The real cost of consumables procurement is bigger than dollars and cents, and it affects your whole facility.
What won’t work on this cost:
- drilling down into a spreadsheet
- negotiating with your consumables supplier
- purchasing in big order quantities
Traditional purchasing philosophies could be limiting your cost analyses. Here’s one significant cost factor you could be overlooking.
The Cost of Time
The biggest cost to your aged care facility is not the money, it’s the time your procurement is taking up.
You’re busy, your floor staff are busy, your facility managers are hectic – and you know it affects your decision-making and leadership.
You know your nurses would deliver better direct care with more time to do it.
Why does everyone have no spare time?
Read on to find out.
The Case Study
We interviewed Alex*, the procurement officer at a multi-site nursing home group in Sydney.
Alex and his colleagues were always ‘time-poor’, and all the processes that management put in place weren’t working. So he decided to do something different.
Alex worked a day of ordering hygiene consumables stock.
What did he find? Ten touchpoints (creating time costs) in his nursing home’s ordering process.
Ten Touchpoints of Consumable Orders
1. The Stock Take
2. The Purchase Order
3. The Approval
4. The Order
5. The Order Confirmation
6. The Delivery
7. The Distribution
8. The Restocking
9. The Paperwork
10. The Payment
Let’s dive in from the start.
Adding Up the Time Cost
Alex and his team had spent 3 hours and 15 minutes in consumables procurement. Far more than the half hour he would have expected!
Those 3 and ¼ hours were taken from direct care time, business development and other important responsibilities.
A normal order could take still more time because of:
- the different people doing it
- the time taken in communication
- the mistakes made by busy people.
The industry average for aged care facilities is 1 hour and 15 minutes spent on ordering hygiene consumables.*
Focusing on the time you spend in your procurement processes will give you back more value than a unit cost analysis ever could.
What if your facility is losing hours of direct care time?
What if your staff are overworked because of an inefficient ordering process?
Do you know your time costs?
*Based on audits conducted in facilities across NSW & QLD.