The Complexities of Senior Living Procurement 

Procurement in Senior Living is uniquely challenging due to the operational structure and external pressures on the industry. Below are key obstacles organizations face: 

• Fragmented Procurement Across Locations
  Managing procurement for multiple locations often results in inefficiencies and compliance issues. With each location operating independently, organizations miss out on opportunities to enforce consistent workflows and secure bulk discounts.  
• Staffing Shortages Impacting Efficiency
  The ongoing staffing crisis in Senior Living is a challenge for procurement teams. According to the National Investment Center for Seniors Housing & Care, 82% of Senior Living operators report struggling with staffing shortages, and 29% attribute this to high turnover rates. Reduced staffing levels leave procurement teams overburdened, with little time for strategic planning . 
• Escalating Costs Across the Board
  Rising costs in healthcare and Senior Living present a growing burden. Since 2000, the cost of medical care, including equipment, services, and wages, has surged by 121.3%, compared to an 86.1% increase in overall consumer prices . In 2024 alone, medical care costs rose by 3.3%, outpacing overall inflation rates. Procurement teams must find creative ways to mitigate these cost pressures without compromising quality or resident satisfaction. 
• Lack of Visibility into Spending
  Limited visibility into spending data exacerbates inefficiencies and increases the risk of rogue spending. Research from Deloitte reveals that 65% of procurement leaders have little to no visibility beyond their first-tier suppliers, leading to missed savings opportunities and difficulty managing compliance . 
• Barriers to Technology Adoption
  While 66.7% of Senior Living providers recognize technology as a priority, only 9% currently use AI-driven tools for procurement. This technology gap limits their ability to streamline processes and uncover savings opportunities. 

How to Improve Senior Living Procurement Efficiency 

To overcome these challenges, Senior Living organizations can adopt strategic, data-driven approaches to procurement. Here are the most effective strategies: 

• Centralize Procurement Activities 
  Standardizing procurement across locations enhances consistency, improves compliance and enables cost savings through aggregated purchasing. By leveraging centralized platforms, organizations gain better oversight and streamline vendor relationships.  

• Leverage Automation and AI 
  Automation reduces the administrative burden of manual tasks, such as approvals and spend reporting. AI-powered tools provide data-driven insights by analyzing purchasing trends and recommending cost-effective alternatives. Predictive analytics help procurement teams forecast inventory needs and avoid overordering or stockouts, leading to more efficient planning. 

• Increase Spend Visibility 
  Procurement leaders who lack visibility into spending often encounter rogue purchases and fragmented data. Implementing tools that provide real-time reporting ensures teams can identify non-compliance, uncover savings opportunities and make informed decisions. According to research from the Chartered Institute of Procurement & Supply, rogue buying accounts for up to 80% of invoices, even in organizations with dedicated procurement departments. 

• Foster Vendor Collaboration 
  Moving beyond transactional relationships with vendors creates opportunities for shared goals, such as cost reduction and quality improvement. Regular performance reviews, audits, and well-defined KPIs such as on-time delivery and pricing compliance, help ensure vendors meet expectations while strengthening long-term partnerships. 

• Address Rising Costs Strategically 
  Organizations can mitigate rising operational costs by negotiating long-term contracts with price locks, diversifying suppliers to reduce risks and leveraging bulk purchasing power. Monitoring regulatory changes, such as staffing mandates, helps procurement teams anticipate and manage financial pressures. 

• Invest in Staff Training 
  Training procurement teams ensures they can maximize the value of technology tools, negotiate effectively, and implement strategic purchasing practices. Well-trained staff are better equipped to handle the complexities of Senior Living procurement and drive efficiencies across the organization. 

Leveraging Procurement Technology for Long-Term Success 

In today’s competitive and resource-constrained Senior Living industry, technology is no longer a “nice-to-have”—it’s a necessity. Senior Living procurement processes that rely on outdated, manual workflows are not only inefficient but also prone to errors and missed opportunities. Technology-driven solutions revolutionize how procurement teams operate, offering unparalleled transparency, efficiency, and control. 

Why Technology Matters 

Procurement in Senior Living is more complex than ever. Rising costs, staff shortages, and increasing regulatory requirements create an urgent need for streamlined and strategic operations. Technology empowers procurement teams to overcome these challenges by providing tools that enhance visibility, reduce manual tasks, and drive data-driven decision-making. Organizations that fail to adopt modern procurement technology risk falling behind their peers in cost control, vendor management, and compliance. 

Key Features of Technology-Driven Senior Living Procurement Platforms 

2. AI-Powered Recommendations 

Artificial intelligence (AI) analyzes historical purchasing patterns, vendor performance and market trends to recommend personalized cost-saving opportunities

Benefits for Senior Living Procurement: 

• Smarter, faster purchasing decisions based on real-time data. 

• Identification of high-performing vendors and cost-effective alternatives. 

• Improved inventory management with predictive analytics to prevent overordering or stockouts. 

3. Predictive Analytics for Strategic Planning 

Predictive analytics leverage historical and real-time data to forecast future needs. This proactive approach helps procurement teams prepare for supply chain disruptions, avoid stockouts and optimize order timing.

Benefits for Senior Living Procurement: 

• Anticipate demand fluctuations to minimize wasted spend. 

• Strengthen supply chain resilience by identifying risks before they impact operations. 

• Enhance budgeting and planning accuracy with data-backed forecasts. 

4. Automated Approval Workflows 

Platforms streamline manual processes by automating purchase requests, approval thresholds and notifications. This eliminates bottlenecks, reduces human error and speeds up procurement timelines. 

Benefits for Senior Living Procurement: 

• Faster approvals reduce delays in essential purchases. 

• Error reduction through standardized and customizable workflows. 

• Frees up staff to focus on higher-value and more strategic tasks. 

5. Spend Visibility and Compliance Monitoring 

Technology enables centralized tracking of all procurement activities, ensuring compliance with preferred vendor agreements, negotiated pricing, and corporate policies. Rogue spending and off-contract purchases can be quickly identified and addressed. 

Benefits for Senior Living Procurement: 

• Improved compliance with negotiated contracts for maximum savings. 
• Reduced rogue spending and enforcement of preferred supplier agreements. 
• Streamlined audit preparation with complete records of procurement activities. 

