By January 23, 2007 3 Comments Read More →

Blame the Vendor or Hospital Purchasing??

I’m sure most of you are familiar with or have used the Akro blue bins for organizing parts, tools, or a kanban system. The bins are used all over factories and they are used quite often in hospitals (look in the background of episodes of House or Grey’s Anatomy and you’ll see them, though it normally doesn’t look like a Lean kanban system).

A bin with dimensions 5.5″W x 10.875″L x 5″H costs $4.55 from the popular industrial supply house, Grainger. Click the photo on the right for a screenshot (and hit “Back” to return to this page).

That same bin, same dimensions, same manufacturer, same everything can be ordered from a different distributor company that specializes in equipment for laboratories. Guess the price?

$13

See the screenshot on the left. I’ve checked into this multiple times. These are the SAME bins (a lab I’ve previously worked with used to order through the healthcare vendor) and they are 2.5x more expensive. That hospital promptly started ordering through a new Grainger account that I recommended. New hospitals I work with always end up ordering through Grainger.My point isn’t that I saved the hospitals some money. The money DOES add up when you buy hundreds of bins for organizing supplies throughout a hospital. My point is that it’s sad that vendors and distributors apparently see large dollar signs when they look at hospitals. I don’t know what’s worse, the fact that hospitals get charged these prices or that hospitals PAY these prices. Why does the vendor charge $13? Because they can.

A topic I often beat into the ground is that the market sets the price. To have a price, you need a seller and a buyer. I guess, ultimately, we have to say shame on hospital purchasing departments for not being more savvy. I’ve often recommended to lean manufacturing folks that they should move into healthcare and try to help fix things here. I guess I can extend that invitation to purchasing agents, purchasing managers, and purchasing directors. You don’t even need “lean” experience to come in and drive big savings, I’d guess. Come into healthcare. Please.


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

3 Comments on "Blame the Vendor or Hospital Purchasing??"

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  1. Dvisco says:

    Great article Mark. I couldn’t help but compare our prices to those you found at Grainger. At The 5S Store, we have identical bins at only $3.38 each. Together, we can save the hospital industry even more money.

    Dave Visco

  2. Anonymous says:

    If you buy one of those gates that you put up to separate two rooms, it will cost you 2-4x from a children’s catalogue than from a pet catalogue. Why? Because we’re willing to spend anything on our children’s safety – the gate is exactly the same.

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