The Parkview Health Distribution Center decided to move away from its primary inbound vendor, which would also negatively impact access to its outbound transportation vendor. Proposals offered by other vendors to replace the outbound transportation service would result in a cost increase detrimental to the savings to be experienced by the new inbound distribution provider.
The facility decided that providing its own outbound service with its own vehicles would be the resolution to the cost impact while still offering potential for growth and providing a dynamic example that the Health System is able to sustain itself. Insourcing could also develop opportunities and synergy with other departments such as Records Management, Print/Postal and Information Services.
Although Parkview Health Distribution Center had intended only to minimize a cost increase, they actually experienced a substantial decrease in cost. In addition, the change allowed them to increase levels to their various service lines. The insourcing has resulted in a cost reduction of $3,780 per month, more than $45,000 annually. In addition, the visibility of the trucks in the community raises public awareness and promotes Parkview Health’s ability and willingness to employ their own, rather than outsource.
ABOUT PARKVIEW HEALTH – SUPPLY CHAIN
Parkview Health is northeast Indiana’s largest healthcare provider, consisting of eight hospitals and a physicians group with more than 500 providers. With more than 9,700 employees serving a population of 820,000, the not-for-profit health system’s mission is to improve the health and well-being of the communities it serves.