6. Integration with Multiple Systems 

Many modern procurement platforms integrate seamlessly with ERP, financial and operational systems. This ensures data consistency, reduces duplications and creates a unified performance view . 

Benefits for Senior Living Procurement: 

• Greater alignment between procurement, finance, and operations teams. 

• Simplified reporting for leadership and regulatory compliance. 

• Enhanced decision-making with holistic data insights. 

The Tangible Impact of Technology 

Organizations that adopt technology solutions for procurement see measurable benefits, including: 

• Cost Savings: AI-powered tools and bulk purchasing strategies consistently deliver cost reductions across high-spend categories. 

• Efficiency Gains: Automation and streamlined workflows reduce administrative burdens, freeing up staff to focus on strategic initiatives. 

• Improved Vendor Relationships: Regular performance tracking and data-driven insights foster stronger, collaborative partnerships with suppliers. 

• Risk Mitigation: Predictive analytics and real-time visibility help organizations identify and address supply chain risks before they escalate. 

Senior Living providers who embrace procurement technology position themselves to navigate industry challenges effectively. Solutions like Direct Supply® DSSI™ don’t just solve today’s problems—they create a framework for long-term success. As the Senior Living industry continues to evolve, technology will be the key to unlocking operational efficiency, cost control, and improved quality of care. 

Why Choose Direct Supply® DSSI™ for Senior Living Procurement

For over three decades, Direct Supply® DSSI™ has revolutionized Senior Living procurement. By combining innovative technology and industry expertise, DSSI delivers results, managing $7 billion in annual volume across 19,000 communities. Their tools and services help Senior Living organizations achieve 92% contract compliance while driving significant cost savings . 

In 2025, DSSI is launching a new AI-powered menuing platform designed to streamline foodservice procurement for Senior Living professionals. This tool complements the DSSI platform, offering comprehensive solutions for operational efficiency. 

References

Chartered Institute of Procurement & Supply (CIPS). (n.d.). The impact of rogue spending on organizational efficiency. Retrieved from https://www.cips.org 

Deloitte. (2024). Annual Global Chief Procurement Officer (CPO) Survey. Deloitte Insights. Retrieved from https://www.deloitte.com 

National Investment Center for Seniors Housing & Care. (2023). The state of staffing shortages in Senior Living facilities. Retrieved from https://www.nic.org 

Health System Tracker. (2024). How does medical inflation compare to inflation in the rest of the economy?. Peterson-KFF Health System Tracker. Retrieved from https://www.healthsystemtracker.org 

Senior Housing News. (2023). Survey reveals assisted living plans for technology investments. Retrieved from https://www.seniorhousingnews.com 

What is Food Procurement?

Food procurement is the process of how food is purchased and used within an organization.  The food procurement services are not the largest or most complex area of spend within a hospital system, but often are the place where hospital systems end up overspending.

The best way to address this overspending is with spend management software that can offer efficient procurement solutions. In turn, this lowers the price of hospital food for both the healthcare facility and increases real time visibility of spending. Strong supplier relationships and disciplined supply chain operations are also crucial to patient outcomes and improving efficiency.

How to Conduct a Food Procurement Spend Analysis

You know the cost of every bed and bandage… but what about every banana? While there are many tools on the market that give some indication of where your spend is going, it is essential to know specifics in order to make any meaningful change to your healthcare procurement process.

This is where DSSI Analyze comes in. It’s the only tool on the market that can tell you by high-level categorization where your spend is at, then drill into the next level of detail to tell you what to do next, and the next level below that to get down to cost of raw goods. DSSI’s procurement selection tackles spend analysis beginning with your group purchasing organization (GPO) and your supplier performance down to your managed order guides and local distribution availability.

The DSSI Analyze tool can help you move up and down the specificity spectrum to see where the spend is not optimized, and how to fix it. Ultimately, optimized healthcare food procurement can lead to overall hospital performance improvement. A cost effective healthcare organization is one making data driven decisions, without time consuming workflows.

Integrating Food Spend with Healthcare Procurement Software

Working with data from your AP and ERP systems, combined with our proprietary modeling, categorization and visualization tools, DSSI Analyze helps you get a handle on what you’re spending where, and how to get the most out of every dollar. DSSI’s procurement software can help optimize spend for your entire hospital system.

Whether you’re spending too much on pancakes or the people making the pancakes, you can look at your macro spend by site, by category, or go down to the details on those scratch pancakes versus pancake mix versus pre-prepared heat & serve pancakes. Which are on contract, which have a rebate, which are frequently out of stock and have more expensive substitutions…the list goes on and on. And that’s just pancakes. DSSI can help visualize your supply chain value analysis and empower you to make strategic food service procurement decisions.

Other Process Improvement Opportunities in a Healthcare Supply Chain

Translate this approach out to juice, proteins, modified diets, kitchen equipment, food delivery systems, medical devices, you name it, and DSSI and DSSI Analyze can help you track it and optimize it, at every site and across your entire system. Plus, our DSSI eProcurement system can help you deploy the savings and deliver compliance now and in the future, taking your savings from hypothetical to actual in just a few clicks, and making sure your teams can sustain them year after year, order after order. The consistency we deliver is not only saving time, but ensures the highest level of patient safety.

Your optimized process improvement can also serve as a risk management tool in your healthcare setting. An optimized and long-term sustainable supply chain management program can help ensure compliance, prevent wasteful spending and avoid stockouts. 

The best way to see what you can save is with a demo and analysis – contact us today by filling out the form below to put the power of DSSI Analyze to work for your hospital or healthcare system.

With Our Powers Combined: Navigating Procurement Challenges

Our team of healthcare procurement experts unlock numerous benefits for organizations. We work alongside your in-house procurement department to maximize cost savings while maintaining high-level patient and resident care. 

