Improved Supply Chain Management Promises 42% Hard Savings
on Externally-Sourced Printing

This article is the last in a series, designed to provide you with an overview of the issues and costs associated with enterprise document management. Parts one, two and three are available for your review.

Each year, U.S. businesses—healthcare organizations included—spend an estimated $100 billion on brochures, direct mail, annual reports and a wide array of other marketing, recruiting and business communications that are externally-sourced from traditional offset printers, high-end digital printers and specialty printers.

Though commercial printing represents the largest portion of an organization’s print spending, few healthcare systems have a full understanding of the total amount they spend on externally-sourced documents. Moreover, they have neither the reporting nor adequate controls in place to contain costs and manage their print supply chain effectively. 

Only in examining the nature and scope of externally-sourced printing across the enterprise along with the processes that support it can you begin to take control of spending and identify areas for process improvement.

Externally-Sourced Printing: Customized, Sophisticated
So why exactly do hospitals need an outside printer?  Though many hospitals have internal print shops, they often turn to commercial printers because their documents require sophisticated set-up, high-quality color and paper, and/or customized finishing.  By their very nature, they require specialized equipment and knowledge to design and produce. Building the capability to produce these documents in-house is simply cost prohibitive.

Marketing and recruiting literature make up the lion’s share of this externally-sourced printing. Historically, this type of document has been produced on traditional offset presses. They often require specialized graphic, printing and distribution services.  As a result, these documents have longer turnaround times, generally days or weeks. Over recent years, however, external printing has evolved to include a variety of high-end digital printing systems which offer opportunities for shortening the time to market and personalizing communications for greater effectiveness.

Healthcare providers also rely on commercial printers to produce complicated charting forms that are two and three panels wide, as well intensive care flow sheets, nursing care plans and other forms that may be 11” x17” or 11”x 25”.  Additionally, they look to external printers for their secure and sensitive documents, such as checks, certificates and prescription pads.

A Fragmented Process:
Limited Controls, Limited Expertise
For hospitals, this externally-sourced printing may be contracted under a print management program with a supplier or procured via a Group Purchasing Organization (GPO). However, the level of control over individual purchases varies widely.  Despite the fact that purchasing this kind of customized printing requires expertise, buying is fragmented.  It may be initiated by any number of areas -- marketing communications, the hospital’s foundation, human resources as well as some of the medical departments and satellite facilities.  If there’s a “mission-critical” document they need, it’s not uncommon to see staff members by-pass the central print supply chain function. 

With so many people involved in the buying process, few controls, and limited print-buying competency, the opportunity for mismanagement and cost overruns abound. The process is frequently driven by end users’ immediate needs with little regard for corporate standards, version control, alternative print technologies, or effective supply chain management.  They may look at the cost per printing a piece, but not consider the total costs associated with the document’s entire lifecycle.

A New Paradigm
By rethinking how these commercially-printed documents are created, managed and produced, healthcare organizations can address both the tactical deficiencies of printing them as well as the strategic opportunities that can be gained by improving supply chain management.  To that end, hospitals would be well-served by adopting these best practices:

1-Establish Centralized Responsibility
Externally-sourced documents are complex and expensive. Their procurement requires considerable expertise and a single point of accountability. By centralizing responsibility, documents can be managed more cohesively, enabling hospitals to maintain standardization and version control while assuring the availability of critical documents. Cost can be significantly reduced by reining in “rogue” printing and by utilizing best-in-class processes and technology. 

2-Move to High-Value, Low-Cost Documents
Evaluating the entire print supply chain unlocks savings that can be reinvested in activities and technology to improve mission-critical, healthcare documents.  With effective scanning, data capture and online EMR availability, hospitals can design hybrid paper/digital document systems that improve compliance, enhance patient care while reducing costs.  At the same time, savings can be applied to creating more compelling, personalized marketing and recruiting materials that effectively target recipients in a way that delivers higher responses.

3-Establish Business Rules to Drive Optimal Results
By establishing business rules to determine the most advantageous method of printing – or if a document should be delivered online instead—healthcare providers can reduce the total cost of ownership.  Coupled with appropriate measurement and reporting, rules-based routing helps you to make intelligent printing decisions and gain control over a process that has been highly fragmented and undisciplined.

4-Focus on Core Competencies
More and more hospitals have recognized they can’t be experts in every aspect of printing. By bringing in an outside expert into their enterprise, they have access to resources and process expertise on an on-demand basis.  By eliminating investments in staff, technology and process development, they’ve created a much more flexible document management environment.

Greater Control, Measurable Cost Reductions
Each healthcare organization, of course, is different. It takes a thorough examination of your organization’s entire print supply chain to identify potential areas for savings and process improvement, and then develop an integrated approach to print supply chain management that improves customer service, simplifies supplier management and exerts greater control over externally-sourced documents.

It’s worth the effort.  Experience has shown that organizations achieve hard dollar savings of 42% on average — sometimes as much as 72% — by optimizing the process of procuring commercial printing. Typically, half of that savings is derived from improved sourcing. The remaining savings is achieved through supply chain excellence.