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The Toledo Hospital has initiated many innovative quality programs. One initiated with the dietary department involved turning its wholesaler into a partner to provide better-quality products, lower costs and better service. Specific requirements were established in each of these areas including guaranteed mark-ups, price caps and performance reports. The hospital and the wholesaler also do joint negotiating with product manufacturers. Through these and other strategies, the hospital has reduced purchase prices for food items by over 4%, drastically reduced administrative costs of procurement and lead time, increased inventory turns to over 80 and given the dietary department a single resource for "one stop shopping."

By integrating customer satisfaction planning and industrial engineering techniques when examining internal costs and efficiencies, materiel managers are able to better realize what concepts will best meet their customers' needs. Defining your customer(s), applying industrial engineering techniques, completing work sampling studies, itemizing recommendations and benefits to each alternative, performing feasibility and cost-analysis matrixes and utilizing resources through productivity monitoring will get you on the right path toward selecting concepts to use. This article reviews the above procedures as they applied to one hospital's decision-making process to determine whether to incorporate a stockless inventory program. Through an analysis of customer demand, the hospital realized that stockless was the way to go, but not by outsourcing the function--the hospital incorporated an in-house stockless inventory program.