Throughout our 25+ years of experience, we have identified some best procurement practices. Here are our Top Four Ways to Enhance Your Organization’s Healthcare Procurement Process:

1. Complete Order Guide management: Ensure your entire organization maximizes contract compliance and streamlines procurement operations. This is key to maintaining a smooth structure that helps procurement teams stay organized and save money.
2. In-depth analysis and outlier identification: Conduct thorough spend analysis of your purchasing patterns. Identifying outliers that may be affecting your communities’ PPD can help drive cost savings and inform your procurement strategy.
3. Constant monitoring of contracted pricing: Monitor and verify contracted pricing to ensure accuracy and up-to-date data. Your team will be saving the most time and money in purchasing, menuing, etc.
4. Roadmap for operational efficiency: Create a roadmap to guide your organization. You will be operating more effectively and efficiently, and it helps you stay on top of organizational shifts.

How to Enhance the Procurement Process Using DSSI

Spoiler alert – the spend management consulting solution of Direct Supply® DSSI Procurement Services provides help in all of the above areas!

To enhance your healthcare procurement process using DSSI, focus on two crucial factors: 

1. Supplier Contract Management and Compliance
2. Centralization of Procurement Processes

It is vital for all organizations to ensure compliance with supplier contracts and ordering practices across all facilities. By centralizing procurement operations and leveraging DSSI expertise, you can achieve significant improvements in efficiency, cost-effectiveness and other key performance indicators.

Cost Savings and Efficiency Improvements in the Procurement Process

At Direct Supply DSSI, we support healthcare organizations in achieving strategic purchasing, cutting costs and efficiency improvements in their procurement process. Our in-depth spend analysis reveals categorical outliers, highlighting items, locations and habits that impact your spend. Based on these insights, we provide detailed, actionable procurement recommendations that your organization can implement to drive cost savings. 

By implementing these recommendations, your organization can streamline your purchasing process and eliminate unnecessary expenses. This not only leads to cost savings but also improves overall efficiency. Additionally, periodic product category optimizations ensure you are buying the right products at the right time and price.

With the DSSI expertise in strategic sourcing, your organization can identify categorical outliers that may be driving up costs. These outliers could be specific items that are being over-purchased. Other issue points include practices and locations that are purchasing goods or services from non-optimized suppliers.

Our consulting partners will provide expert advice on how to manage complex supply chain management issues. Our spend management solution helps organizations navigate complex supply chain management issues. The DSSI platform helps reduce waste with our Shelves and List functionality and speeds up approval of purchase requests. Our consulting team provides valuable insight into product formularies and how to best take advantage of contracts,

By addressing these issues, your organization can make better informed decisions and adjust your ordering practices accordingly. Our procurement solutions offer the opportunity for reduced costs for products and services. Alongside cost savings, our procurement support will allow you to focus on your own expertise: improving your business operations.

Strategies and Best Practices for Driving Contract Compliance with DSSI

Compliance is a critical aspect of successful procurement operations with Direct Supply DSSI. It is essential to ensure compliance with contract suppliers. Here are a few ways to support your compliance goals:

1. Collaborate with your DSSI procurement professionals to identify and build product formulas. With your strategic supplier relationships in mind, design a thoughtful plan for your business. 
2. Ensure the consistent usage of our DSSI Capture tool throughout your organization. This tool collects “Off System” spend information to increase full spend visibility.
3. Establish effective communication between your organization and the DSSI team to maximize the benefits of our collaboration.

The Role of Technology in Healthcare Procurement

Technology plays a pivotal role in enhancing the healthcare procurement process, especially when utilizing DSSI. Our proprietary technology tools are powered by artificial intelligence and machine learning. They enable us to analyze vast amounts of healthcare procurement data faster than humanly possible. 

This capability allows us to identify spending trends, outliers and new opportunities. These may have previously gone unnoticed and we can bring them to your team to review.

 By leveraging our AI driven procurement technology, we can provide you with unparalleled insights and strategies. In the short term, many time consuming or repetitive tasks can be removed entirely from your procurement activity.

Measuring Success and Impact of Procurement Processes

Effective measurement of the success and impact of procurement process enhancements is vital. The spend management program of DSSI provides measurable success metrics in the following ways:

1. Quarterly Business Reviews, which highlight the exact savings and cost avoidance achieved through our analysis. These reviews offer tangible evidence of the positive outcomes resulting from the use of the consulting services of DSSI.
2. Access to real-time budget tracking in the renowned DSSI platform. This allows organizations to see how individual locations are performing in their purchasing cost goals on a frequent basis.
3. Reporting tools that teams can use to create their own visuals. Teams can dig deeper into their procurement data at an organizational or location level.

Collaboration and Relationship Management with Suppliers

We place a strong emphasis on collaboration and relationship management with suppliers in the healthcare procurement ecosystem. We work closely with suppliers across all facets of your procurement process. 

The DSSI consulting team takes the extra step and actively monitors your pricing. We can step in when the price of specific products doesn’t match the contracted rate in the platform. This client-facing focus ensures that we consistently offer the best purchasing experience. Our approach saves time for the supplier and provider.

Direct Supply DSSI: Leveraging Procurement Cost Savings Across Organizations

Healthcare organizations can greatly enhance their procurement process by leveraging the expertise and resources offered by DSSI. By focusing on compliance, centralization, and utilizing cutting-edge technology, organizations can achieve significant cost savings, improved efficiency, and tailored strategies for success.

Take the first step towards streamlined procurement and improved financial outcomes. Learn more about what sets DSSI apart, and request a personalized strategy for your healthcare organization today. Your procurement process and spend management transformation starts here!

Meeting Evolving Consumer Expectations through Strategic Supply Chain Strategies

Healthcare supply chains are adapting to the growing demand for sustainable, locally sourced food. They are playing a key role in meeting this trend. Meagan Pollak-Harrison emphasizes the importance of selecting strategic vendor partners.

The decisions businesses must make are crucial, whether they are large suppliers or regional vendors. Intelligent supply chain management (SCM) by third party experts is the best solution to evolving challenges.

Many see healthcare food procurement as a tough challenge. Pollak-Harrison suggests contracting local vendors for bakery, dairy, meat, or seafood items. These vendors help source local products. Through negotiation, companies can create contracts directly or with Group Purchasing Organizations (GPOs).

Broadline distribution partners play a key role in sustainable practices. These centers offer a mix of local and conventional products. This helps businesses make informed choices and adopt sustainable practices while keeping familiar routines.

