Soap supply to Hillview Hospital Case Study

Document Type:Case Study

Subject Area:Management

Document 1

Hillview is one of London’s large employer with 658 full-time employers and 543 employees part-time. Being a large hospital, it has suppliers who do supply various good to the hospital starting from medicine, antiseptics, soap among other goods supplied. Times were turbulent in the entire health care industry in Ontario. Many of the hospitals were faced with budget cuts downsizing and even closing but Hillview hospital was able to withstand this pressure in large part through commitment to a high quality of patient care and also hospital operations too. During the recent months several newspapers articles had printed reports on mutating bacteria, known as MRSA and VRE that had become resistant to antibiotics. Even though the bacteria were not life threatening to healthy people, they could be fatal to the sick and already weakened individuals. Hence hospitals had to pay close attention to controlling them and using soaps and detergents that can eradicate them completely. Hillview had a long-term problem free relationship with the current antiseptic soap supplier Bergman Labs which used to supply soap to the hospital. When the staff complained that the soap was clumping up in the dispensers and was not cleaning as it used to clean before, Joe the procurement officer questioned the supplier about the soap. Bergman Labs admitted to having changed the formulation of the soap without informing the hospital. Joe’s concern was over the lack of communication between Hillview and the supplier Bergman labs thus requesting for new quotes from other suppliers. Discovering the scopes Lack of proper communication from Bergman Labs during the change of formulation of soap led to the request of quotes from four suppliers and there was need to compare them.

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Preference is to be given to the local suppliers which had price difference of which was five percent or even less. Considering the location of the suppliers was also important in this case. The first supplier is Bergman Labs which is located in London, it supplies hospitals and schools. It did offer a price of $40. per case of six one-litre bottles. There was a charge of $10 per order. This supplier had promised to revise the formulation again to prevent the soap from clumping. The soap was 100 percent effective in eradicating MRSA and VRE bacteria. per dispensing unit, and a $10 order charge. ChemCare was based in Toronto and supplied hospitals only. The soap eradicated 100 percent of MRSA and VRE bacteria but tended to dry out sensitive skin. All suppliers would deliver every two weeks, except for Bergman Labs which delivered in every three weeks.

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Altrex, Bergman Labs and Dolphin Laboratories offered terms of net 30 while ChemCare offered net 15. The products which are supplied by this supplier were providing safety for patients and also satisfaction for the employees and could be paid after thirty days of delivery. The conditions which Hillview and the supplier had were perfect until Bergman Labs decided to go against the protocol quality and changed the formulation without informing Hillview hospital. This could be very fatal to the sick and weak patients who could be affected by the bacteria if it wasn’t noticed early. This shows that the supplier can easily manipulate the soap and the detergents without the consent of the hospital. Through the supply to the hospital, a case was to be supplied at $40. Altrex could also supply the soap after every two weeks and above that they could be paid after 30 days.

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Dolphin laboratories, a Toronto company with a London office, supplied hospitals, schools and restaurants. The dispensing units would be installed free of charge and the price per case was $35. with 12 bottles of 600 ml each per case. The soap had an appealing smell and an added moisturizer but had not yet shown to eradicate 100 percent of MRSA and VRE bacteria. ChemCare was based in Toronto and supplied hospitals only. The soap eradicated 100 percent of MRSA and VRE bacteria but tended to dry out sensitive skin. ChemCare is expensive despite it giving eight hundred and fifty millilitres of soap and having a cheap price, it also charges fees for the installation and disposal of all the dispensing units unlike the other suppliers of Dolphin and Altrex. This hence makes ChemCare to be expensive than the others.

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In addition to that ChemCare requires that they be paid after fifteen days of delivery yet the Hillview hospital requires that the suppliers be paid after thirty days of delivery so as to optimize cashflow. This factor leads to another disqualification of Bergman Labs. The last factor is the pricing of Bergman Labs, which indicates that they are expensive since they are supplying at an extra cost of $10 per order and taking into consideration of the orders supplied into the hospital, its going to be expensive. Lastly, they supply after every three weeks and we need soap to be supplied after every two weeks and so it means if the soap has a shot bacteria can spread so easily and so fast. Therefore, in this case we have to disqualify Bergman Labs from supplying to us.

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Altrex is another supplier who supplies soaps all over hospitals in London and its scent is acceptable. The other factor is that Dolphin agreed to replace all the dispensers all over the hospital for free and dispose them for free. For this category they do qualify to supply the soap. Dolphin soap is cheap since they supplying us for $35. per case. This qualifies them in this particular category. But when it comes to payment they requesting to be paid after fifteen days of delivery and our terms of payment are after thirty days of delivery hence this disqualifies them in this category. When it comes to patient safety and employee satisfaction, the soap kills the MRSA and VRE bacteria 100 percent but it does dry out sensitive skin so fast. This factor of drying sensitive skin disqualifies ChemCare since other supplier soaps don’t have this characteristic.

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Hence it means that if one has skin allergy this soap will affect him in a way. Initializing the process After reviewing all the suppliers, their terms and conditions we could like to have a new supplier on board who qualified through fulfilling of the following minimum requirements. The first phase will entail the replacement of the old dispensing units with the new ones so as to ensure that the soap doesn’t mix with that of previous supplier when poured into the dispensing unit. In that a new supplier has to come on board with new dispensing units and the supplier has to replace the dispensing units for free. Second phase will entail the supply of soap to the hospital immediately by Altrex. Altrex will be supplying the soap after every two weeks.

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The soap that will be supplied by Altrex kills the MRSA and VRE bacteria by 100 percent and this fits our requirement of patient safety and employee satisfaction.

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