Is Everybody Ready?

Edition: August 2001 - Vol 9 Number 08
Article#: 1032
Author: Mark Thill

Do You Spend:

13% of your time on status checks and expediting?

11% of your time dealing with contract updates, eligibility and pricing?

10% preparing reports for customers?

10% reconciling backorders?

7% handling new products inquiries?

6% resolving errors and processing returns

24% traveling?

5% on “miscellaneous” activities?

14% on sales calls?

The Andersen report, ''The Value of e-Commerce in the Healthcare Supply Chain,'' prepared for Novation and Neoforma, says you do, if you're a typical distributor sales rep.

The study's authors based their numbers on 100 interviews and process observations among 12 supply chain sites, including manufacturers, distributors and providers.

What grabs me is the 14 percent of time spent on sales calls. Of course, in a report designed to quantify the value of e-commerce, one might expect the numbers to go somewhere in that direction.

Still, Andersen makes a good point – that reps and their companies could open up more time for sales calls by implementing e-commerce. This technology could help them cut the amount of time they spend on the first six activities listed above.

By ''e-commerce,'' Andersen means more than just electronic procurement of goods. Rather, they're talking about common pricing databases, real-time access to pricing and GPO eligibility, etc. It's all about electronically sharing information among the key supply chain players.

The study's authors paint an optimistic picture of a future with e-commerce. Here's what they conclude:

''By implementing a Web-based electronic tool to address the problem with contract pricing, back orders and substitutions, the sales representatives can focus on solution selling. By helping the customer identify opportunities to convert products from direct to distributed purchase, products to standardize, outsourcing distribution functions and other areas, the distributor increases revenue and drives cost out of the transaction for the provider. The greater the time that can be eliminated from problem-resolution activities, the more time will be available for the sales rep to refocus his or her efforts on incremental sales to existing customers.''

The bottom line: ''Sales personnel could generate incremental revenue with existing customers of up to 6 percent of current sales.''

Again, skeptics could dispute the numbers. But can you really dispute that we'd all be better off if everyone got on the ball?

The question is, How do we get there from here?

The health care supply chain is like a bee's nest. Lots of activities, but everyone's buzzing off in different directions. Can we all work together to achieve this vision for the future?

I credit Wayne Kay and HIDA for working so hard to muster support and energy for the Efficient Healthcare Consumer Response. Maybe it was just too big – like President Clinton's massive, comprehensive health care reform plan in the early 90s.

So, maybe we've learned there's no cookbook approach to greater efficiencies. Maybe we can get there in little steps. Maybe we can get started now.