Focusing on eco-friendly disposables helps organizations slowly integrate sustainable practices. This focus builds understanding of various medical products, supplies, and their costs. Healthcare facilities can gain long-term benefits from sustainable inventory management. 

Leveraging Technology and Data Analytics to Navigate Inflation Impacts

Pressures related to inflation have characterized health care in the modern day. Increasing cost of goods and services has prompted businesses to pursue cutting costs by other means. As such, technological integration becomes a vital tool for healthcare supply chain management.

Pollak-Harrison strongly advocates for the integration of technology and data analytics to optimize procurement and supply chain management. Without these tools, healthcare systems are missing out on cost-saving opportunities. In the face of the healthcare supply chain’s rapidly changing landscape, such opportunities are crucial.

Fortunately, innovations in healthcare technology are arriving rapidly to meet the changing needs of customers. Direct Supply DSSI is showing its progress and commitment to this wave of new technology.

The DSSI Order Guide Management technology has evolved into the patented OGM® 3 tool. This technology further advances the management of order guides, centralizing the process and enabling the identification of cost-saving opportunities. Businesses with a focus on cost can improve efficiency and increase cash flow.

With automated purchasing, processes are sped up and less labor is required to accomplish repetitive tasks. This not only helps to reduce costs but also improves efficiency and ultimately enhances patient care. The advancements in healthcare technology mean that there are opportunities to rethink the way supply chains operate.

Advancements in technology provide benefits beyond cost-saving opportunities. Advanced medical devices of all sizes, shapes and uses can be tracked and maintained by cloud-based networks. This “Internet of Things” should be used by providers to understand and connect their operations. The more businesses know about their products, the easier it will be for them to refine the processes that source and transport them.

Artificial intelligence (AI) further enhances these capabilities, automating the discovery of potential cost savings. This technology-driven approach has empowered providers to outperform inflation in healthcare.

A real-world success story has been the use of OGM.ai™ technology. Direct Supply DSSI providers achieved 6% lower food PPD. Inflation was reduced from the 2022 Food Away from Home index of 8.3%. Healthcare cost is down thanks to Direct Supply DSSI technological advancement.

The DSSI implementation of automated features is one example of how technology is driving positive change in the healthcare industry. As healthcare systems continue to evolve, it is essential for organizations to embrace these technological innovations. Healthcare supply chain strategies must include data-driven decision making. It is crucial to staying competitive and providing the best possible care for their patients.

Learn more about how to improve the healthcare procurement process with data driven analysis.

Mitigating Challenges: Overcoming Labor Shortages and Supply Chain Disruptions 

Challenges like labor shortages and supply chain disruptions have become recurring themes for health systems in recent years. Pollak-Harrison identifies the issue of product substitutions as a notable concern. However, solutions like the DSSI OGM 3 technology provide an effective means of navigating these challenges.

Centralized order guides focus on similar products and connect with alternate product selection features. Customers see suitable backup options through real-time inventory checks. This helps avoid problems when a product or service is not available.

This real-time approach enhances visibility and control over delivered products. Additionally, it facilitates on-the-spot decision-making based on price, quality, nutritional value, and more.

 Building Resilience Through Collaboration and Industry Expertise

The value of collaboration and partnership is evident when addressing unforeseen events like the COVID-19 Pandemic. According to Pollak-Harrison, cultivating robust partnerships within the healthcare supply chain is essential for establishing emergency preparedness plans.

Corporate partnerships between healthcare providers and procurement/supply chain support companies like Direct Supply can greatly enhance flexibility in changing economic landscapes. These partnerships enable healthcare providers to leverage the expertise and resources of supply chain specialists.

Equipped providers can adapt swiftly to economic shifts. Through such collaborations, healthcare providers can access a wider range of products and services. This access is crucial in times of fluctuating supply and demand.

Additionally, the expertise of procurement specialists aids in cost management. Direct Supply DSSI can help enforce advantageous terms with vendors and identify cost-saving opportunities. This financial agility allows healthcare providers to navigate economic uncertainties without compromising service quality.

Collaboration also fosters innovation. By working together, healthcare providers and procurement companies can develop new strategies and solutions tailored to specific needs. This joint effort promotes resilience and agility, enabling healthcare facilities to adapt quickly to new economic conditions.

Corporate partnerships with companies like Direct Supply DSSI equip healthcare providers with the tools, resources and expertise needed. Our partnered organizations remain flexible and responsive in a changing economy. These collaborations enhance operational efficiency, cost-effectiveness, and overall quality of care. Partnerships ensure that healthcare providers can continue to meet patient needs, regardless of economic fluctuations.

Strong relationships ensure swift communication and problem-solving when faced with unforeseen challenges. During the pandemic, partnerships allowed businesses like Direct Supply DSSI and Sysco® to optimize order acknowledgement processes. These businesses adapt rapidly to changing dynamics and ensure clear communication with the end users.

Future-Proofing Supply Chain Strategies for the Healthcare Industry

In the post-pandemic world, effective supply chains will manage changes to the flow of goods. In implementing flexible and responsive global supply chains, companies can avoid time consuming disruptions.

Strategies can change quickly when it comes to surprising events like natural disasters. The competitive advantage will go to supply chain professionals who have formed strong relationships with their suppliers. A flexible supply chain network is one with frequent communication, clear production processes and strong quality control.

As we look ahead, emerging trends in supply chain strategies for the healthcare industry come into focus. Pollak-Harrison suggests that staying ahead of the curve involves embracing evolving technologies and approaches.

The smartest, most successful companies will be the ones who make informed decisions. Further integration of AI and data analytics is essential. By fostering an environment of innovation and flexibility, healthcare providers can navigate emerging challenges and provide the best possible experiences.

The Bottom Line

There are many different factors to consider when attempting to make your business more receptive to changing expectations. If you have operations in the United States you might feel that a rebounding economy is a positive sign. However, your international supply chain may still be affected by outside pressures.

Procurement services that you organize internally could be affected by a merger, or labor dispute. This is why forming partnerships with support organizations like DSSI can be a massive benefit to your organizations.

