Benchmarking in healthcare has been a common practice since 1985. It involves comparing an organization’s performance metrics to a standard developed using data from other similar organizations. Benchmarking in healthcare is used as a tactic to understand where an organization’s performance stands in comparison with its peers, and the scope for improvement. Forward-thinking strategy leaders look to industry benchmark data in order to map out where they want to take their service line, practice or institution in the future. By applying the multitude of data to the organization’s strategic plan for success, the employees will be more willing to commit to execution and it will be easier to track the results. This blog drills down the four common types of benchmarking in healthcare and the benefits of each.
Types of Benchmarking in Healthcare
It is done between departments, divisions, or offices within the same healthcare organization. This is particularly important because several healthcare companies have their branches in multiple locations and might want to examine a particular set of measures across those locations. For instance, a hospital administrator might want to know which of their facilities score a higher rating for overall patient satisfaction. Monitoring such parameters across branches of the organization will help shed light on issues that need to be addressed and also prompt specific branches to improve their processes or practices.
Comparing the organization’s performance with that of the competitors or other peers in the industry is referred to as competitive benchmarking. This is one of the common types of benchmarking in healthcare, where it is essential for organizations to examine their performance metrics against hospitals and clinics serving in the same geographic area. It might also prove beneficial to look at hospitals and clinics that serve a different market or are in a different geographic location. Healthcare organizations can use this data to learn from one another and further improve their processes.
Functional benchmarking is one of the modern types of benchmarking in healthcare where the organization’s performance is compared to those in a different industry that may have a similar metric or process that healthcare companies can learn from. Functional benchmarking in healthcare is a useful tool for examining operational data. (more…)
Medical gases are vital for the functioning of hospitals and other healthcare establishments. Medical gas systems in hospitals aid in the supply of piped oxygen, nitrogen, nitrous oxide, carbon dioxide, and medical air to recovery areas, operating rooms, and patient rooms. The gas flow is monitored by computerized alarm systems that alert hospital staffs in case of any anomalies. The growth in air pollution and changing climate are leading to an alarming increase in respiratory diseases such as asthma, TB, COPD, lung cancer, and pneumonia. This, in turn, is leading to an increase in the need for respiratory therapies, which is the key end-application for medical gases. Improving healthcare facilities, especially in regions such as APAC, MEA, and South America, is also leading to an increase in demand for medical gases for applications such as biological culture growth, medical equipment calibration, and diagnostic testing. (Source: Global Medical Gas Procurement Intelligence Report)
In the APAC region, the rise in income levels is expected to increase the demand for better healthcare facilities, which will, in turn, spike up the demand in the medical gas market. Furthermore, the rapid growth in industrialization and urbanization in this region is predicted to give rise to air pollution, which will drive the demand for improved respiratory health care. As a result, the medical gas market in the region is expected to experience growth. Most of the large, established suppliers in the medical gas market are based in North America and Europe, which is leading to a high supply influence from these regions.
Oil and gas form critical inputs for the medical gas market, where they are used as raw materials as well as to produce electricity. Natural gas is a critical raw material to produce gases such as carbon monoxide. The production process for gases such as oxygen and nitrogen require large quantities of electricity, and over 60% of the electricity consumed by suppliers is produced from fuels such as oil and natural gas. Hence, the rise in oil and gas prices will increase suppliers’ operating cost in the years to come. However, the increase in adoption of on-site gas generators can help control a drastic rise in prices. On-site gas generation offers benefits such as reliability of supply and control over the cost of gas produced. These factors are motivating buyers to prefer on-site gas generation plants.
Overview of the Medical Equipment Industry:
The durable medical equipment industry is one of the major segments of the healthcare sector that is driven by rapid technological innovations. The unprecedented growth in innovative and improved technologies has resulted in the development of state-of-the-art durable medical equipment, which has acted as a catalyst for the growth of the healthcare industry. The rapidly growing demand for home healthcare services is a major contributor to the growth of the global durable medical equipment market. Moreover, the exponential growth in home healthcare services is likely to grow in the coming years; thereby, facilitating the use of durable medical equipment.
The Business Challenge and Journey:
The client, a well-known durable medical equipment manufacturer, was looking at leveraging solutions for strategic sourcing. The client was facing issues related to the way spend information is gathered, analyzed, and factored into their procurement processes. Also, since the instability of their supply chain had increased their risks while conducting business operations, concerns were being raised on the continuity of service delivery operations. They were also looking at automating their business processes to enhance their overall efficiency.
