At Procurify, we’re fascinated with how different industries and sectors handle their purchasing and procurements functions.
As we’ve learnt from both our valued clients and industry experts, there are as many different methods to handle one’s procurement process as there are different types of businesses.
To shed more light on that varied realm, we caught up with Mohammed Siddiqui, purchasing coordinator for Emerus Emergency Hospitals in Houston, Texas, to learn more about purchasing, procurement, and strong healthcare supply chains.
Here’s what he had to say:
Q) Let’s start off simply – can you tell us about your professional history and a bit about your employer?
A) Sure. As you know, I work in the purchasing industry. In fact, I’ve been working in the industry long before I even knew what I was doing. As a kid, my parents owned a pet store and I did all the purchasing and handled the logistics of transporting aquatic life – plants and all that – from overseas to us. So, that was both negotiating to keep prices down and trying to keep everything we ordered alive!
It was funny because I really had no idea what I was doing – I just fell into it. Later I went to college for logistics and supply chain management and got a job with a chain of hospitals. We have 16 micro-hospitals (emergency hospitals) now and I handle the purchasing of medical supplies, office supplies, equipment, dietary – everything. I have two co-workers and I’ve been at this for nearly four years now.
Q) What is the size and scope of your purchasing responsibilities?
A) On a monthly basis, we are doing about US$27,000 per hospital. So, across 16 hospitals you’re looking at about almost US$450,000 per month in purchasing. That includes everything from medical supplies (needles, gauze etc.) to paper, pens and frozen meals. It really includes everything that is needed to run a hospital from the ground up.
Repairs and maintenance, of course, falls on our department as well. So, if a CT Scan breaks down, for instance, we have to coordinate its repair.
Q) Can you elaborate on the importance of a strong supply chain in the healthcare industry? Is it more critical because the health of your patients depends on those supplies?
A) I cannot express the importance of this enough. Let’s use oxygen, for example. Oxygen is something that is very regulated because it is so flammable. So, if you have a certain area where you keep your oxygen tanks, it can only fit a certain amount of tanks. The difficulty is, you have to keep that full and most oxygen companies will only come out twice per week and there are no emergency trips. So, that is something that is constantly monitored.
Now, if you get between orders and you’re out – you literally have to close down your hospital. And, of course, that’s when you get in the news and everyone in the purchasing department loses their jobs real quick. It is super, super important that everything is stocked and on hand. Making sure everything is on hand boils down to the software you are using in your supply chain to make it run smoothly and keep your supply chain going. One person, on their own, cannot monitor everything in the hospital. That software is key and having eyes and ears at every facility.
Q) What changes have you seen in the industry? Are you noticing any particular trends that interest you?
A) The ability to track and analyze data just keeps continuing to grow. I think everything is becoming a lot more automated – not that people are going to be replaced, because that can never happen completely. People are needed, for instance, to negotiate and that will always be important.
But how we use our computers and software will continue to evolve. Previously, everything was done by hand. Then, it became a place where we just stored data. Now, everything is becoming intuitive. I no longer have to spend 10 minutes doing something that should take me only a couple of minutes. Software is now taking care of that time. And, it allows purchasers to spend more time analyzing that data. It is really exciting.
Q) What are your thoughts on procurement’s evolution towards the executive or boardroom level in an organization?
A) It’s huge. When I first started, a buyer was almost seen as a B-Grade celebrity – your necessary but you’re never going to be big. In those days, you were just the guy that spends the money.
Now, there are people from our field moving up to CFO and other positions, and people are starting to realize how important our department is. I think it’s very important for CFO and others to understand and respect what the purchasing department does. Of course, this knowledge works both ways – the purchasing department needs to understand that there are standards you have to meet. So, when the CFO comes and needs to you to find savings it is very important to be able to know where to cut. That communication is huge. It wasn’t always there in the past, but now it is and it makes the job a lot easier and it makes the opportunity for companies to find profit a lot greater.
Q) So, we’ve established that the purchasing function is a very complex, layered process. Do you have any final thoughts on that issue?
A) I would describe the whole process as organized chaos. In its simples form, you are buying things. And, once you buy things, you get invoiced, you verify you received what you wanted and you send everything off to accounting so it gets paid.
In between all of that, however, there are day-to-day stuff that always, always comes up. There is always someone trying to offer you something for cheaper than you are currently getting it for. There is always someone offering a more expensive product, but of a higher quality. So, as I said earlier, research and communication becomes critical. So, it is never just buying something and being done with it. You have to understand everything you buy, If you don’t understand what you are buying, you never know what someone will bring back. For instance, they won’t know the quality, specs or how long something will last. You have to thoroughly understand everything you order.