A recent study by the Institute for Supply Management and University of Houston C.T. Bauer College of Business showed that most profit and non-profit organizations claim that the speed, flexibility, and quality of their contract services increased when using external sourcing instead of sourcing the same service internally. This then saved money and improved the overall performance of the function or service under contract. This was also my experience when I oversaw outsourced departments, functions, and services, such as, housekeeping, laundry, and engineering in my career as a supply chain manager or vice president of support services.
The Case for Outsourcing More Supply Chain Functions or Services
If you believe this ISM & UOH’s survey results, as I do, then you should consider outsourcing many more supply chain functions or services than you are now to greatly improve your supply chain cost and department’s overall operational performance. The easiest way to make this outsourcing decision is to first define what supply chain functions or services are mission critical (i.e., any function or service whose failure or disruption will cause a failure in your hospital, system, or IDN’s operations). What are left over after this exercise are good candidates to consider for outsourcing. Here’s another easy test to help you with this decision.
Hurricanes Harvey and Irma Are Good Test Cases for Outsourcing
If you were a hospital, system, or IDN affected by Hurricane Harvey or Hurricane Irma, you wouldn’t be concerned with continuing your regular mail delivery, printing, copying, recycling, or record storage functions, would you? But you would be worried about disruptions in your supply, processing, and distribution functions that are mission critical for your healthcare organization’s success. Remember, without these three activities everything (e.g., procedures, operations, tests, etc.) in your healthcare organization stops. Now, do you have a better idea on what can be outsourced in your supply chain department for greater speed, flexibility, and quality?