Moreover, the company’s supply chain management executives recognized the tremendous scope in implementing strategic sourcing analysis to minimize the impact of supply chain risks on profitability. As such, they were looking at reducing the company’s risk profile by implementing strategies to maximize their financial gains. Strategic sourcing analysis forms an essential part of a supply chain governance system to ensure risks are identified in the entire value chain and mitigated to deliver financial goals.
To identify challenges in the supply chain activities, the strategic sourcing analysis experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the healthcare industry. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
Why should you leverage strategic sourcing analysis?
Strategic sourcing analysis follows a systematic approach that continually monitors and re-assesses the purchasing behavior of an organization. Several leading firms have a buying strategy in place that helps them identify their spending patterns, but many still lack the understanding of their data or a comprehensive strategic approach to sourcing. The benefits of strategic sourcing are not just limited to small cost savings. It also offers other non-financial advantages such a robust spend management capabilities.
Fundamental questions answered in this strategic sourcing analysis study include:
SpendEdge’s strategic sourcing analysis solutions offered relevant insights that helped the client to develop effective strategies to streamline their procurement processes. It also assisted the client in consolidating their purchasing power to secure the best value available in the marketplace. Moreover, the strategic sourcing analysis solution offered detailed insights that helped the durable medical devices manufacturer with the day-to-day management of the supply chain activities. Also, it assisted the client in gathering data to make better-informed decisions. It also enabled them to automate processes and take advantage of new opportunities and changing market factors.
Factors promoting the growth of durable medical equipment market include:
- Technology and product innovations: The rapid advances in technology have increased the dependence on medical equipment to assist healthcare service providers with diagnosis and treatment. Moreover, the improvements in healthcare services will facilitate the treatment of various diseases; thereby, attracting more investors in the durable medical equipment sector.
- Increasing competition: The entry of several private healthcare service providers in the healthcare industry spurs healthy competition for existing players and also offers several growth opportunities.
- New healthcare delivery models: There is an increasing focus on shifting care out of hospitals and into the community. Also, patient pathways are increasingly being modified with the help of powerful analytical tools to obtain better outcomes with lesser with lesser investments.
As the role of durable medical equipment in the practice of healthcare services is increasing, leading healthcare service providers are working on improving their product offerings through innovative designs and product offerings. Nevertheless, the adoption of new durable medical equipment continues to grow both in capability and numbers.
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Overview of the Healthcare Industry
The emergence of technically advanced prosthetic devices in the healthcare industry is expected to drive the growth of the global prosthetic devices market. The prosthetic devices market is currently experiencing a huge shift from conventional prosthetics to technologically advanced prosthetics. Also, the manufacturers of prosthetic devices are increasingly focusing on developing low-weight prosthetics by incorporating flexible polymers. Additionally, on the basis of technology the prosthetic devices market is divided into three segments, namely conventional, electric powered, and hybrid prosthetics. Among these, the electric powered prosthetic devices segment accounts for the highest revenue share of the market.
Let’s take a look at the key healthcare industry trends that are shaping the future of the global prosthetic devices market:
- Customization of prosthetic devices: Leading prosthetic device manufacturers are increasingly offering customized services to cater to the individual needs of the end-users. There is a higher preference for customized prosthetic devices in the healthcare industry as such devices provide a higher level of functionality when compared to the traditional devices.
- Innovations in prosthetic device technology: The prosthetic device market has experienced a steady innovation in terms of technology. This has resulted in the availability of advanced prosthetic devices that make use of low-temperature materials for manufacturing prosthetic devices.
Though several factors are favoring the growth of the global prosthetic devices market, there are a few challenges faced by players in this market space. To overcome the challenges, leading players are now leveraging strategic sourcing analysis to devise and implement better sourcing strategies.
The Business Challenge and Journey
The client a well-known prosthetic device manufacturing firm with several business units spread worldwide was looking at developing robust strategic sourcing analysis capabilities. Not surprisingly, the prosthetic device manufacturer found itself battling several problems common to organizations that employ acquisitions and mergers as a growth strategy.
Moreover, the company’s sourcing executives recognized the tremendous scope for streamlining their processes to achieve cost savings in indirect and MRP spend. As such, they were looking at reducing their overall sourcing costs by 15%. Also, since the company was operating using a semi-automated process to analyze its spend data, it had to compromise on the speed of data updates, efficiency, general accuracy, and analytic capabilities. For any organization of such size, this reduction would constitute a considerable sum—and it would go straight to the bottom line. With this in mind, the prosthetic device manufacturer approached the experts at SpendEdge to help them leverage the use of strategic sourcing analysis and implement strategies to enhance their supply chain performance.
