OC Reilly Blog: The Message Is Getting Through

By Vicki White, Executive Director, Business Operations, OC Reilly Inc.


(Feb. 15, 2016)–Wear a hat. Eat your vegetables. Look both ways. Check the fine print. Eventually, the message gets through. It may require getting burned – or worse – but given enough time, a good, solid, wise message will break through the clutter and make it all the way home.

Such a moment may be occurring across the wide world of health care and its supply chain providers.

“As much as 40 percent of a hospital’s budget is non-labor, thus making supply chains’ span of control the second-highest and fastest-growing operating expense for our hospitals,” states Brent Petty, a health care consultant from Lexmark International Inc., as quoted in the January/February 2016 edition of Supply Chain Strategies & Solutions magazine. 

“Faced with significant and often rising non-labor costs and evaporating reimbursements, hospital executive teams are increasingly seeking ways to reduce their total operating expenses,” Petty continues. “Nothing new here except for the question: Where are they turning?

“They are turning to supply chain.”

Yes, the message has broken into the clear. At OC Reilly, we have long held the belief that supply chain is nothing less than “a treasure hiding in plain sight.” Too long neglected as either insignificant or not worth the time and effort to truly evaluate and adjust, supply chain is starting to attract the spotlight – and deservedly so.

As the roiling, boiling economic realities of health care in the U.S. keep changing and churning, supply chain decisions remain an easily addressed area where careful assessment of current contracts, knowledgeable negotiation and re-negotiation of deals, and a general cleaning-up of wasteful practices and purchases can have an immediate and impressive impact on bottom-line performance.

So eat your broccoli, wear your hat, and seek out professional guidance on your supply chain systems. That’s good advice being heard and followed more often these days.