Procurement performance measurement system in the health care industry

Arun Kumar · Linet Özdamar · Chai Peng Ng

104 citations0/0 files storedInternational Journal of Health Care Quality Assurance

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Quality and Supply Management Accounting and Organizational Management Healthcare Quality and Management

Abstract

PURPOSE: The rising operating cost of providing healthcare is of concern to health care providers. As such, measurement of procurement performance will enable competitive advantage and provide a framework for continuous improvement. The objective of this paper is to develop a procurement performance measurement system. DESIGN/METHODOLOGY/APPROACH: The paper reviews the existing literature in procurement performance measurement to identify the key areas of purchasing performance. By studying the three components in the supply chain collectively with the resources, procedures and output, a model is been developed. Additionally, a balanced scorecard is proposed by establishing a set of generic measures and six perspectives. A case study conducted at the Singapore Hospital applies the conceptual model to describe the purchasing department and the activities within and outside the department. FINDINGS: The results indicate that the material management department has already made a good start in measuring the procurement process through the implementation of the balanced scorecard. RESEARCH LIMITATIONS/IMPLICATIONS: There are many data that are collected but not properly collated and utilized. Areas lacking measurement include cycle time of delivery, order processing time, effectiveness, efficiency and reliability. Though a lot of hard work was involved, the advantages of establishing a measurement system outweigh the costs and efforts involved in its implementation. PRACTICAL IMPLICATIONS: Results of balanced scorecard measurements provide decision-makers with critical information on efficiency and effectiveness of the purchasing department's work. ORIGINALITY/VALUE: The measurement model developed could be used for any hospital procurement system.

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References

1993Process innovation: reengineering work through information technology 1999The performance measurement revolution: why now and what next?1999Purchasing and supply chain management 2000Strategic Performance Management: Development of a Performance Measurement System at the Mayo Clinic 2001Creating a balanced scorecard for a hospital system.1995Purchasing and Supply Management

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2016Evaluating the Effectiveness of Public Procurement Performance Management Systems in Local Governments 2009MEASUREMENT AND HEALTH CARE MANAGEMENT 2014Development of Balanced Scorecard for healthcare using Interpretive Structural Modeling and Analytic Network Process 2020A systematic literature review on supply chain risk management: is healthcare management a forsaken research field?2016The impact of performance measurement on purchasing group dynamics: The Canadian experience 2012Applying the Balanced Scorecard approach in teaching hospitals: a literature review and conceptual framework 2010Performance management in service operational settings: a selective literature examination

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