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The Importance of a Logistics Supply Chain Plan

Larry DooleyVP, Group PurchasingROi (An Operating Division of Sisters of Mercy Health System)St Louis, MO. Date: September 2008. The Importance of a Logistics Supply Chain Plan . The Importance of a Logistics Supply Chain Plan . Logistics Planning: There is more to cost reduction then best price. Effectively addressing logistics (a business-planning framework for sourcing, storing and consuming materials) can provide strategic opportunities for cost containment. .

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The Importance of a Logistics Supply Chain Plan

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    2. Larry Dooley VP, Group Purchasing ROi (An Operating Division of Sisters of Mercy Health System) St Louis, MO

    3. Date: September 2008 The Importance of a Logistics Supply Chain Plan

    4. The Importance of a Logistics Supply Chain Plan Logistics Planning: There is more to cost reduction then best price. Effectively addressing logistics (a business-planning framework for sourcing, storing and consuming materials) can provide strategic opportunities for cost containment.

    5. The Importance of a Logistics Supply Chain Plan Todays Overview: Importance of Supply Chain Plan/Logistics Current Environment Logistics Planning Logistics to the Next Level Conclusions Questions

    6. The Importance of a Logistics Supply Chain Plan

    7. The Importance of a Logistics Supply Chain Plan Key Element for Successful Implementation of Logistics Planning - Requires

    8. The Importance of a Logistics Supply Chain Plan What is Logistics There are numerous definitions of Logistics. The following definitions are examples that can best apply to the provider side of the Healthcare Industry

    9. The Importance of a Logistics Supply Chain Plan

    10. The Importance of a Logistics Supply Chain Plan

    11. The Importance of a Logistics Supply Chain Plan Supply Chain Management Strategic Plan with a foundation built on Logistics will provide a healthcare organization with the ability to Procure, receive, warehouse, and move all key supplies through an entity at the lowest total delivered cost while ensuring the clinicians have the right product at the right time to deliver the highest quality healthcare in the markets they serve

    12. Healthcare Spend Data Given the large difference in the amount of dollars spent within healthcare logistics, we have a lot of opportunity to decrease costs to bring healthcare back in line with other industries that have learned ways to keep their logistics costs low. Given the large difference in the amount of dollars spent within healthcare logistics, we have a lot of opportunity to decrease costs to bring healthcare back in line with other industries that have learned ways to keep their logistics costs low.

    13. Supply Chain Logistics Current Environment

    14. Supply Chain Logistics Planning Logistics Planning

    15. Supply Chain Logistics Planning Logistics Planning Supply Chain Management and Logistics are very broad and deep in practice: Plan needs to be narrowed to help HCOs understand the value in how having a specific Logistics Plan will bring value Focus on procurement and receipt

    16. Supply Chain Logistics Planning Logistics Planning Key Elements Sourcing Procurement Ordering Order Management Transportation (direct, distributed, self) Receiving Warehousing Product Movement Entities Accounts Payable

    17. Supply Chain Logistics Planning

    18. Supply Chain Logistics Planning Logistics Planning The average HCO according to the recent KPMG Hospital Procurement study, buys from an average of 1.5 medical surgical distributors Four hundred and forty-three manufacturers (443) direct A logistics plan pre-determines how each product(s) are: Procured Delivered Saves the materials team: resource time actual cost for delivery and / or freight

    19. It isnt difficult to see why these costs are high when you examine this slide. Back in the early 1900s UPS recognized the same mess and the same opportunity to simplify. They approached businesses and set-up one method of delivery for all eliminating the need for each company to distribute on their own. A simple solution grew into the largest logistics network in the world. We have the opportunity to re-engineer healthcare in the same manner with an industry altering impact. It isnt difficult to see why these costs are high when you examine this slide. Back in the early 1900s UPS recognized the same mess and the same opportunity to simplify. They approached businesses and set-up one method of delivery for all eliminating the need for each company to distribute on their own. A simple solution grew into the largest logistics network in the world. We have the opportunity to re-engineer healthcare in the same manner with an industry altering impact.

    20. Supply Chain Logistics Planning Logistics Planning

    21. Supply Chain Logistics Planning Logistics Planning

    22. Supply Chain Logistics Planning Logistics Planning

    23. Supply Chain Logistics Planning Logistics Planning

    24. Distribution Business Model/Economics U.S. Hospital Supply Distribution Market Estimated Size Lehman Brothers (Private Companies Estimates Subject to Wide Variation)

    25. HPIS Top 10 GHX Market Intelligence

    26. HPIS 2006 GHX Market Intelligence

    27. HPIS Data Major Changes 2006-2007

    28. Supply Chain Logistics Planning Logistics Planning

    29. Benefits of Maximizing Distributors

    30. Supply Chain Logistics Planning Logistics Planning

    31. Supply Chain Logistics Planning Logistics Planning

    32. It isnt difficult to see why these costs are high when you examine this slide. Back in the early 1900s UPS recognized the same mess and the same opportunity to simplify. They approached businesses and set-up one method of delivery for all eliminating the need for each company to distribute on their own. A simple solution grew into the largest logistics network in the world. We have the opportunity to re-engineer healthcare in the same manner with an industry altering impact. It isnt difficult to see why these costs are high when you examine this slide. Back in the early 1900s UPS recognized the same mess and the same opportunity to simplify. They approached businesses and set-up one method of delivery for all eliminating the need for each company to distribute on their own. A simple solution grew into the largest logistics network in the world. We have the opportunity to re-engineer healthcare in the same manner with an industry altering impact.

    33. Supply Chain Logistics Planning Logistics Planning

    34. Supply Chain Logistics Planning Logistics Planning

    35. Supply Chain Logistics Planning Logistics Planning

    36. Supply Chain Logistics Planning Logistics Planning

    37. Supply Chain Logistics Conclusions Supply Chain Management can be a key driver of permanent cost reductions and increases in financially sound operational efficiencies Wal-Mart, Target and the other large mass merchandisers Use logistics as a competitive advantage The Health Care industry is trying to emulate other industries to become more cost effective Each HCO/IDN needs to develop and implement a Supply Chain Management Strategic Plan with a significant focus on Logistics

    38. Supply Chain Logistics Conclusions There are Six Levels of Supply Chain Excellence as explained by Dr. Jim Tompkins, Tompkins Associates:

    39. Supply Chain Logistics

    40. Supply Chain Logistics

    41. Supply Chain Logistics To achieve Supply Chain Excellence each HCO/IDN must have the following core competencies:

    42. Supply Chain Logistics Planning Conclusion

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