New research shows providers value distribution’s role

Almost 90 percent of IDN and hospital supply chain executives are satisfied or very satisfied with their distribution partner, according to a recent HIDA survey. Below are some key findings from the upcoming report.

A majority of hospital and health system supply chain executives think their prime vendor distributor partner adds value to the supply chain. Distributors’ ability to streamline ordering and procurement was the top benefit identified. “We value the availability of a large selection of items,” said one Chief Financial Officer from the Southwest. “We never know what new item we are going to need next.”

Fifty-three percent of respondents identified supply chain cost reductions as the top advantage of using distribution. Some respondents noted that buying direct can increase total costs: most suppliers have specific order level or delivery requirements, or charge additionally for shipping/freight – which is not always reflected on product list prices. “Small utilization of some products still makes using medical-surgical distribution models work for us,” said one Vice President of Supply Chain in the South. “We avoid small orders with large shipping cost, i.e. cheaper to use local distributor for low volume items.”

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