Pacific Healthcare

I. Major Facts

Pacific Healthcare is considered the largest health care provider in the Santa Barbara County. Pacific Healthcare is responsible for running and maintaining three hospitals, two nursing homes, and ten outpatient clinics. Barney Rubble is the corporate director of supply management for all Pacific Healthcare entities and is responsible for procurement of all required supplies. The selection of the X-ray film for Pacific Healthcare has been left up to Mr. Thurston Howell, director of radiology. Mr. Howell has recently passed away. Before his passing he refused to order any other x-ray film besides Kodak film because it has the best quality.

II. Major Problem

Since Mr. Howell's passing, Mr. Rumble is given the opportunity to change the policy of ordering x-ray film. Unfortunately, Kodak will not do business with Pacific Healthcare unless they are the sole providers of the film. Pacific Healthcare wants to procure the highest quality film but at a reason possible at the lowest overall price for a 12 month contract.

III. Possible Solutions

A. Pacific Healthcare supply policies should not allow for any medical staff personnel to have control over the sourcing. Medical personnel should be able to offer their input into what brand works better to suit their needs but ultimately the purchasing should be left up to Mr. Howell and his supply team. Mr. Rubble has an opportunity here to save the Pacific Healthcare a lot of money per year. Going with Agfa or Dupont would be the logically choice. Going with one these choices could save the company up to $164,250 annually.

B. Another option would be for Pacific Healthcare select Fuji or 3M to award the 12 month x-ray film contract to. By selecting on of these two companies Pacific Healthcare could save up to $246,375 annually. This would be a huge savings but would sacrifice the quality of film.

C. Pacific Healthcare can decide to continue to award the contract to Kodak as their sole source provider of x-ray film. They already have a good working relationship with Kodak and will not have to go through the hassle of involved establishing a new contract with a new vendor. The will be no change in the quality of film and because Pacific Healthcare already has contracts with Kodak they will not have to worry about delays in the receipt of materials.

IV. Choice and Rationale

The most rationale choice would be for Pacific Healthcare to choose to select another company to purchase x-ray film from. Any other the four other companies that sell x-ray film would be a huge annually cost saving for Pacific Healthcare. Fuji and 3M have the highest cost savings but lack the quality the Kodak provides. The most rationale choice would be for Pacific Healthcare to award the 12 month contract to Agfa and DuPont. Both of the companies offer significant cost savings and provide the same quality of x-ray film that Kodak provided.

V. Implementation

Based on the case study I would suggest that Pacific Healthcare choice either Agfa or DuPont. The cost savings that will be made by awarding the contract to one