7 Steps to Healthcare Purchase Order Perfection

Step 1. Leverage Technology

  • Build your system foundation and capabilities.
  • Deploy a materials management information system.
  • Use a healthcare-specific design for a continuum-of-care and for procurement, pricing, item management, reporting and analytics.

Step 2. Create Electronic Purchase Orders

  • Use a purchase order for everything.
  • Capture spend, build visibility and improve purchase reporting.
  • Include all medical-surgical units, capital, maintenance and service agreements.
  • Exclude utility costs and expenses for travel and entertainment.

Step 3. Build an Approved Formulary

  • Gain control of purchasing for centralized or multifacility ordering.
  • Create an approved, standardized product formulary.
  • Benefit from better contract negotiations, higher quality, spend and product consistency, order and spend visibility, and a streamlined user experience.

Step 4. Leverage Data for Automation

  • Maximize contract performance by ensuring the right price and right contract.
  • Manage all spend through purchase orders to align with available contracts.
  • Target the highest possible electronic data interchange for enhanced automation.
  • Use data and reporting tools for better visibility into procurement, and create a purchase order “food chain.”

Step 5. Create a Purchase Order Process

  • Give users the proper security, roles and responsibilities. 
  • Create a process to make and approve changes to purchase orders.

Step 6. Build Classification Coding

  • Establish general ledger classification coding.
  • Access rich spend data by classifying spend by budget codes.

Step 7. Track Returns

  • Create a return purchase order.
  • Track return of the item to the supplier and ensure the appropriate credit.

Measure vendor performance by tracking on-time shipment rates, backorder and fill rates, and data capabilities.

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