What is the True Cost of Changing Suppliers?

March 2012 - Vol.9 No. 3 - Page #1

Given the number of products, services, and systems used in the hospital pharmacy setting, problems with specific suppliers often arise when customer service does not meet operational needs. What is troubling is that these problems often are simply accepted as inevitable. Enabling this acceptance is the ill-conceived perception that the cost of changing vendors—both financially and operationally—is too significant to bear. In reality, it is persistently important to consider the potential operational and financial gains that could be realized by moving to a supplier better suited to your operation.

The perception that moving from one supplier’s product to another’s would be a parallel (or even a regressive) transition is generally unfounded. For example, it is not unusual to find functionality upgrades have been made to competitive products that practitioners may be unaware of. In addition, the buyer often has opportunities to defray existing costs by negotiating with alternative suppliers eager for new business. One tactic is to inquire as to whether a potential supplier can assume the associated financial costs of switching to their product or service; perhaps the supplier can give cost credits for the staff overtime needed to adopt and operationalize the new system.

Managing risk is perhaps the greatest challenge for any healthcare practitioner, and this certainly is the governing mandate for all institutional pharmacy operations. Therefore, the question all managers should ask themselves is: does accepting inadequate performance create more risk than the product or service mitigates?

Time is universally the most valuable asset no one wants to waste, but feeling powerless to change a disadvantageous supplier-customer relationship is itself a slow burn. Managers cannot meet the high expectations they set for their pharmacy departments unless the suppliers they employ are meeting those same high expectations. At PP&P, we encourage all pharmacy directors to see what is out there. You may be surprised at what you can do to improve your operation with minimal investment of time, money, and resources. We also encourage you to peruse our online resource, Findit (2finditnow.com), to see what suppliers are available to you. As with all things related to hospital pharmacy practice, we are here to help.

All the best,
R. Mitchell Halvorsen







P.S. PP&P would like to congratulate Nancy Blain, RPh, as the winner of our recent 2011 Survey Participation Sweepstakes! As the randomly selected winner from among all our 2011 sweepstakes, she won for her participation in our Generic Drugs Survey. As winner, Nancy, the pharmacy manager at Osceola Medical Center in Osceola, Wisconsin, will receive seven 8GB iPod Touch devices for herself and her staff! 

For a list of past winners and their prizes, visit www.pppmag.com/winners/



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