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SAPPOV: Healthcare providers need to implement leaner supply chains

Jon Arck, SAP IBU Healthcare Providers discusses how transparent supply chains and digital processing help healthcare providers improve patient care and safety and reduce costs in a challenging economic climate.


In the United States healthcare providers are being put under ever-increasing pressure due to an ageing population, and an increasing demand for care with a decreasing number of practitioners. In addition, cuts in government spending, and additional regulations are placing additional burdens on the industry. Integration of the Ariba Network into the procurement process can counter these pressures by improving supply chain efficiencies and effectiveness and cutting costs.

Operational pressure is being put on healthcare providers by a multitude of factors, such as contract compliance, managing supplier risk, and closely managing costs. In response to this, healthcare organizations are looking for ways to make their supply chain processes more efficient, while still being able to achieve their operational goals.

Healthcare organizations have spent billions of dollars in personnel, reengineering, and systems over the past two decades to improve their internal process and information flows. While this had led to significant improvements internally, such collaborative efficiencies still are lacking when it comes to transacting with trading partners. Currently, more than eighty per cent of purchase orders and invoices are processed on paper. By some estimates, all this inefficiency costs business $650 billion per year in higher operating and supply chain costs.

Implementation of the Ariba Network can help healthcare organizations overcome such challenges and improve patient care and safety (and through them,
outcomes), cash flow, and efficiency of their supply chains. One example is Maxim Healthcare Services, with 350 offices in 43 states, who had challenges of low PO usage, 100% manual invoices, and disconnected Procurement and AP processes.  As a result of implementing the Ariba Network and applications, Maxim has realized processing efficiencies and cost savings through a 40% time savings in procurement, electronic conversion of 100% of its invoices through the Ariba Network, and electronic pay and remit. 

In the current climate, it is imperative for providers to monitor and manage their supply chain processes due to clinical and financial pressures from numerous sources. Integration of the Ariba Network and implementation of Ariba applications enhance clinical and operational efficiency, as well as financial management, to enable healthcare providers to better serve their patients at all levels.

To learn more about we can help you with your business challenges, please take a look at SAP’s Solution Explorer for the Health Care Industry.

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