HIDA (Alexandria, VA) released a study that found hospitals see substantial cost savings and greater employee and time efficiencies by maximizing their spend through a distributor, particularly in the areas of product ordering and receiving. The study, “Hospital Procurement Study: Quantifying Supply Chain Costs for Distributor and Direct Orders,” was conducted by Pricewaterhouse Coopers and looked at hospital purchasing practices for distributor and manufacturer-direct orders at 32 hospitals of varying sizes and locations across the country over the last 12 months. It focused on hospitals that used a prime vendor distributor, and compared the time and related costs associated with distributor orders to those for manufacturer-direct orders. The results revealed that distributor orders are three times as likely to be electronic and average less than 30 seconds per purchase line order, while manufacturer-based orders average more than three minutes per line due to manual ordering and sign-off; distributor-dominant practices such as advance ship notice reduce staff time spent reconciling receiving invoices and orders; and hospitals spent an estimated $67 per day receiving distributor orders versus $131 on manufacturer-direct orders.

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