Are you juggling too many vendors? By consolidating service providers to a short list of trusted partners, you can reduce complexity, lower costs, and gain operational efficiencies. Read on to learn the why, when, and how of vendor consolidation.
Why Consolidate Vendors
More vendors means more contracts, more billing, accounts receivable, more training, more variety in the ways things are done, less integration, less inventory control – and definitely more staff on your end to manage them all! Multi-vendor complexity reduces business agility, inhibits a wholistic operational view, and can impact quality, fulfillment rates, lead times, and total transaction costs – all with weak and dispersed accountability (also known as finger pointing!) As it relates to asset utilization, more vendors can mean slower turns, which translates to your capital not working as well as it could for you. Most companies find economies of scale and cost savings when they reduce the number of vendors they work with.
There are many benefits to having fewer service providers/suppliers. First and foremost is improving operational efficiency while reducing risks and complexity. In addition, by consolidating vendors, healthcare businesses achieve:
- Improved vendor quality
- Stronger vendor relationships
- Greater purchasing power
- Significant time savings
- Higher staff satisfaction
- A better experience for patients
Why Reduce Vendors Now
Here are three reasons that make now an optimal time to look at reducing your service providers:
- Most businesses are assessing their year-end estimated results and beginning the budgeting cycle for next year. Their vendors are too. This is a great time to figure out exactly what you need and begin negotiations from a position of strength. Learn more about reducing costs.
- Recession rumors continue. That means wise businesses are looking to further control costs. Especially in the healthcare market, everyone’s challenged with doing more with less staff, eliminating time wasters, reducing third party delays and errors, and bolstering the supply chain. Streamlined services and reliable vendors are critical for the upcoming year.
- Competition in the healthcare industry is fierce. Every edge matters. For a business to scale, they must capture higher profits, track all inventory, and have processes and logistics in place that are second to none. Who you align with as partners makes all the difference.
How to Consolidate Suppliers
It may feel daunting, but the steps to consolidating are actually not too difficult. Here are 5 steps to optimizing your vendors:
- Conduct an inventory. List out the services you need. List your current vendors and the services they currently provide.
- Assess performance. For each supplier, rate its customer service, cost effectiveness, and any specialty procurement areas it covers.
- Develop a plan. Cross off those that do not qualify as active, value-adding partners. Short-list top performers and map them against the list of services you needed from step 1, highlighting any gaps.
- Initiate conversations. Meet with these top suppliers and delve deeper to understand their complete service offerings compared to your needs and gaps. Discuss with them your challenges and, together, craft optimal solutions and negotiate the best contracts.
- Monitor performance. Put a scorecard in place with the performance factors from step 2 and set quarterly meetings with your vendor partners (much easier now that it’s a smaller group) to discuss what you need from them, any changes in the business climate, and any new services they’re adding that might be a fit for you.
Why Quality Biomedical Rises to the Top
Quality Biomedical is the leader in respiratory equipment management because we are an all-in-one managed services solution. The only provider with nationwide coverage, we manage the repair, warehousing, and logistics of your respiratory equipment. And, unlike anyone else, our customers benefit from purpose-built technology that tells them where all of their inventory is at any time, creates instant RMAs, and provides reports so they can know the lifetime costs, total cost of ownership, usage, reliability, and depreciation. Best of all, this technology is free to our customers. We believe in long-term partnerships and solving the service-related challenges that healthcare providers are facing. If you would benefit from a partner who is invested in your success, reach out to us so we can tell you about how this new technology can help you grow!