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Getting the Most Out of Your Distributor
What else can it deliver you?
David Bernard
Publish Date: April 3, 2008

To busy surgical administrators, the chief purpose of distributors is offering supplies at good prices and delivering them on time. Beyond the usual distributor-client transactions, though, companies also promote free or inexpensive ways to make inventory management more efficient. Here's a rundown of some value-added services you might not know your distributor offers.

Get all your supply needs met
Signing on with a specialty distributor for certain high-use products can pay off. Suture Express, which deals in discounted wound closure products, anticipates what its clients demand and prepares its stock proactively based on their buying patterns, says Kurt Rall, vice president of sales.

"If a surgery center or hospital uses a box of suture one time a year, we'll stock in anticipation of their order," says Mr. Rall. Since the company requires no minimum volume per order, and orders placed by 3 p.m. Central time are delivered overnight, he explains, suture par levels can easily be maintained through just-in-time inventory.

On the other hand, one-stop shopping offers benefits of its own. While most supply buying involves gloves, gauze, procedure packs and other surgical necessities, ASCs have to buy pharmaceuticals and office supplies, too, says Scott Jackson, vice president of sales for McKesson Medical-Surgical.

Since non-surgical-supply sales reps tend to overlook ASCs in favor of hospital accounts, says Mr. Jackson, the underserved market was an ideal fit for a medical distributor already visiting the smaller facilities. "At the end of the day, we're a logistics company," he says. "So whether it's pens or packs, we're about delivering on time."

Single-use instrument reprocessing
Companies that specialize in single-use instrument reprocessing don't have the reach to cover a fragmented national surgical market, says Mr. Jackson. By partnering exclusively with McKesson, Medisiss's reprocessing services are available to ASCs nationwide through the distributor.

"The cost for single-use device reprocessing is half the price of the instrument. If you buy it for $100, it can be reprocessed for $50. And it can be reprocessed five to seven times," says Mr. Jackson

McKesson is also partnered with Integrated Medical Systems, an instrument maintenance contractor, to provide repair services for endoscopes and other surgical devices under its distribution contracts. Outlays will be included on your McKesson invoice, making cost reviews more convenient.

Consignment and reporting
Stocking an inventory of surgical supplies can be a budget hurdle for new ASCs when cash flow is tight and revenue has just started trickling in. Medline Industries' Access consignment program lets you keep your shelves full while eliminating inventory holding costs. Under Access, facilities are invoiced for the supplies only after they're used, which sales reps calculate by routinely reviewing storage areas.

"[The service] is not exclusive to ASCs, but it works well for them," says Dirk Benson, vice president of sales for Medline's ambulatory surgery division, who notes that some manufacturers of ophthalmic intraocular lenses and surgical implants also offer consignment services.

Lean operations and high case costs mean that 25 to 30 percent of an ASC's budget is spent on supplies, as compared to 10 percent of a hospital's budget or four percent of a physician's office budget. That's a compelling reason for administrators to know where their money is going, says Mr. Jackson; yet many aren't aware of the powerful reporting tools available to them. McKesson's Supply Manager reporting can break down supply spending and generate material usage reports by time period, product, category or whether it was purchased on- or off-contract.

If you do nothing else in terms of budget reporting, "at the very least, for one quarter a year, sit down with your distributor and do a business review," says Mr. Jackson.

Consulting for efficiency
Your distributor has visited enough surgical facilities to understand the issues they have in common.

"Surgery centers are often challenged by space constraints," says Mr. Benson. Medline's space utilization and redesign assessment, which it offers free to its clients through a partnership with Wes-Pak, provides a written analysis and potential redesign plan — including drawings, 3-D model views and even interactive video — for storage areas throughout your facility, from supply rooms to OR cabinets.

The company's logistical thinking can also assist in gaining control over the supplies your facility buys. Medline offers its customers utilization and standardization reviews for their trays and procedure packs as well as for gloves. Their experts' in-depth analysis involves monitoring procedures and workflow to track item usage and interviewing surgeons and staff about clinical needs to determine the optimal selection of products for cost savings and reduced waste.

Automated ordering
"Eighty percent of our customers order supplies electronically," says Mr. Jackson. "Technology has a lot to offer materials management. The key is to have technology that makes it easier for people who don't have time."

McKesson launched its Scan Manager bar code scanning system about a year ago, and has recently installed it in its 600th surgery center. The system employs a handheld device with which users move from shelf to shelf, scanning bar coded supplies. The device is then plugged into a docking module, which uploads the information it's collected for inventory results or for automatic reordering. The system is ideal even for small ASCs, says Mr. Jackson, on account of its price: the equipment is leased for about $75 to $100 a month.

Medline's Med-Pack brings the efficiency of computer applications to procedure pack management. The interactive information resource lets you view your packs' production status and delivery dates, look back at the past 12 months of purchasing activity, request changes and update preference cards, analyze packs' contents for latex or safety concerns and locate lower-cost alternatives.

"It's difficult for clinicians to keep up with their credentialing," says Mr. Benson. "Hospitals have systems to stay on top of this, but ASC staffs are busy."

To that end, his company offers its customers access to Medline University's continuing education credits for a nominal fee. The online program provides a wide array of CE opportunities in such current and relevant subjects as OR technique, infection control, wound care and safety topics. Since the course content, test and certificate are available online, busy staff can complete them at their own convenience. While the program isn't exclusive to ASCs, says Mr. Benson, the response has shown it works well for them.

Working smarter
Most hospitals have a staff member dedicated to materials management, but a much smaller percentage of ASCs do. Because the workload and responsibilities of ASC management often call for double duties and multitasking, conducting an evaluation of your distributor's value-added services may get bumped from an overbooked schedule. But taking the time to do so may surprise you.