To identify challenges in the supply chain activities, the strategic sourcing analysis experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the transportation services sector. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
Who should implement strategic sourcing?
SpendEdge’s strategic sourcing analysis offers end-to-end solutions that reduce the overall purchasing costs and enhance the value of supplier relationships. The adoption of strategic sourcing acts a guide for firms to devise standardized procurement processes. Hence it’s essential for every organization to use strategic sourcing principles to gain a better handle on its supply chain processes.
Furthermore, implementing the best practices of strategic sourcing provides an extra boost to increase the company’s profit margins. The goal is to look beyond daily price and delivery time challenges. Though strategic sourcing seems to be a complicated process, it helps you understand the relationship between your suppliers and your organization.
Fundamental questions answered in this strategic sourcing analysis study include:
SpendEdge’s strategic sourcing analysis engagement offered insights that helped the client to improve their sourcing practices. It also assisted the prosthetic device manufacturer to increase their business efficiency by formalizing the way spend information is gathered, analyzed, and factored into the procurement process. Moreover, the client was able to streamline their buying decisions and reduce procurement costs. Also, strategic sourcing facilitates the building of supply partnerships that are stable. Better supplier relationships eventually lead to improvements in quality, as suppliers and customers can work in tandem to measure the defect rates, as well as their cause.
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Overview of the Durable Medical Equipment Industry
Generally, durable medical equipment can be classified into monitoring and therapeutic devices, personal mobility devices, medical furniture, and bathroom safety devices. The personal mobility devices segment can be further segmented into crutches and canes, wheelchairs, and walkers. Similarly, the medical furniture can be further segmented into medical beds, stretchers, mattress, and lift chairs.
The prevalence of cancer, gynecological, ophthalmic, neurological conditions, and cardiac disorders is increasing every year. The treatment of these disorders requires surgical procedures, which increases the demand for surgical equipment; thus, resulting in the requirement of long-term care until recovery. In the case of long-term post-surgery care, durable medical equipment plays an essential role in the faster recovery of the patient. Rapidly growing demand for home healthcare industry services can also be attributed to the growing demand of this market.
However, our recent analysis of the medical devices industry shows that the durable medical equipment manufacturers are facing challenges in terms of:
- Cost of product development: The major challenge for durable medical equipment device manufacturers is to overcome the burgeoning cost of product development. Moreover, besides technology and government regulations, companies in the medical devices industry have to evaluate new products based on its price as against factors like patient experience.
- Localization of durable medical equipment devices: In the emerging markets, local durable medical equipment manufacturers are more successful when compared to their multinational counterparts. This is possible because the local players offer tailor-made products that are aimed at resolving the local needs and constraints. Moreover, the local durable medical equipment manufacturers often indulge in market research and leverage the benefits of local operations and a domestic sales force to bridge the gaps in the market.
Challenges such as this pose a major threat to companies operating in the medical devices industry. Supply market intelligence solutions help companies gain profound insights into the latest healthcare trends, developments, key risks, and recommendations on devising procurement best practices across the industry. These solutions also help companies reduce their procurement spends and offer superior product and service offerings.
The Business Challenge and Journey
The client, a leading player in the medical devices industry, specializing in manufacturing durable medical equipment was facing difficulties in managing their sourcing and procurement processes, which resulted in higher expenses. As a result, they wanted to gain a comprehensive understanding of the competitors, their products, suppliers, services, and spending patterns prevalent in the medical devices industry to cut down on their direct and indirect spends. Additionally, they also wanted to gain actionable insights on the strategies to develop a superior contract negotiation strategy.
SpendEdge’s supply market intelligence experts followed a comprehensive research methodology. The research approach included primary and secondary research coupled with qualitative and quantitative data collection procedures to help the client overcome their predicaments.
During the course of this supply market intelligence engagement, the durable medical equipment manufacturing client developed a long list of suppliers in terms of their business profile, revenue, and financial structure with the help of a robust SWOT analysis. This helped them gain an understanding of the supplier’s pricing and cost structure, which, in turn, helped them in devising a robust price model to evaluate competitors’ strategies. The engagement also helped the client cut down direct and indirect costs across their business units by establishing lean and centralized sourcing and procurement process.
Fundamental questions answered in this supply market intelligence engagement
With the help of SpendEdge’s supply market intelligence solution, the durable medical equipment manufacturing client identified the potential supply risks and enhanced their overall procurement and sourcing capability. This helped them achieve annual savings of $17 million.