Strategic vendor partnerships, whether with large suppliers or regional vendors, are essential. Local vendors can help source bakery, dairy, meat, or seafood items, making healthcare food procurement more manageable.

Focusing on eco-friendly disposables helps organizations gradually integrate sustainable practices, building an understanding of medical products, supplies, and their costs. This blend allows businesses to make informed choices while adopting sustainable practices. This approach can lead to long-term benefits for healthcare facilities through better inventory management.

Technology and data analytics are vital tools for navigating the impacts of inflation on healthcare. Automated purchasing speeds up processes, reduces labor, and cuts costs.

Artificial intelligence (AI) further enhances these capabilities by automating cost-saving discoveries. As noted, Direct Supply DSSI providers achieved significant cost reductions using OGM.ai technology.

Labor shortages and supply chain disruptions are recurring challenges in healthcare. Technologies like DSSI OGM 3 help manage these issues by providing real-time inventory checks and suitable backup options. This enhances visibility and control over delivered products, allowing on-the-spot decision-making based on various factors.

Collaboration and partnership are key to building resilience in the healthcare supply chain. Partnerships with companies like Direct Supply enhance flexibility and access to a wider range of products and services. These collaborations help manage costs and foster innovation, enabling healthcare providers to adapt to changing economic conditions. Strong relationships ensure swift communication and problem-solving, especially during unforeseen challenges like the COVID-19 pandemic.

Future supply chain strategies in healthcare must be flexible and responsive to avoid disruptions. Frequent communication, clear production processes, and strong quality control are essential. Embracing evolving technologies and approaches, such as AI and data analytics, will help healthcare providers navigate emerging challenges. When providers can focus on their own expertise, they provide the best possible care.

Interested in learning more? Read about the benefits to supply chain automation in healthcare.

What is sustainable food purchasing?

Sustainable food purchasing is defined as food procurement that promotes quality and safety. It focuses on eliminating the additives and contaminants in menu offerings. By crafting a well-rounded and sustainable food system, quality and satisfaction is raised. When a hospital system incorporates a sustainable food procurement solution, their supply chain and usage behaviors can promote long-term efficiencies and process improvements.

The benefits of food sustainability go far beyond the financial aspects. Animal welfare is usually improved at sustainable farms, generally meaning that food safety also increases. Additionally, the preservation of natural resources by these food suppliers are a dramatic force for improving environmental sustainability.

Sustainable procurement also fosters resilience. By diversifying food sources and supporting sustainable farming practices, healthcare providers can mitigate risks associated with food supply disruptions. This ensures a more stable and reliable food supply, crucial for maintaining consistent patient care.

Why is food sustainability important in hospital procurement?

If the healthcare industry were to implement a more sustainable system of food procurement, it would bring immediate and comprehensive benefits to all health systems. Improving efficiency, reducing costs and making informed decisions would be easier with a more consistent and controlled supply chain.

In healthcare supply chain management, your hospital system looks to choose products that increase the quality of care for patients. The goal is to improve the operational components of your facility. When crafting your procurement strategy, it is vital to include sustainable food product choices.

The Benefits

Hospital supply chains can reap the many advantages of sustainable food purchasing including:

• More nutrient-rich and diet-friendly food for patients. Sustainable food offerings can provide greater nutrients and food value to patients. When feeding patients with modified diets or dietary restrictions, having a breadth of sustainable offerings can add variety and increase the quality of nutrition in your hospital food service’s meals. Read more about sourcing better diets for your patients here.
• Better supplier relationships. In a hospital supply chain, you have many supplier relationships to manage. Sustainable food purchasing can help by catering to group purchasing organizations and broadline vendors. These sources have the availability your healthcare setting needs.
• Reduce waste. You can reduce waste in your hospital’s supply chain by creating a sustainable purchasing plan. Tracking where purchases are being made, whether or not the products are being used, and what is being paid are all crucial steps to reducing unnecessary costs. This has an added benefit of reducing your organization’s environmental impact.
• Increase efficiency and productivity levels. Healthcare food procurement can take a lot of time and often limit active patient care. A sustainable food system and supply chain can elevate process improvement in your healthcare setting. This allows providers to focus on providing the best care. 
• A more adaptable supply chain. Recent events like the COVID-19 pandemic have made a large impact on food security in the United States. The supplier relationships created by a sustainable supply chain are key to improving your chances of being cost-effective in a rapidly changing market. They also protect food security for your patients.

How can Direct Supply DSSI support sustainable food procurement?

Evaluating the importance of sustainable food procurement can bring widespread benefits. Process improvement and cost savings potential will come to your hospital’s supply chain. DSSI can help you achieve the benefits of sustainable food purchasing with:

• Group purchasing organizations (GPOs) and broadline vendors. DSSI  works with group purchasing organizations down to broadline vendors. We help ensure that healthcare procurement is positioned to include optimized food choice and sustainability. Our procurement software helps you find the best price for the best products.
• Food procurement spend analysis. DSSI can help you conduct a food procurement spend analysis so you can drill down on specific product costs. Our procure-to-pay system allows you the ability to digitally see how you can deploy your food savings.

DSSI is committed to forming strong partnerships that promote sustainability in procurement for our customers.

What is Procurement as a Service?

Procurement as a Service (PaaS) is a strategic approach to managing a company’s procurement needs. This strategy involves expanding various aspects of the process to a specialized service provider like Direct Supply® DSSI™. This concept encompasses a range of related activities, such as supplier management, order processing, data analytics, and cost optimization.

Healthcare providers can benefit a lot from procurement as a service. By partnering with experts like Direct Supply DSSI, they can simplify their purchasing processes. Additionally, they get expert help with sourcing and managing supplies.

The primary goal of PaaS is to relieve the administrative burden associated with procurement. Organizations using PaaS can focus on their core competencies and strategic initiatives. It offers companies the flexibility to scale their capabilities up or down as needed.

Healthcare providers using PaaS focus more on resident and patient care and less on the hassles of procurement. Providers can save money through better-negotiated prices and smarter purchasing strategies. PaaS also offers flexibility, allowing facilities to quickly adjust to changing needs.

