What's the silver bullet for supply chain management? Z5 Inventory's CEO knows

A dedicated supply chain manager can make a huge difference for an ASC's bottom line, according to Z5 Inventory CEO Carl Natenstedt.

Mr. Natenstedt told Becker's ASC Review where he sees pitfalls for physician-owned ASCs and how centers can sidestep them.

Note: Responses have been lightly edited for style.

Question: What are the key differences between ASCs and hospitals when it comes to equipment selection and purchasing? How do these differences pose unique challenges?

Carl Natenstedt: In a hospital, the owners are usually businesspeople. Even if it's the public or the government, they're going to the trouble of hiring management that has business experience. In an ASC, the owners are usually doctors. While doctors are dialed into medical advancements and patient needs, what parts of the business are slipping through the cracks?

Let's look at an example I've witnessed personally. A very small ASC buys two da Vinci robots that are $10 million apiece because a doctor wanted to focus the ASC on procedures that required them. Of course, the ASC ends up not using them most days, and eventually, the physician leaves. Now the company is saddled with them. What's worse: they probably got the equipment at whatever financing the supplier offered, since they didn't have the power to negotiate anything better. What should have been an asset has turned into a massive liability.

So how does an ASC avoid that? Dedicating someone who has a specialty in supply chain to handle the supply chain. As soon as someone is spending all their time focused on improving the system, the system improves. It's like magic.

Q: What are the most common mistakes ASCs make when it comes to inventory management?

CN: Because ASCs are often physician-owned, they're particularly susceptible to physician influence over the business's buying habits. No value analysis committee or purchasing group means no red tape. And manufacturers are taking advantage of that. They're able to target a single decision-maker because often there is just one.

It's easier for a single person who has been sold on a particular brand or model to force the entire ASC to switch its standard, which, of course, exposes them to excess and obsolete products. The more than $700 billion of medical product that goes to waste every year isn't limited to hospitals. But most ASCs won't pay attention to that or even know it, because the supply chain is seen as an ancillary priority. It's the second half of an already overworked employee's job, instead of the focus of someone with a fair amount of expertise. No one's looking at how much impact this has on the bottom line.

More articles on supply chain:
ASC supply chain tip of the day: Communicate supply chain goals
Digital Surgery launches 'satellite navigation' platform for ORs, surgery centers
Intuitive Surgical aims to tap into hospital, surgery center device data with partnership: 5 takeaways

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