What are the benefits of choosing procurement outsourcing in healthcare sector?

ePurchasing & outsourcing Purchasing in Health? we finally offer you a solution!

Increased regulatory requirements in the field of health have a considerable impact on the cost of medicines, equipment and R&D. In this hyper-competitive context, a rationalization of Purchasing, through the adoption of ePurchasing or outsourcing purchases, has become a must for health institutions. Between the obligation to reduce costs and the need to ensure the continuity of care, the major challenge for the health purchaser lies in optimizing the efficiency of the purchasing function. Purchasing outsourcing, such as Spot Buy, is now among the most effective ways of doing so. Before considering this solution, it is necessary to understand what this practice consists of, how and Why outsource ?

The specificities of the procurement function in the health sector

The procurement function is an essential function within an organization, regardless of its sector of activity. It is all the more important in the field of health in view of the specificities relating to the sector and the regulations in force.

One of the specificities of the health procurement function is the obligation to ensure the continuity of care. In addition to having to implement financial optimization and resource management solutions, the health purchaser must also think about prioritizing the quality and continuity of care offered to patients. In addition, there are the constraints of the health sector, such as the need to ensure regular and quality supplies, compliance with strict regulations, the increasing costs of R&D and the reduction of costs. All of this can make it difficult to manage healthcare purchases.

In addition, we must not forget that procurement departments in the hospital environment must manage a very wide variety of purchases and services that are governed by the public procurement code. These include pharmaceutical products, hygiene products, equipment maintenance products, equipment maintenance products, everyday consumer products, catering products, laundry products, etc. Thus, the number of references may be substantial. This makes supplier management relatively complex. Optimizing purchases, by outsourcing non-production purchases and strategic and digitalization, is an effective way to solve this problem.

Note that hospital purchases represent 25 billion expenses per year, which is the second largest item of expenditure after payroll. Controlling these costs is therefore essential.

More and more health institutions are now asking whether the methods of rationalizing procurement used by industry, including digitalization and outsourcing purchases, could not be applied to the health sector to allow them to optimize their expenses. Although the trend is still timid, some establishments have already started to adopt them.

Are ePurchasing and Purchasing Outsourcing possible in Pharma?

Optimizing procurement and procurement management is a real headache for many American and European companies. The healthcare industry is no exception, despite years of growth and profitability.

Pharmaceutical laboratories, hospitals and healthcare manufacturers are now subject to fierce competition. More than ever, these organizations need to control their expenses as closely as possible and to improve the efficiency of their processes.

How can the buyer free up time to focus on high value-added tasks? Purchasing outsourcing : the right reflex for Health Buyers!

Reduced growth, increased pressure on prices and fierce international competition are all reasons that are leading the healthcare industry to review its Purchasing and Sourcing strategies.

Three main trends explain the approach to optimizing purchases through e-shopping or outsourcing purchases Spot Buy:

• Simplifying operational models
• The integration of new business models
• Improving internal collaboration

The use of external resources for some of the procurement or Spot Purchases (or Spot Buy Purchases) is a real opportunity for Pharmaceutical Laboratories and Health Manufacturers who no longer hesitate to invest in this direction.

Your company may indeed be facing a problem of optimizing Spot Purchasing in the near future, because this trend is at the heart of the strategies being deployed in all companies in the Health sector.

But first, what is it outsource strategic purchases or not strategic?

Outsourcing procurement: definition

Purchasing outsourcing, also called “outsourcing” in English, is the operation that consists in a health establishment entrusting a third party with the management of its purchasing policy to a third party for a given period of time. Depending on the contract, the external service provider can take care of all or part of the establishment's purchasing process. The latter can entrust him only with non-strategic or Spot Buy purchases. We also talk about ClSpot Buy C procurement outsourcing.

However, the establishment may also decide to opt for a complete outsourcing of its purchasing policy. In this case, the service provider also takes care of the management of strategic production purchases (class A) and non-strategic recurring purchases (class B).

Purchasing outsourcing is a way for the health establishment to gain competitiveness and to be able to focus on its core business. It is a magnificent performance driver for the procurement department in healthcare settings.

In addition to outsourcing purchases, more and more health institutions are also starting to outsource certain logistical and support functions, such as payroll, information systems (outsourcing), laundry processing, cleaning, catering and building maintenance.

Spot Buy procurement outsourcing: why is it becoming a trend in the healthcare sector?

