Consignment purchasing saves money, improves cash flow, streamlines material management function.

Abstract

The responsibility of materials managers has grown tremendously in the past few years as cost containment has become a top priority. Today materials managers are responsible not only for seeing that supplies are on hand, but also for contributing to the hospital's cost savings efforts. For Southeastern General, those goals were met through consignment purchasing. In fact, the ACCESS consignment program enabled the hospital to increase its linen inventory by three times the amount it had previously carried. Whereas Southeastern General's materials management department used to be caught with stockouts at the unpredictability of an antiquated laundry system, it is now the most reliable hospital in the area. It maintains a fully stocked inventory and is prepared for the unexpected. For example, many of the small hospitals in the region will borrow from Southeastern General when they are confronted with an immediate inventory crisis rather than wait the standard 15 to 30 days for shipment from suppliers. In this circumstance, Southeastern General provides the other hospitals with materials from its inventory and Medline bills the other hospitals directly for supplies used. Overall, Southeastern General has benefited from consignment through elimination of stockouts, price stability, improved cash flow, and time and labor savings. Above all, savings through the use of consignment directly impacts the hospital's bottom line.