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Purchase Order Confirmations – The Ultimate Collaboration Between Providers and Suppliers

by | Jul 29, 2019 | Blog Posts

Purchase Order Confirmations – The Ultimate Collaboration Between Providers and Suppliers

-by Lanie Farkas


Since the early 2000s, healthcare organizations have worked hard to improve supply chain processes, and truthfully, at times it’s felt like a bit of a tug-of-war between suppliers and providers. First, suppliers had more technology capabilities, but their early efforts often focused on creating e-commerce sites and online catalogues. As those sites took shape, we began to see a lack of advantages for providers, as their purchases crossed over multiple sites. Going to dozens of separate e-commerce sites, there wasn’t a way to get aggregated purchasing reports showing what items were purchased, how many, at what price, for which location, over periods of time.

Thankfully, today’s technology supports the many-to-many relationships among provider and supplier organizations, in new ways that benefit all. More automation means streamlined, accurate and lower cost processes for everyone. Working together brings benefits – both in terms of cost and labor savings – to all.


Have you reached your collaboration potential? Purchase Order (PO) Confirmations are a great next step. These six ideas will help your organization make progress fast:


1. If you’re not yet receiving electronic PO confirmations, ask every supplier to send an 855 on every purchase order. You need them for everything that follows!

2. As you identify new vendors for upcoming contracts, make sure they’re 855-ready and can send a confirmation on every order.

3. If you’re placing orders via email or phone (and really, try not to!) make sure vendors can at least send a confirmation email so you can identify backorders, price discrepancies or delays.

4. Your mantra is “manage by exception!” Managing confirmations on the front end will streamline everything that follows –

• Everything that matches can flow right through your system
• Set tolerance limits. Can small discrepancies flow through or does every price exception need to be managed?
• Managing confirmations daily will help avoiding having to identify and fix discrepancies on the back-end

5. Data management is forever. Be ready for it. (And assign someone to do it.)

• As discrepancies are flagged, update any incorrect data in your item master to avoid a recurring discrepancy, especially on frequently ordered items
• Improving data means you’ll not only reduce discrepancies, but also pave the way for automation, in both supply chain and accounts payable

6. Keep collaboration going! Review performance metrics and create expectations for each of your organizations. Set goals for:

• Percentage of on-time delivery
• Price accuracy
• Back order rates
• Percentage of order fulfillment


Want to read more about Best Practices? Check out the Best Practices section of the IOS website! And to stay up-to-date about Best Practice-based supply chain processes, subscribe to our monthly Best Practices Newsletter.



About the Author

Lanie Farkas
Director of Projects and Implementations
Inventory Optimization Solutions (IOS)

With in-depth healthcare and supply chain knowledge, Lanie Farkas also brought hands-on Envi expertise when she joined IOS in 2006, after being a super user at a large organization with more 50 veterinary labs across the U.S. With a passion for creating a better healthcare supply chain, Lanie delivers real-world, best practice-based expertise to IOS customers. As the Director of Client Services and Implementations/Projects, Lanie is the lead on customer experience from the moment an organization signs an agreement through go-live, including system build, data collection, training and everything fun in-between. She guides IOS customer through the process, making sure they’re ready for success. When she’s not working, Lanie takes her Ducati out for two-wheel therapy and enjoys bringing her bulldog to local veterans’ homes in the Las Vegas area.