Here are three major findings about outsourcing Spot Buy procurement or spot purchases in health institutions:

Health buyers don't have enough expertise to cover all types of hospital purchases

As mentioned above, hospital purchases are very varied, and managing them can quickly become complex. As they increasingly specialize by product category, health buyers can no longer cover all of these purchases. They often abandon low-value non-strategic purchases, also called Spot Buy purchases or spot purchases, in favor of strategic purchases.

Spot Buy purchases are outsourced to a single provider

Spot Buy procurement outsourcing to a single provider is now the trend in laboratories and healthcare manufacturers. The provider then becomes the health institution's sole supplier for this type of purchase. He will source the best offers for the health buyer in order to free up time for him to devote to more strategic missions. Outsourcing non-production purchases simplifies the procurement process. It makes it possible to rationalize the supplier base and increase the effectiveness of the purchasing department on strategic purchases.

The digitalization of purchases

In the health sector, two types of change are noticeable. First, there is the short-term evolution that is changing practices and relationships between the various stakeholders in the procurement function. This type of evolution leads to the digitalization of purchases, also known as e-procurement. Then, there is the long-term evolution that can go as far as outsourcing purchases pure and simple.

In terms of digitizing purchases, the Internet will push businesses, including healthcare institutions, to no longer focus on their internal processes. As we can see with the development of marketplaces, the automation of interactions is no longer limited to those maintained with customers nowadays. It extends to suppliers. This is how e-purchasing or e-procurement or procure-to-pay solutions were born.

Thus, a healthcare institution can use e-procurement software, like Sourcing Force, to source raw materials, but also to manage its Spot Buy purchases. The Sourcing Force e-procurement solution combines the services of an e-procurement management tool and a B2B marketplace. This centralization of activities allows the health purchasing function to optimize its costs while gaining efficiency. Indeed, all interactions with suppliers are managed through a single platform.

BME's Sourcing Force solution offers a categorised and detailed treatment of expenses to transform constraints in the health sector into assets.

Digitization and outsourcing of procurement in hospitals: what are the advantages and disadvantages?

Digitalization and Theoutsourcing Spot Buy procurement are a strategy increasingly adopted in the health sector to improve the performance of the procurement department in particular, and that of the organization in general. This trend is justified by the numerous advantages offered by this approach:

Benefits of outsourcing procurement

• Optimizing the buying process : the role of the purchasing department is to obtain the various products or services necessary for the operation of the health establishment and to make them available to each department that ordered them. For each product or material, there can be a wide variety of suppliers with more or less different prices. The buying process for these products is therefore complex and time consuming. By opting for outsourcing purchases, the purchasing department can focus on tasks with higher added value. Once the need for products is expressed, the service provider takes care of it by ensuring that the specifications are respected.
• Focus on your core business : outsourcing purchases allows the purchasing team to remain competitive by focusing only on their core business. She will be able to focus on tasks that bring added value to the company without having to worry about managing a ton of invoices or other administrative tasks with low added value.
• Risk and cost reduction : outsourcing allows healthcare institutions to reduce supply risks or supplier risks and to save money. Being specialists in their field, service providers ofprocurement outsourcing can help businesses achieve economies of scale by reducing procurement costs and gaining flexibility. By sharing risks with service providers, they are better equipped to adapt to external changes.

The advantages of digitising procurement

• Centralization of purchasing data : thanks to the e-purchase solution, purchasing data is centralized. Every stakeholder can access it.
• Simplification of exchanges with the various stakeholders : the digital transformation of the purchasing department also makes it possible to simplify communication within the health establishment. Thanks to the platform, the information shared between the various functions of the establishment is up to date and the same. Each stakeholder will have the same information.
• Harmonization of the purchasing process : thanks to the digitalization of purchases, wild purchases are avoided. Each purchase made must follow a unique process. Thanks to this, the purchasing department will have fewer verification tasks to do. He will be able to focus on his core business. In addition to optimizing administrative processing time, e-purchasing also reinforces the security and reliability of the purchasing process.

eCatalogues Health & Pharma: THE solution for your internal customers!

Thanks to the ePurchasing Sourcing Force solution, healthcare professionals can centralize their supplier catalogs and negotiate quality pharmaceutical products at the best rates while being guaranteed to benefit from a wide range of references.

VWR, LGC, and CEGETEX have already integrated their catalogs into the eAchat Sourcing Force solution.

For these companies, centralization is a guarantee of increased efficiency and a guarantee for their employees to have more than 2 million pharmaceutical products online.

So don't wait any longer to join other health manufacturers such as ROCHE, MEDTRONIC, MEDTRONIC, CENEXI, FRESENIUS, MAYOLY SPINDLER, NOVACAP and many others!