An initiative aimed at cutting costs through bulk purchases across The University of Texas System health institutions will net $2.5 million in its first year and is projected to save campuses more than $30 million when fully implemented.
Scott C. Kelley, executive vice chancellor for business affairs, presented the results of the Supply Chain Alliance Strategic Initiative to the UT System Board of Regents today (Feb. 7). The effort – part of a comprehensive system-wide shared services initiative – was approved in October 2006 to leverage collaborative purchasing power across UT System institutions.
An essential initiative within the system strategic plan, the Supply Chain Alliance, headed by Assistant Vice Chancellor for Health Affairs Richard St. Onge, is an effort to maximize the buying power of the system’s health institutions and to significantly reduce costs.
“This initiative demonstrates our commitment to being good stewards of the public funds to which we are entrusted,” Chancellor Mark G. Yudof said. “Meanwhile, our staff will work diligently to continue to search for ways in which our institutions can use their collective strength to maximize efficiencies.”
The system’s six health institutions entered into two bulk purchasing contracts for laboratory equipment and distribution for commonly purchased items, such as centrifuges, freezers, beakers, gloves, tubes and other laboratory products.
With no shipping or delivery charges, fixed prices for the next year – and future price increases capped at 5 percent per year – these first contracts of the initiative are expected to result in average annual savings of more than $2.5 million and include future automation opportunities.
In the next year, the initiative will explore other opportunities, such as information technology, facilities and physical plants, business administration and medical supplies.