With PaaS, there is no longer a need for substantial investments in infrastructure and personnel to support procurement. Healthcare providers can improve cost control, resource management, and the overall quality of care they deliver.

Partnering with Direct Supply DSSI

Direct Supply DSSI is a proven leader in the PaaS industry. We provide strategic sourcing by combining our excellent supplier relationships with intelligent supply chain management. Good procurement starts with strong relationships up and down the supply chain.

We have a proven track record in this area, helping providers and non-healthcare customers to achieve efficiency, savings and growth. You can read more about how we’re leading the way here.

With Direct Supply DSSI, we understand that our customers may have their own internal teams. DSSI isn’t a traditional third-party service. We recognize that many of our valued customers already maintain their own in-house teams. We partner with your team to provide a redefined “Procurement as a Service” solution.

Collaborative Approaches

In traditional models, a third party of procurement professionals takes over and operates in isolation. DSSI embraces a collaborative approach. We work hand in hand with our clients, becoming an integral part of your procurement ecosystem. Our experts seamlessly integrate with your procurement team to ensure a smooth and efficient sourcing and procurement process.

By streamlining the procurement process, we ensure that healthcare facilities have timely access to the highest quality supplies. Our expertise allows healthcare providers to focus on delivering exceptional resident and patient care rather than worrying about supply chain logistics. Through tailored solutions, we help optimize inventory levels, reduce costs, and enhance operational efficiency. Our collaborative customer partnerships also drive innovation by introducing advanced products and technologies that improve patient outcomes.

Customized Healthcare Procurement Solutions

Every organization is unique, and so are its procurement needs. DSSI understands this and tailors our services to align with your specific requirements. Our focus is not on imposing a one-size-fits-all solution.

We focus on co-creating a procurement strategy complementing your business objectives. Our products and services grant a unique competitive advantage.

Enhanced Visibility and Control

Partnering with DSSI doesn’t mean losing control over your procurement processes. On the contrary, our services provide you with enhanced visibility and control. Mitigating risks to your supply chain has never been so easy. 

Through our cutting-edge AI technology and spend analysis, you gain real-time insights into your practices. Our systems provide real-time insights into purchasing patterns and inventory levels, helping providers make informed decisions. This transparency allows for more efficient supply chain management, reducing waste and improving overall operations. 

With easy-to-use reporting and analytics tools, providers get a clear view of their procurement activities. This aids in better financial planning and resource allocation. Additionally, our platforms make record-keeping straightforward, ensuring accurate documentation for audits and compliance.

Continuous Improvement

At Direct Supply DSSI, we are committed to the long-term success of our partners. We don’t just set up shop and leave. Our team is in it for the long haul. We are constantly seeking opportunities for cost reduction and a more efficient procurement process.

DSSI seeks to work closely with our customers and suppliers to ensure compliance to the strategies we develop. We also understand that our work can always be made more efficient. Our proactive approach ensures that your procurement activities remain agile and competitive. 

Scalability and Flexibility

At Direct Supply DSSI, we understand the dynamic needs of healthcare providers and the importance of flexibility and scalability in procurement. DSSI will help you achieve a scalable procurement function. Business environments are dynamic and so are your needs. DSSI offers the flexibility to scale your procurement operations up or down as your business evolves.

We have 20+ years experience with healthcare procurement and over a decade with our PaaS solution specifically. That means that we know how to handle changes to your needs for goods or services. Our advanced procurement solutions allow for customized and scalable purchasing strategies. We enable healthcare facilities to adjust their inventory based on real-time needs. 

Our adaptive mindset helps mitigate risks associated with supply shortages and fluctuating patient volumes. Your purchasing process might change, and we’re there at every step to help you revise your strategy. We will adapt to your requirements seamlessly. By partnering with us, healthcare providers can adapt quickly to changing demands and ensure successful operations. 

The Bottom Line on Direct Supply DSSI as Procurement as a Service

Direct Supply DSSI is not just another provider. We are your strategic partner in the realm of PaaS. We combine the benefits of additional hands on deck with the advantages of a collaborative, client-centric partnership. 

As previously mentioned, we have more than 20 years of experience in healthcare procurement and more than 10 with PaaS. We work hand-in-hand with organizations like yours to handle your procurement needs. Working with us reduces risk to you and opens your company up to connecting with exciting potential suppliers.

When you choose DSSI, you choose a procurement optimization solution that evolves with your business, empowers your team and ensures long-term success. Request a consultation with our team today to learn more.

Improving the Healthcare Procurement Process: Ask the Expert

Tom Swapp, Vice President of Market Development – Acute for Direct Supply® DSSI™, discusses his history with this healthcare procurement challenge, as well as the ways in which he sees the industry solving this problem in the future. 

DSSI: How did your career path lead you to DSSI and to healthcare procurement?

Tom Swapp: I spent an early portion of my career consulting on physician preference items in acute care, one of the largest areas of spend for most hospitals. One thing I noticed early on was that the data hospitals were working with was very confusing and it was never very clean. My team members and I spent untold hours trying to clean up the data in order to draw conclusions. We wanted to levy that to make better decisions going forward.

I realized that if there was a way to have cleaner data, it would result in huge time savings and increased cost effectiveness for the hospitals. Additionally, it could lead to better decision-making in healthcare procurement strategies. 

DSSI: But grappling with that data led to your next move?

Tom: After that focus on PPI, I translated what I had learned in consulting to the hospital side of things in Denver, focused on procurement and strategic sourcing. I led a team of 25+. I experienced first-hand the manual pain of processing requisitions, purchase orders and the resulting integration process with AP. 

There is such a lack of transparency and collaboration between suppliers and providers when it comes to the transaction side of the supply chain. In situations where market research isn’t as accessible or viable, transparency improves efficiency.

DSSI: Where did you go from there?

Tom: My next opportunity was on the GPO side. I went to work for a leader in the space. I oversaw a healthcare procurement consulting team focused on helping hospitals save money. That lack of easily accessible, clean data made it hard to see and implement the savings opportunities we knew were there.

Pain Point: A Lack of Clean Data

Throughout Tom’s career, the main procurement process pain point and healthcare supply chain challenge was clean data. Organizations in his career either withheld data science or underestimated the wide range of actionable insights it could provide. Strategic planning was more difficult without strong data management.. Direct Supply DSSI has the power to help create a streamlined procurement and purchase process with actionable data.

