| Abstract |
Gujarat Cancer Research Institute (GCRI) purchases about 2000 items of medicine every year from about 260 suppliers worth Rs. 60 million per year. This system is very archaic. GCRI floats tenders in March every year. All quotations are tabulated manually and vendors are selected on the basis of lowest price for each item quoted. This process takes about three months. About 1200 purchase orders are placed every year. Purchase order quantity is based on a subjective assessment by the purchase officer about the stock on hand and the quantity indented by user departments. GCRI enjoys a three-month credit period for all its purchases.
The reengineering activities started with replacing the existing centralized organizational structure with a new decentralized structure. Reengineering the purchase system consisted of establishing a new system for vendor selection based on quoted price for a basket of items instead of individual items. The new prescription is to place 12 purchase orders, one for each month at the beginning of the financial year itself, based on an estimate of the annual requirements and the monthly consumption pattern over the year. A computerized database has been designed to facilitate data storage and retrieval of information related to items and vendors. These efforts led to reducing the number of vendors from 200 to 60, number of purchase orders placed per year from 1200 to 60, and the number of items in the inventory from 1350 to 1270. The end result was a saving of approximately Rs. 60 lakh on annual purchases of hospital supplies.
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