Use Supply Chain Data and Analytics to Maximize Supply Savings

The secret to maximizing supply savings lies with harnessing the power of accurate data. Read on to learn how data integrity ensures accuracy, efficiency and value for community hospitals.

April 22, 2025 | | Written by Melanie Newcomb, CHC VP of Supply Chain Operations and GPO Implementation

Why Data is Important

Data precision is one of the most important aspects of supply chain management. Accuracy from the onset is crucial to ensure the right product quantity is received at the right price. Clean data also helps hospitals carry an appropriate amount of inventory, monitor inventory expiration dates, and value inventory appropriately. Ultimately, the only way for hospitals to enhance their contract commitment and identify cost-saving opportunities is by maintaining data integrity.

Best Practices

There are five best practices we recommend for supply chain data. The item master is where data integrity begins, and it pays to be thorough. The first key action is to establish a unique item master for each new product entering the hospital, making sure to avoid recycling item numbers. Next, ensure that every element of the item master is accurate and standardized. This includes accurate manufacturer details, manufacturer item number, vendor, vendor catalog number, units of purchase, packaging strings, pricing, and contract information, including expiration date.

Three-way invoice checks are another best practice. Before authorizing payments, thoroughly review the order quantity and contract price against the received amount and invoice total, ensuring complete alignment. This extra due diligence often catches errors that can potentially cause over-payment and inflate inventory value.

Another best practice is building and maintaining a strong relationship with your distributor. This helps hospitals in several ways. If hospital data isn’t accurate for distributor items, the distributor can provide the correct data elements to assist with data cleansing. Also, distributors have access to alternative sources and products when shortages occur. This has been extremely important for our client hospitals over the last several years with various product disruptions during and after the pandemic.

Lastly, we recommend regular business reviews involving the CEO, CFO, supply chain, and pharmacy teams. Twice-yearly data reviews are essential to review contract commitment, reported sales, rebates, and purchasing patterns, which could lead to additional savings and standardization initiatives.

How to Evaluate Data

After analyzing data for years, our team can almost instantly recognize when data is skewed or inaccurate. To pinpoint the problem’s source, we start by assessing the data mapping. We then scrutinize whether capital investments could be included in the supply data and separate them. We then turn our attention to categories with higher expenditure. Drilling down to an item-master level within a category, helps us spot inaccuracies such as incomplete data elements, duplicates, and other data-related issues. After we identify the source of the problem, we scan other categories to determine if the issues are widespread, and then suggest improvements.

At the end of the day, it’s about maximizing savings on high-quality supplies. When a hospital pays less, the facility may be able to reduce costs for patients as well.

This article is sponsored by Community Hospital Corporation.

Community Hospital Corporation
Community Hospital Corporation owns, manages and consults with hospitals through CHC Hospitals, CHC Consulting and CHC ContinueCARE. www.CHC.com