Procurement financial importance

Ideally, the most critical financial and operational key performance indicators (KPIs) centering around service level, quality, and cost should be monitored for each function, but it is important for all SCM-influenced costs to be reported to avoid distortion for example, more frequent procurement orders would reduce the cost of raw materials inventory at the expense of inbound logistics costs, and omission of the latter would give a misleading picture. 

Today, the hospital pharmacist is still mandated to control the supply chain, however there are challenges firom supply chain professionals supported by those who consider medicines to be no different firom any other commodity. Procurement now has to take place in an environment that has more and more budget restraints and external paralysing constraints induced by unwanted dependencies of third party suppliers and sometimes even drug shortages. If the skills are lost, important financial resources would be needed to reactivate lost know-how related to neglected technical equipment or outsourced activities. However, such time is not available in situations such as medicines shortages. Consequently, re-adaption may cost more than ever could have been saved. 

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