Dr Vinoth Kumar C
Healthcare Management Spec., Former DGM–Materials
Apollo Hospitals, Kochi

Effective supplier relation management strategies

Research studies reveal that almost 50 percent of the problems in hospitals are related to supply chain issues and out of which, 75 percent of the problems happen due to poor supplier relations. Most of the hospitals start managing the supplier relationships only when they face problems or unpleasant situations with suppliers and that consumes quite a lot time and resources, which could have been better spent on more important business processes. Ideally, the relationship management should start even much before an agreement with supplier is signed, to avail the competitive advantage of the business in the long run and such approach can lead to a successful relationship and the results will accrue much better than the traditional way of managing relations. Since hospitals being the most complex one with myriad differences and perspectives, we need to indeed strike a chord between both the parties and maintain a strong and deep meaningful relationship with vendors.

The following strategies can help the organization to achieve better results:

Suppliers are our partners. Treat the suppliers as our partners and the partnership should not only based on financial aspects but also on mutual trust and loyalty. We should make them feel that they are part of your business.

Timely payments are important. Payment should be effected in committed time which will make them to feel that we are a reliable customer and easy to work with. In case of any delay in payment, then inform the supplier as soon as possible with the date on which they can expect the payment.

Maintain strong relationships. The suppliers should be informed on up-to-date on our strategy and plans so that they can plan accordingly to align and fit into our strategic vision of our organization that enhances relationship.

Execute a detailed agreement with regular suppliers. A clear and well explained document will reduce the possibility of confusion and disputes in future. Incorporate appropriate service levels and metrics into agreements.

E–procurement. Invest in a good supplier management software to implement e-procurement solutions for better relationship with the vendors. This solution can bring seamless operations by collaborating with key stakeholders within the organization and in the supplier organization in a trackable way, also provides assistance on quality control through alarm and notifications and thereby errors, confusions and misunderstandings in supplier responses can be minimized to a greater extent that results in maintaining good relationships with vendors.

Evaluate the risks. Risks to be evaluated before we enter into agreement with the vendors. References, past track record on their delivery, service and in managing crisis situations to be sought for before we finalize with the vendor.

Operational planning. Proper planning is important to place orders with the vendors with acceptable lead time and without multiple changes. If every order requires emergency handling, the relationship will never work.

Planning for major contingencies. Unavoidable events that stress the supply chain should be planned and practiced. Every supply chain strategy requires similar foresight, joint planning and collaborative approach so that disruptive events can be managed smoothly.

Get everyone on board. All stakeholders in our organization should be involved and to be taken on board to maintain strong relationship with suppliers.

Collaborative approach. A group of hospitals in a region or district can join hands together for procurement that enhances supplier relationships in addition to volume discounts.

The healthcare organization that focuses and enhances supplier relationship results in eliminating risks, increased efficiency, significant cost savings, continual improvement, revenue growth, improved clinical outcomes and highest level of patient satisfaction. 

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