A look back as we look ahead to best practice adoption
It’s been almost 20 years since my friend and colleague Mike Neely and I started amassing a list of supply chain best practices. The list wasn’t scientific — it was drawn from our collective experience leading supply chains and observing supply chain operations around the country. We saw many practices that were not common and that consistently resulted in efficiency, cost minimization, and/or enhanced customer satisfaction. It wasn’t enough that a practice was working for one organization. It had to be established in enough organizations to have proved its worth. The list started small with about 20 and grew through the years. It now stands at more than 70. And that doesn’t count the ones that have dropped off over time.
How does a best practice drop off? That happens when the practice becomes the industry standard. A great example of a now-industry standard best practice is stockless office supplies. Twenty years ago, it was very common to stock pens and pencils in the storeroom. Then some leaders worked with suppliers to develop cost effective stockless systems for office supplies. It quickly became a best practice, but it took many years for everyone to adopt it. Now virtually all supply chains provide office supplies through stockless systems. Interestingly, this best practice spawned two others. The first was combining a stockless system with a formulary so that only the most cost-effective common items were purchased. The second was making these systems direct-order through some form of automation. Such is the evolution of best practices.
One point of interest is how few best practices have actually dropped off. While many organizations have adopted many of the practices, few practices have been so universally adopted that they have become common. For a supply chain consultant, that is good news. There is still much opportunity for individuals like me to help organizations improve in these areas. But for a supply chain practitioner, it is disappointing — or it should be.
As I look through the list there are some practices that are coming close to common. We don’t see many patient charge stickers anymore — although they still are out there — and more organizations are doing much better at controlling vendor access. The number of organizations having value analysis (or a similar program using most of the same concepts) has grown, and the impact and influence of those programs has increased. We now regularly see the OR and Supply Chain teaming to drive cost reduction and standardization. Most organizations have a reprocessing program, although some are not robust. Electronic requisitions and automated invoice matching are probably close to being common.
But the adoption of most other best practices is spotty. Having Accounts Payable report to Supply Chain is a proven value, but it is still the exception rather than the rule. So many organizations still refill PAR locations seven or (even worse) five days a week. Many organizations still allow the contracting of services without documentation through a purchase order and even without Supply Chain involvement. Marketing services and materials, information technology software and hardware, and insurance products are all routinely procured outside of Supply Chain. Poor relationships and communications with legal can add weeks or months to contract formation. Some other less frequently implemented best practice opportunities are: Formal value analysis education, use of customer satisfaction surveys, formal supply chain quarterly reports to executives, expanded use of EDI and use of team negotiation.
Why are best practices so hard to implement? There are so many reasons. Time and energy are one issue. There always seem to be other priorities and fires to fight. Sometimes there are political issues to contend with. Sometimes there is customer resistance — or even internal staff resistance. Sometimes it just doesn’t seem feasible at first look. But remember that every best practice has been successfully implemented at many other facilities. They found a way to overcome the barriers, and they are reaping the benefits.
Healthcare Purchasing News published my first column on best practices in 2005. Since that time there have been articles on many of the practices on the list. While there are still practices to go, this will be my last column. It’s time for a new generation of supply chain professionals to review and expand the list, to share their experiences with emerging best practices. There are always new best practices being developed.
I would like to take a moment to thank Rick Barlow and HPN for giving me the opportunity to share my thoughts with my colleagues. And thanks to you, the readers for your interest and feedback. If anyone would like a copy of the current list, please send me an email. I’d be pleased to provide it. And finally, I’d like to issue a challenge. Embrace the search for best practices. Seek them out from publications, peers, consultants, AHRMM. Then find a way to implement them at your facility. It’s not always easy, but it is almost always possible — and fruitful.
