Lowest price isn’t always the best price
Doing a comparison of prices is the easiest step in what should be a multi-faceted approach to securing the best price. Too often to the detriment of the facility, this step is the only one undertaken and usually the lowest price is chosen without taking into account other very important factors and steps needed to secure the best deal.
Of course the number of steps that need to be taken to obtain the best price will vary based on the product, its complexity and relationship in use to other products.
Provided below are factors to take into account to achieve the best price, not necessarily the lowest price:
- Does the product come in different sizes or quantities per case that will provide a lower cost per unit used?
- If the product is one that the quantity used is less than the package size, can the balance of the product be used or is it thrown out?
- Is there another product that can perform the same function at a lower cost per unit used?
- Is the product readily available through your normal distributors or will it require a special order?
- Is there a minimum quantity that you will be required to purchase which could add to your inventory costs?
- Is the product used in conjunction with other products, what is the impact?
- Will training of staff be required and if so, how much time will be taken away from their normal responsibilities?
- Can technology be used to reduce staff time and/or make the products use more efficient?
- Can converting to a new product free up staff time?
- Can you change your process to reduce or eliminate the need for this item?
- Talk with other facilities, your group purchasing organization and suppliers to determine if there are other options.
- What is the length of price protection?
- Will the product improve the health and well being of your residents?