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Due to the ever-increasing instances of chronic obstructive pulmonary disease (COPD) across the globe, offering promising healthcare solutions at a reduced price has become an indispensable task for COPD drugs manufacturers. Moreover, leading firms operating in the COPD drugs manufacturing space are forced to provide more dynamic and robust product offerings. As a result, leading COPD drugs manufacturers have started leveraging the use of cost benefit analysis. Additionally, cost benefit analysis help firms operating in the COPD drugs manufacturing space to meet the rising demand of the customers and reduce expenditures across the supply chain.
With years of experience in offering a wide array of similar solutions, SpendEdge’s cost benefit analysis experts help firm operating in the COPD drugs manufacturing space to gain a complete understanding of the cost structure for their supply chain activities. These solutions also help clients achieve a competitive edge over the peers by formulating superior negotiation strategies with suppliers in the industry space.
The Procurement Pain Point and Insights Offered
A leading COPD drugs manufacturing client with a considerable number of offices spread across the globe was facing predicaments in devising a low-cost mix model to cut down the overall sourcing and procurement costs across the supply chain. Moreover, the client wanted to gain actionable insights into the negotiation levers adopted by suppliers. Also, the client wanted to identify cost elements and assess its impact on the overall cost.
To cater to the specific predicaments faced by the COPD drugs manufacturing client and help them assess the cost structure across the supply chain, the cost benefit analysis experts at SpendEdge tailored an integrated research methodology, which included primary and secondary research coupled with quantitative and qualitative data collection methodologies.
During the course of the cost benefit analysis engagement, the COPD drugs manufacturing client was able to gauge the impact of individually cost driver on the overall spends and forecast the cost movements across the supply chain. Additionally, the client was able to devise low-cost mix model which helped them cut down the overall sourcing and procurement cost.
Vital questions answered in this cost benefit analysis study include
The cost benefit analysis engagement helped the COPD drugs manufacturing client gain profound and actionable insights into the cost structure of their sourcing and procurement processes. This enabled them to devise superior negotiation strategies with their suppliers and consequently reduced the overall costs.
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The medical device industry is regarded as one of the primary industries in healthcare, driven by innovation and new technologies. Over the last decade, this industry has seen an extraordinary growth in innovative and improved technologies. This has led to the development of state-of-the-art medical devices and has resulted in major advancements in the healthcare industry. However, delivering value in this current dynamic healthcare environment requires an understanding of a broad set of relationships, partnerships, and joint venture initiatives. Consequently, to establish themselves in this market space, many medical device manufacturing firms have started opting for industry best practices studies to gain insights into the global category management structure and a list of talent with varied skill sets.
The Procurement Pain Point and Insights Offered
A leading medical device manufacturing firm wanted to transform its procurement function with the primary goal of becoming a lean, best-in-class, scalable, and efficient procurement organization to lay down a strong foundation for improved efficiency gains and double-digit procurement savings. The client also wanted to identify a list of key competitor companies and their key suppliers. Furthermore, they wanted suggestions on the best-in-class sourcing and procurement strategies.
To address the client specific business challenges, the industry best practices specialists at SpendEdge followed a blended research methodology consisting of primary and secondary research coupled with qualitative and quantitative data collection methodologies. With the help of our industry best practices study, the client could identify the key drivers for this procurement transformation project, including organization design, people, process, optimization, and technology. Additionally, the client was provided with all necessary information to understand the existing position, responsibilities, and essential competencies.
Key questions answered in this competitive pricing study include
The industry best practices study helped the client identify the best practices followed by the competitor’s companies and their suppliers. Additionally, the client could identify the inefficient and unproductive processes across platforms and discard them. Furthermore, SpendEdge’s industry best practices study also helped the client gain insights on the best-in-class metrics and strategies to measure process efficiencies and effectiveness.
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The latest procurement market intelligence study by SpendEdge on the consulting sector helps companies in the pharmaceutical and healthcare industries to gain comprehensive insights into the supply market, strategic sourcing, pricing, and procurement strategies specific to the consulting category.
Understanding the consulting industry
Consulting services have taken over the healthcare market by storm. The ever-changing market dynamics, outsourcing trends, and price levels require the consultancy firms to offer a thorough understanding of the industry. With digitization striking every industry, the consulting services sector should develop agile transformation and adopt new delivery approaches to provide end-to-end customer experience, data visualization, and implement process automation. Some of the best practices trending in the healthcare and pharma sector revolve around category management tactics and recommendations based on category strategy implementation.
