The Healthcare Hub

Standardizing and Automating Order Confirmations: The Long-Tail Effect

Friday, February 22, 2019

What role does the purchase order acknowledgment (POA) play in supporting better patient outcomes? This simple task, when accomplished, can be traced back to multiple advantages in the healthcare supply chain. This is especially true when the POA is part of a holistic, standardized approach to order management. The supply chain team gains greater visibility into order status and can better manage the process of delivering the correct products in a timely manner to support patient care.

Visibility into order status is critical for hospitals to manage their supply chains, and the POA serves a vital purpose early in the order process to ensure accurate and timely product delivery. When there is ambiguity around the order status due to a missing POA, or the POA is delivered manually (via fax or email), valuable time is lost running down the information needed to ensure that the order has been received. Automating the POA process provides efficiency to support more “touchless” orders and helps to recover time that can then be applied to more strategic activity. But, as a healthcare provider working in supply chain, you may be thinking about the more complex issue of training your suppliers on your preferred method of response and understanding the shared value of a POA.

Standardizing and automating order confirmation is the subject of a recent GHX case study. The organization experienced a high rate of its suppliers either not sending POAs or sending via email or fax, often to the wrong destination. Supply chain spent a lot of time manually documenting this information and making calls to confirm order status. Even faxed or emailed POAs that reached the right destination required manual work to be received into their enterprise resource planning (ERP) system. The labor required to complete the process was equivalent to one full-time employee. This was time that could be dedicated to doing more strategic work.

This university medical center was leveraging My Exchange and MetaTrade to maximize automation in order transaction processing and management with its suppliers. MetaTrade allows providers to order electronically from suppliers that are not connected to the GHX Exchange. However, those suppliers that didn’t respond with a POA created a gap in order transaction management, introduced additional manual tasks and potential product delivery delays. In response to this challenge, the organization implemented a managed service from GHX to standardize and automate order confirmations and to address the complex issue of supplier partnership in the process. The service increases electronic verification of purchase orders from suppliers regardless of their response method – email, fax, phone or web link provided to MetaTrade order partners.

The organization recaptured time spent chasing those POAs and is leveraging My Exchange with the additional transaction data in the dashboard. Greater visibility means the purchasing team can now identify and resolve problems (backorders, rejected orders) before patient care is impacted. The number of “perfect” orders increased week over week because the purchasing team could proactively manage exceptions through the My Exchange dashboard. Also, the purchasing team can now work more strategically to prioritize unconfirmed orders based on days outstanding, allowing them to tackle the older ones first and drastically decrease the number of unconfirmed orders.

The POA is a key part of driving efficiency throughout the order transaction process. Implementing a standardized and automated process for order confirmation serves both healthcare providers and their trading partners by reducing manual activity that detracts from the ultimate goal of better patient care.

You can read the complete case study here.

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