Supplier Relationship Management Should be a Healthcare Best Practice too!

We don’t hear a lot of supply chain professionals talking about “supplier relationship management” as an emerging best practice in healthcare, but it is a best practice in every other industry. So, what’s up with that?

Industry has found early on that price is only one component of the “best value” equation with their suppliers. It is equally important to industrial supply chain managers that:

  1. They become their supplier’s customer of choice, ensure product availability, cost monitoring, technology access, innovation and risk reduction.
  2. They promote emphasis on “value” versus price so that they can bend the curve on their supply expenses from acquisition to disposition on their products, services and technologies.
  3. They leverage supply network capabilities to assist in the redesign of their current products, services and technologies to enable them to be more cost effective, reliable and defect free.
  4. They capture supplier value early in new product, service and technology development to improve the speed, efficiency, quality and pricing of the end product.

This is a whole new way of thinking about your suppliers that requires new strategies, tactics and techniques to ensure that your suppliers are true (not just in word, but in fact) partners in your supply chain success. It means developing close, effective and significant working relationships with your suppliers that go beyond price to bring about value-added partnerships to your healthcare organization.

For example, one of our clients is working closely with his suppliers to re-specify and then reinvent his I.V. catheters’ functional specifications that are now extremely feature rich, and then getting their input along the way. Instead of telling his suppliers what he wants he is getting their input, which hasn’t been the traditional way of doing business in healthcare.

Is this really an emerging healthcare best practice? Our bet is that it is, since suppliers know where to save money, trim fat and eliminate waste in your healthcare organization if you would just create a healthy relationship with them. You need a relationship where they become real partners, and not kept at arm’s length. Keep them close, active and productive in all of your supply chain initiatives to sustain your supply chain savings.

Think of it this way – most of our best healthcare supply chain ideas have come from industry, so don’t ignore this opportunity to be a trailblazer with your own “supplier relationship management” program that can provide substantial dividends to your healthcare organization now and in the future.

About the Author

Robert T. Yokl
Robert T. Yokl is president and chief value strategist of Strategic Value Analysis® In Healthcare, which is the acknowledged healthcare authority in value analysis and utilization management. Yokl has nearly 38 years of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the new Utilizer® Dashboard that moves beyond price for even deeper and broader utilization savings. For more information, visit For questions or comments, e-mail Yokl at
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