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Wednesday, January 24, 2018

Punch-out Procurement Delivers the Double Whammy

Supplies in the category of maintenance, repairs and operations (MRO) can be particularly challenging – and costly - for healthcare providers to manage. While the products may cost only a few dollars each, the overall cost to procure these items can equal - or exceed – the cost of the products themselves.

In many cases, hospital maintenance staff will go out and shop at local stores for these items using their purchasing cards. Not only are the products procured this way often more expensive than those from suppliers with which the hospital has contracted, there are also the added labor costs and other expenses associated with staff members shopping at various local stores. It is clear that gaining visibility into and control over these items presents a significant opportunity for cost savings.

Sun Country Health Region is comprised of 28 facilities; primarily long-term care centers, throughout the southeast corner of Saskatchewan, Canada. Sun Country and one of its key MRO product suppliers, Acklands-Grainger, recognized this opportunity to drive greater process efficiency and cost savings in the procure to pay process for these products. They engaged with GHX to help them implement a solution.

In August 2016, Sun Country implemented GHX round trip solution, which enables the organization to punch out directly from GHX Procurement Suite into Acklands-Grainger’s web-based catalog. When searching the supplier’s catalog contract pricing is visible to the user right on his/her screen. When the user selects an item to purchase it is transferred directly into his/her GHX shopping cart. The order is then sent to his/her manager electronically for approval. From there, materials management creates the purchase order (PO) and the PO is sent to Acklands-Grainger electronically via the GHX Exchange. The supplier then sends back an electronic confirmation via the Exchange.

“Round Trip makes all of the items readily accessible and we can see product availability and backorders immediately,” said Jill Littlemore, manager of Finance and Purchasing, Sun Country Health Region. “There are no exceptions because the information that we use in our POs is taken directly from the supplier’s catalog.”

“When you think about the procurement process, if you can punch out directly to the supplier catalog, gain access to your preferred pricing that’s available through that catalog and punch out directly through your system which follows all of your own procurement rules and approval processes it takes away the vast majority of manual steps that would be required to complete a purchase,” said Joshua Belinko, director of Sales, Government and Public Services for Acklands-Grainger. “The result is significant savings in both time and money.”

Sun Country has expanded its use of the round-trip solution to two additional MRO suppliers. The organization now has a streamlined, efficient, 100 percent electronic ordering process (from requisition to PO) through which it can ensure that contract pricing is obtained. Users save time since they now have a one-stop shop for all of their needs. Materials management staff can easily track orders and match invoices to POs because everything is processed through one electronic and automated system.


To learn more about Sun Country Health Region’s work with Acklands-Grainger and its other MRO suppliers, listen to this GHX webinar recording - Punch-out Procurement with Acklands-Grainger & Sun Country.

Contracting Order Lifecycle Management