Supply Chain

Supply Chain and Cost Cutting within a Hospital

Managerial Accounting, BUS 630

Melissa Edwards

July 4, 2011

Mark Taylor

Supply Chain

Supply chain management is commonly used to refer to the coordination of business processes across the companies in order to better serve the end consumers

(Brewer, Garrison, & Noreen, 2011). Cost cutting is basically being able to cut the cost safely of some organizations without having to close down. In this paper I will be discussing the issues that many organizations face when it comes to the proper supply chain management. The specific area in which I will be talking about will be hospitals and how a lot of them have not moved from the materials management into a supply chain management. I will also be discussing how supply chain management and cost cutting can tie things together in a hospital setting.

Main Issues

In the past hospitals would manage the purchasing costs very well and by doing this many hospitals would end up operating very efficiently. In today’s world though the cost of the materials management could end up going over 35% of a hospitals operating budget, with around 20-25% that are going to the supply chains (Mangione & Stark, 2004).

There are many issues that face the hospital executives and the supply chain directors. The hospital supply chain directors. The hospital chains have many insufficient linkages to the clinical systems, revenue cycle, and the clinical operations. A supply chain can be viewed as being a “back dock” support service that provides the products and services that are required by many of the clinical departments. When having the supply chain it should be primarily used for all of the third party relationships. Having non-materials, and having trained people ordering supplies and signing contracts without utilizing any of the supply chain procedures could be drastic; all of the purchasing that is conducted should go through the hospital or any kind of organization at...