The Three Pillars of the Healthcare Supply Chain

In the healthcare procurement process, the healthcare supply chain can be split into three pillars. Of those three pillars, logistics and sourcing hinge heavily on procurement. Sound management of the goods or services and the vendor master completely dictates data integrity.

1. Logistics (Distributors)
2. Sourcing (GPOs)
3. Procurement (ERPS)

The foundation that delivers real savings and real outcomes is procurement. You can’t have an effective sourcing strategy without really sound procurement principles. Likewise, you can’t have a good distribution strategy without great procurement. 

Additionally, procurement is often overlooked and the data to drive it is difficult to extract. The data is often pulled from an ERP that is not built to optimize for the supply chain.

Optimizing ERPs in Healthcare Procurement

Not all ERP systems are optimized for supply chain and strategically built for procurement sourcing. When trying to extract data from them, item and vendor masters can be messy. Nothing is built in collaboration with the supplier community to allow for greater visibility and coordination. Optimizing and strategically shaping ERPs in healthcare procurement strategies can bring a lot to the table for process improvement.

The Benefits of Optimization

By optimizing ERPs in the healthcare procurement process, organizations can streamline their supply chain operations and improve efficiency. This can lead to cost savings, better vendor management, and ultimately, improved patient care. 

By working closely with suppliers and integrating their systems with ERPs, healthcare organizations can enhance visibility and coordination throughout the procurement process. This collaboration can also lead to better negotiation strategies and improved relationships with suppliers. Overall, optimizing ERPs in healthcare procurement can have a significant impact on the overall success of an organization’s supply chain management.

Successful procurement strategies are the byproduct of an organization mastering their contract management. The contract should dictate the procurement terms and flow and overall, the entire healthcare procurement strategy. A supply chain ERP would be a contract visualization and compliance engine for Health System’s contracts both local and GPO. However, most ERPs don’t contain a rules engine that can be smart enough to drive procurement in an intelligent manner.

The Role of AI in Data-Driven Decision Making 

Artificial intelligence (AI) in healthcare procurement provides another advantage to data-driven healthcare procurement strategies. AI and machine learning can drive savings in the healthcare procurement process. By utilizing AI in healthcare procurement, organizations can streamline their processes and make more informed decisions based on data analysis. AI can help identify cost-saving opportunities, optimize supplier relationships, and improve overall efficiency in the procurement process. 

With automated alerts and recommendations, healthcare organizations can stay ahead of market trends and make proactive decisions to ensure they are getting the best value for their procurement needs.

As technology continues to advance, leveraging AI in healthcare procurement will become increasingly important for organizations looking to stay competitive in the ever-evolving healthcare industry. Discover why AI matters in healthcare in conjunction with your healthcare procurement strategy.

Improving and Optimizing Healthcare Procurement with DSSI

Clean and actionable data can lead to overall procurement process improvement and a streamlined healthcare procurement strategy. When healthcare organizations optimize their spend and can effectively utilize their ERPs, they can unlock true supply chain savings. Products or services move efficiently and effectively, cost reduction soars, and the procurement department can meet their business goals. 

Thanks to the Direct Supply DSSI patented OGM (order guide management) solution, and DSSI Analyze, for the first time ever, healthcare organizations can do just that. See for yourself how DSSI builds an optimized healthcare procurement process that revolutionizes the way organizations make procurement a strategic priority.

Which is the Best Format for my Healthcare Procurement Strategy?

PunchOut Catalogs:

PunchOut catalog capabilities and features vary by supplier. While PunchOut catalogs can be easy to set up, the system usually offers limited content control. 

PunchOut solutions often require users to navigate multiple external vendor websites to complete their purchases. This can lead to fragmented processes and inconsistencies in data.

Furthermore, the user experience can suffer with punchout solutions. Navigating various supplier websites can be cumbersome and time-consuming, detracting from the efficiency and convenience of the procurement process. Users may find it frustrating to switch between different platforms, leading to decreased productivity.

Suppliers may update or add products to a punchout system without notifying organizations of changes, including pricing. Because suppliers control site content, they may market unwanted promotions and coupon codes to end users. This can cause expensive disruptions to controlled procurement activities and strategies.

Without contracted pricing in place, users may over-purchase non-essential items to take advantage of seemingly attractive pricing discounts. This is wasteful spending, and it can hurt an organization’s business process.

PunchOut Catalogs don’t require a lot of management, which may lead to under utilized contracts and limited purchasing power in future negotiations. This is all to say, PunchOut catalogs can save time for your organization, but spend management over products and services can become much more difficult. 

Hosted procurement solutions eliminate these issues by integrating all vendor catalogs and purchasing activities into one cohesive platform. This integration not only saves time but also improves data accuracy and consistency, as all transactions are recorded within the same system.

Hosted Catalogs:

Hosted catalogs give organizations full control over the pricing that gets loaded. A quality procurement system should require organization approval when a supplier wants to update the product information and price. In addition, organizations can expect functionality to validate a purchase order with the associated invoice and support when discrepancies arise.

In a hosted catalog structure, product data can be depended on to remain relatively consistent. Product descriptions and special offers won’t be changed without the organization knowing about it. This eprocurement system also allows for greater vendor management, meaning you can set more controls over sourcing and pricing. A dependable pricing structure and product catalog makes risk management easier for your organization.

A hosted procurement system supplies benefits beyond consistency in product selection and price. Your procurement team will be able to reduce wasteful spending by requiring a more comprehensive approval process. All product data is centralized into one platform. Now that all of the required information is in one place, it’ll be easier to identify the quantity of raw materials or other products necessary to purchase. 

Security is another critical advantage of hosted procurement solutions. These platforms are designed with robust security measures to protect sensitive data, ensuring compliance with industry standards and regulations. Punchout solutions rely heavily on multiple external sites. The decentralization of information may pose greater security risks due to varying security practices among vendors.

Your procurement system may also allow for more comprehensive approvals based on product indicators.  For example, a non-contracted product would allow for additional oversight. Additional visibility into purchasing ensures users are making the most  cost-effective purchases. 

