When it comes to group purchasing organizations (GPOs) in healthcare and beyond, most procurement professionals first think about how such organizations can potentially bring value through leveraged contracts/agreements. Yet GPOs are fighting to differentiate themselves and their value in new ways. Over on HC Matters, our sister site, we recently ran a guest post by John Sganga exploring how GPOs can bring value in cases of emergency response. We reprint some of the salient learnings below, which we believe extend outside just the healthcare industry:
GPOs excel in two areas that make them uniquely qualified for emergency response efforts: relationships and sourcing. During an emergency, your facility may need additional or different supplies than you typically purchase. If staff is working around the clock, perhaps you require more food or cots and linens. What if you lose power? Do you need generator cables, fuel, batteries? With large product portfolios, GPOs can quickly source critical product requests and connect you with suppliers. This role becomes even more vital if weather prevents purchasing staff from working on-site.
What happens if the local distributor's warehouse floods, destroying all of the stock? Or, with increased demand, your vendor runs out of a particular item? Again, GPOs cultivate relationships with many manufacturers and distributors, increasing the likelihood of locating critical products. Moreover, GPOs are membership-based organizations, which, during times of emergency, can be leveraged as local supply networks. We certainly saw this type of community support during Hurricane Sandy. If one nursing home lost power or ran low on supplies, other local facilities shared resources, ensuring uninterrupted patient care. GPOs are not only well-equipped to support surges in demand, their national network of members and suppliers can help circumvent logistical issues (like compromised warehouses, shuttered airports, or closed roads)...
Lastly, some GPOs serve as liaisons to state and federal agencies, advocating for industry-wide concerns (e.g., reimbursement issues or drug shortages). In an emergency, GPOs can connect facilities in need with critical government resources. During Sandy, Innovatix and GNYHA Ventures staff worked with emergency responders to secure National Guard escorts, enabling distributors to transport supplies across closed bridges ... GPOs specialize in delivering the right products to the right patients at the right time--a mission that becomes more critical when ensuring the continuity of care during an emergency.
Not to mention potentially ensuring the continuity of a supply chain in cases of disruptions and natural disasters in other industries!