The increasing focus on technological developments and the introduction of artificial intelligence (AI), virtual reality (VR), and wearable technologies are revolutionizing the healthcare market. The need for consulting services is more than ever in the healthcare industry, and various firms are offering a wide range of specialty services to sustain the competition. Furthermore, the companies offering cloud services, compliance related consulting, and big data or data analytics consulting will attract more consumers in the global market.
Outsourcing opportunities to increase
The global trend of outsourcing various functionalities to offshore business units will increase the demand for consultancy services in the global market. Many businesses are outsourcing their functions to APAC as the region offers high technical and analytical skill personnel. Labor cost savings, efficiency through business process redesign, and access to qualified employees are considered important parameters for global outsourcing.
Multi-sourcing is the new way
The increasing competition is compelling companies to hire multiple consultancies on one project to promote better strategic decisions. Multi-sourcing designs business models through cloud data centers and pooled infrastructure that offers value, innovation, and flexibility to its customers. These projects benefit from well-informed decision making and specialized solutions offered by consultants that have specific niches.
What solutions SpendEdge offer to businesses
The team of procurement experts at SpendEdge provide a market intelligence study that meets requirements, specific to the needs of the business and also offer opportunity assessment of the consulting industry over the next few years. The solutions offered includes:
- Market insights that follow a blended approach of primary and secondary research that are specific to the consulting category
- Detailed data analysis and development of category-specific insights
- Understand the different types of consulting services, including legal, quality, finance, and strategic consulting
- Analysis of the global market that includes segments, trends, drivers, and challenges
- Assessment of the current outsourcing trends, pricing models, procurement best practices, and strategies
- Identify the current and future market opportunities
Read our complete case study titled – Procurement Market Intelligence Study on the Consulting Sector
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- Supply Chain Risk Assessment for a Leading Technology Company Helps Optimize Sourcing Destinations and Suppliers
- Assessment of the Supplier Landscape and Should-cost Analysis for Tank Cleaning Services
- Procurement Market Intelligence Study on the Best Practices for Managing Company Cars
For any queries, reach us at – email@example.com
The Procurement Pain Point
With a keen eye on identifying the best procurement practices and future market opportunities, the client – a leading a pharmaceutical company that discovers, develops, and markets both biopharmaceuticals and small molecule drugs – approached SpendEdge to engage in a procurement market intelligence study that would help them gain effective insights into the consulting sector. The procurement intelligence engagement also helped the client gain comprehensive insights into the supply market, strategic sourcing, pricing, and procurement strategies specific to the consulting category.
The primary objective of this procurement market intelligence engagement was to help the client gain a detailed understanding of the market dynamics, outsourcing trends, price levels in the market, best practices around category management strategies, and develop recommendations based on category strategy implementation.
To meet the specific category requirements of market-leading companies in the consulting sector, SpendEdge’s experienced procurement market intelligence team tracked latest developments and procurement trends in the market through secondary journals and reached out to key stakeholders, thought leaders, end users of consulting services, procurement experts to understand their views on the market. Our procurement market intelligence specialists also spoke to key stakeholders to understand how the consulting services market would grow in the short and long term to validate the market size and procurement market intelligence model developed for this industry.
Procurement Insights Offered and the Outcome
To address the various procurement market intelligence requirements specific to the client’s needs, we deployed a dedicated team of sourcing and procurement analysts working under a project manager with significant experience in conducting and managing similar procurement market intelligence studies specific to the consulting category. The insights offered followed a blended approach of primary and secondary research followed by data analysis and category specific insights development.
In just four weeks, the client – a leading pharmaceutical company – was able to gain a better understanding of the different types of consulting services, including legal, quality, finance, strategic consulting. The procurement market intelligence service offered by our team also helped the global client understand the global market landscape by analyzing the market segments, trends, drivers, and challenges. Additionally, an assessment of the current outsourcing trends, pricing models, procurement best practices, and strategies was also offered to help the client identify current and future market opportunities.
Some of the additional questions answered by our procurement market intelligence study includes
- What are the best practices followed by industry peers specific to consulting services procurement?
- What are the typical short, middle, and long term goals and what are their key benefits?
- What are the key priorities considered for optimization of consulting services procurement?
- How to prioritize action plans?
- What are the key contracting and engagement best practices followed by peer group companies?
- What are the key strategies implemented for cost savings and supplier consolidation?
This case study offers information on how our procurement market intelligence study helped a global pharmaceutical client understand the market space for the consulting sector better.
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