Our Advice for Healthcare Procurement Professionals

When considering a PunchOut or a Hosted catalog solution, stay focused on your desired outcome and procurement goals. From a technological standpoint, PunchOut catalogs offer a simpler process than creating a Hosted catalog. While PunchOut catalogs may offer immediate time savings, they are limited to a supplier’s site features.

Hosted procurement solutions offer a more efficient, secure, and scalable approach to procurement compared to punchout solutions. Centralizing all purchasing activities, enhancing visibility and control, and providing robust support are just some of the benefits. Hosted solutions empower healthcare providers to optimize their procurement processes and focus more on delivering high-quality patient care.

If you’re a procurement manager seeking more comprehensive control and savings, Hosted catalogs are the better option. Hosted catalogs guarantee cost control, which is often a primary reason for putting a healthcare procurement solution in place.

Learn more about Direct Supply’s DSSI procurement solutions here.

Tip 1: Start Early (If You Can!) and Set Clear Objectives

While the healthcare budgeting season should never be a last-minute scramble, with limited staffing, things can fall through the cracks. If you feel unprepared this year, don’t worry – begin by establishing clear objectives. What do you want to accomplish this fiscal year? 

Here are some thought starters:

• Consider the financial goals of your business or procurement department, the resources needed to achieve them and any potential challenges. By defining your goals, you’ll be better equipped to make informed decisions throughout the budgeting process.
• Remember, goals can change. Be flexible – if departmental or business goals change as they relate to your budget, then change with them as best you can. Keep in mind that the overarching goal is to play your part in controlling spend and overseeing how to best serve your customers.

Tip 2: Leverage Data and Analytics

In the world of procurement, data is your best friend. Gather and analyze historical spending data, vendor performance metrics and market trends. This will empower data-driven decisions and identify areas where cost savings or process improvements are possible. By utilizing historical knowledge and analytics, you can optimize your budget for maximum impact.

Tip 3: Collaborate Across Departments

Budgeting is a team effort, and collaboration is key. Involve key stakeholders from various departments, such as finance and operations, in the budgeting process. This input can provide valuable insights into department-specific needs and challenges, ensuring a more accurate and well-rounded healthcare budget plan. 

Tip 4: Prioritize Strategic Investments

Distinguish between essential expenditures and strategic investments. Keeping expenses in line is important, but don’t overlook investment opportunities to drive long-term growth and efficiency. Prioritize initiatives aligning with your business’s mission. 

Tip 5: Plan for Contingencies

Uncertainties are inevitable. Be prepared for unexpected challenges by setting aside a contingency fund within your budget. Having a financial safety net will help your organization navigate unforeseen circumstances, such as supply chain disruptions or regulatory changes, without jeopardizing core operations.

Tip 6: Get Your Budget Over to Direct Supply® DSSI™

Making your budget might take a while; good thing updating it within Direct Supply® DSSI™ takes just a moment! Direct Supply DSSI offers two ways to update your budget and census data: you can use a back feed (an automated file transfer) to send us your budget and census information monthly, weekly or even daily. We also offer a manual update option with our Budget Control Administration online tool. Either way, you’ll need just one or two files for all your data.

Leveraging an eprocurement technology platform to monitor your budget throughout the year helps with keeping track of your expenses and ensures that you’re always in control of your financial planning. Direct Supply DSSI simplifies the process, providing visibility on demand, so you can make informed decisions and allocate resources more efficiently. With the ability to monitor your budget in real-time, you’ll have the power to adapt to changing circumstances, respond to unexpected expenses, and ultimately optimize your financial management. Direct Supply DSSI empowers you to stay on top of your budget with ease, making it a valuable asset for organizations looking to streamline their procurement processes and financial planning. Interested in learning more? Read our blog on how to enhance your healthcare procurement process. 

Budgeting For a Robust New Year

Healthcare budgeting season may be daunting, but with careful planning, data-driven insights, collaboration, strategic thinking, and contingency planning, you can navigate it successfully. Direct Supply DSSI is here to support you every step of the way with our advanced procurement tools and expertise. By implementing these tips and leveraging our solutions, you can ensure that your senior living community and procurement department thrives in the coming year. 

To answer any questions you may have, reach out to a procurement services expert today.

The Changing Landscape of Food Supplement Procurement

Previously, healthcare food supplements have been developed by two primary manufacturers. As many in healthcare procurement might be aware, one manufacturer has ceased production of a popular nutritional treat supplement, while the other is struggling to pick up raw materials needed to obtain inventory. These disruptions have increased the cost of these supplements for our providers. 

Overall supplement prices have increased 3% in the last 12 months but the cost for nutritional treat alternatives are anywhere from 40-200% more expensive per serving. 

Understanding Food Supplement Categories

To effectively manage costs and explore alternatives, it is important to understand the different supplement categories available. Nutritional treat supplements, known for providing protein and calorie supplementation, have been widely utilized by many providers. However, the recent cost increase and product availability has made it necessary to evaluate other options.

Controlling Costs and Making In-House Alternatives

One cost-saving approach is to make your own supplements.  You can collaborate with broadliners and your menu partners who can often share recipes for fortified foods. These recipes allow you to focus on providing nutrition through food first, rather than relying solely on supplementation.

For example, can you make a nutritious shake or a fortified cereal that can be added to residents’ breakfasts? Homemade options provide an opportunity to tailor the supplements to the specific needs of your residents and potentially reduce costs. However, it is important to consider labor challenges and ensure stable labor within your facilities before implementing these homemade alternatives.

While prioritizing a food-first approach is ideal, certain situations may necessitate the use of more expensive supplements based on physician’s orders or family preferences.

However, there are tools such as temporary order guides on the Direct Supply® DSSI™ OGM® 3  platform available to ensure that expensive supplements are only used when necessary. This allows for easy removal from the order guide once the supply chain stabilizes.

 The Future is Food

Food supplements are a necessary aspect of healthcare food procurement, but balancing their use with a food-first approach is crucial. Staying informed about the supplement market, exploring cost control strategies, and considering homemade alternatives will help healthcare experts better navigate this challenging category within their procurement process.