There was a lack of standardized lab product distribution amongst CTCA hospitals resulting in a lack of price parity and lack of access to the highest level of contract discounting.
Move from individual vendors and individually negotiated pricing to a single lab distribution vendor with aggregate Integrated Delivery Network (IDN) pricing for CTCA hospitals within First Quarter FY2011.
- Financial cost reduction of $51k for CTCA hospitals
- Cost reduction represented 21% of CTCA lab spend
- Improved Stakeholder satisfaction by elimination of non-value manual processes
- Transparency for lab supply procurement
- Improved spend reporting & transparency to enable lab departments to more accurately complete budget process
- Improved trending capability to enable lab departments to more accurately manage inventory levels
- Adopted Lawson Financial Management System and as a result, CTCA is seeing ongoing improvements in effi ciency
This particular project identifi ed some additional opportunities to be explored by our Lab/Materials Management Green Belt Team after the distribution standardization project closed which included:
- Price parity with direct vendor
- Financial analysis showed an ongoing annual supply cost reduction of $24,395.00 which represented a 7% expense reduction compared to prior years
- Lab supplies standardization
- The Lab Team and Materials Management Team will continue to focus on product standardization across the organization which can yield an ongoing 2% in cost reductions
For more information please contact:
Ahmed Ayad
Director of Lean Six Sigma Operations
Ahmed.Ayad@ctca-hope.com
