In order to keep your budget on track this year, you need to be aware of hidden costs that can break your budget. The truth is: what you don’t know can hurt and without further investigation, your shiny new 2023 budget may be doomed from the start. Here are three areas of hidden costs that you can assess to stay on budget this year:
- Hidden Costs in Total Cost of Service (TCOS)
Many providers only look at the cost of repairs and ignore the significant cost of equipment management before and after the repairs. For example, most providers estimate the cost of sending a truck to swap out a defective unit at over $100; but, if they send their equipment to the OEM, many ignore the hassles involved with getting RMA numbers from the OEM. What is the cost of your team’s time?Speaking of time, are you calculating the cost of turn-around time from your vendors? As it relates to asset utilization, the faster the turn, the sooner your capital is back on track. This time factor converts to a hidden cost of capital.
Third-party freight errors and delays cost money and time. At Quality Biomedical, we design and implement logistics programs to save both. We understand that fast turnaround time improves business outcomes. Our ISO 9001 quality systems provide a consistent process and our national network—with extended logistics pickup and delivery services—reduces transit time and cost.In addition, our QConnect equipment management hub delivers dashboard visibility. We make it easy to generate RMAs, approve estimates, and review service histories. Check out our latest innovation to improve workflow.
- Hidden Costs of Multiple Vendors
How many touchpoints do you have to maintain your equipment? The more vendors, the more problems in purchasing, accounting, invoicing, receiving, wrong parts, incorrect invoices, incorrect purchase orders, return shipments, lost shipments, shipping expense, and more. Most companies find economies of scale and cost savings when they reduce the number of vendors they work with.
Quality Biomedical is a one-stop managed services solution. We take care of the repair, warehousing and logistics, and manage it all through the intelligence of our proprietary cloud-based QConnect platform. This means medical equipment gets where it’s needed, when it’s needed, while also delivering economies of scale that save money and make life easier for OEMs, HMEs, LTACs, and other healthcare providers.
- Hidden Costs of DI
If you are servicing equipment in-house, are you considering the costs not only of the servicing employees’ salaries, their training, and their benefits; but also the extra overhead costs such as building space and utilities? You should also factor the opportunity cost of that capital – in other words, could you make more money using that space for a different purpose or even renting it out? Here is a case study about the hidden costs of DIY respiratory equipment service.
The truth is, most companies are losing money doing service in-house and don’t realize it. For example, while it’s tempting to think you’re saving money by servicing oxygen concentrators in-house, it’s easy to fail to account for the plethora of administrative tasks required to support that effort.
- It begins with purchase orders for parts which adds work to the purchasing department.
- Oftentimes shipments are lost, delayed, or the wrong part is shipped; resulting in more time to track and fix issues.
- Companies also often overlook the cost of inbound freight and outbound freight as they return defective or incorrect parts.
- The accounting department must pay invoices and bear the administrative hassle involved with incorrect invoices, incorrect number of units, taxes, etc.
- Next, the receiving department must receive the parts properly and once stocked, they must then be pulled and given to the BioMed technician.
- Periodically an audit must be conducted to determine proper inventory levels. 99% of the time shrinkage and other related inventory problems are found that cost the company thousands of dollars.
- And last, the time cost in training technicians to service the units properly is often overlooked. Technicians leave after a short period of time and you must then have to retrain others.
As you can see, in-house servicing of just your oxygen concentrators is costlier than you probably imagined. The good news is that Quality Biomedical has helped many organizations just like yours find ways get the most from their budgets. Set up a meeting with us. We know exactly where to look to uncover your hidden costs. We’d be happy to see what benefits we could bring to your budget this year.