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Greening the Supply Chain through a Multi-Category Total Cost of Ownership Tool

10:10 AM  -  11:10 AM, Wednesday, May 25, 2016  |  Auditorium

Many institutional purchasers face cost pressures on a daily basis and attempt to save money in their procurement decisions. This is especially true in the healthcare sector, where purchasers face tremendous cost pressures. At the same time, there are embedded costs within many product categories which are not always reflected in the purchase price, and may not be considered during the purchasing decision. To reduce both costs and associated impacts, total cost of ownership should be included during purchasing decisions to assess the full cost to an organization. Total cost of ownership tools can provide purchasers with a standardized and systematic way to consider the environmental costs of products that are procured, such as the cost of energy, water or waste disposal. This session will demonstrate the benefit of looking at a total cost of ownership to identify valuable savings opportunities in procurement.

Partnering with Trucost, Practice Greenhealth worked collaboratively with hospitals and health systems, suppliers, and Group Purchasing Organizations (GPOs) to build, test, and now deploy a Total Cost of Ownership tool for the health care sector, across a broad range of product categories. Representatives from two healthcare organizations that piloted the Beta version of the tool will highlight where and how the tool was applied, the user requirements, the targeted products, and the outcomes showing the comparison of costs and savings identified.