1. Purchaser / supplier global relations: what do buyers expect?
Megan Main
Chief Executive
Health Purchasing Victoria
4 November 2014

2. What do buyers expect? The basics: “one way” expectations
Honesty and fairness in dealings
Fair value / price
Adherence to policy, contract terms
Compliance with standards
GS1 compliance
But there’s more!
Health Purchasing Victoria | Achieving best-value supply chain outcomes for Victoria’s health sector

3. Price savings alone are NOT sufficient
Easier To
See
Price
Process Cost
Sourcing Cost
Evaluation/
Order Mgmt
Returns Mgmt
Logistics Mgmt
Supplier Mgmt
Recall Mgmt
Compliance Mgmt
Training
Payment Mgmt
Inspection
Utilization Cost
Standardization
Demand Mgmt
Labour Productivity
Maintenance
Shrinkage
Damages
Waste
Disposal
Recall Mgmt
Revision Procedures
Infection Rates
Etc.
Total Cost of Ownership
We need to address drivers of cost.
Harder To
See 3 3

4. We must work together to reduce cost
TOTAL COST
Hospital Cost
Supply Chain Cost (Hospital)
Order Processing
Inventory
PURCHASE PRICE
Transport
Supplier Cost
Supply Chain Cost (Supplier)
Profit
Sales
Selling Cost
Product Cost
Research,
Manufacturing, Packaging, etc
Benefits through automation & economies of scale

5. Think and act as a system
Integrated supply chain processes
Goods & Services
SUPPLIER
NETWORK P A T I E N S
SUPPLY CHAIN
PROCESSES
CLINICAL CARE
NETWORK
Category Management
Contract Management
P2P
Logistics Management
Materials &
Inventory Mgt
Source
Buy
Supplier Relationship Management
Customer Relationship Management
Deliver 5

6. Buyer - Supplier collaboration
Nirvana
Supplier Performance Management
Value
“75% of sourcing savings can be lost within 18 months without SRM” - Geller & Company Survey
Lost Value
Contract Start Date
No Supplier Relationship Management Program
Time 6