and accurate inventory valuation.
- Improved supply chain reliability and compliance to JCI standards.
- Reduction in emergency purchase by 85%
