Vendor Management in Healthcare: Taking A Strategic Approach

Healthcare workers in hospital

Healthcare providers, from bustling hospitals to specialized surgery centers, face many challenges in getting and managing essential medical devices and implants. Vendor management, particularly in the context of vendor-managed inventory (VMI), plays an important role in this process. Navigating the complexities of these relationships and supply chains is no small feat—the stakes are high, as any misstep can postpone surgeries or, worse, compromise patient care.


This article will provide you with actionable strategies and insights to optimize your surgical supply partnerships and healthcare vendor management strategy. While the nuances of vendor management in healthcare are far too complex to be covered in one article, we aim to provide you with a solid foundation to get you started.

What Is Vendor Management in Healthcare?

Vendor management in healthcare involves coordinating and overseeing the many external companies—the vendors—that supply hospitals and surgery centers with products and services. The products in question range from indispensable medical devices and implants used in surgeries to essential pharmaceuticals and support services, which directly impact the quality and timeliness of patient care.


Healthcare vendor management, particularly in surgical supply chains, poses unique challenges that go beyond simple procurement and inventory management. Medical devices and implants are procured based on specific surgical requirements and patient needs, making the process variable and time-sensitive. A delay or failure in delivery can force surgeries to be postponed and negatively impact patient care. These items are also subject to complex and stringent regulatory requirements that extend to storage, handling, and documentation. Both vendors and purchasers share the responsibility for compliance, and the dynamic nature of regulatory frameworks means that both parties must stay informed of updates or changes.


In addition, more and more hospitals and surgery centers use vendor-managed inventory systems (VMIs) for medical devices and implants. This means the relationship between the healthcare organization and the vendor in a VMI system is typically more collaborative—with the vendor often having direct access to the organization’s inventory data and frequent coordination between the facility and vendor.


Although vendor-managed inventory often saves organizations time and money, it also adds complexities that only serve to emphasize the importance of effective healthcare vendor management.

5 Key Strategies for Streamlining Vendor Management in Healthcare

Managing surgical supplies and medical devices is a critical component of healthcare operations. The strategies outlined below help streamline this complex process to build stronger, more productive relationships with vendors and ultimately improve patient outcomes.

1. Centralize Vendor Information

Centralizing vendor information involves creating a unified, accessible database or system that houses all critical vendor-related data, from contracts and performance metrics to compliance statuses and contact details.


Having a unified vendor system or database:

  • Reduces the time and effort required to access and manage vendor data, improving efficiency.
  • Facilitates better decision-making, as all relevant information is readily available and easily analyzed.
  • Supports compliance with data privacy regulations and improves security, as sensitive information is consolidated in a controlled environment.


An end-to-end healthcare vendor management platform like ReadySet helps simplify this process by seamlessly integrating with healthcare IT systems to provide real-time, updated vendor data.

2. Automate Processes Related to Healthcare Vendor Management

Automating routine tasks like order processing, inventory management, and tracking deliveries can revolutionize how healthcare providers manage vendor relationships. This reduces the likelihood of manual errors, frees up valuable staff time, and improves consistency in vendor relationship management.

Healthcare worker reading information related to vendor-managed inventory

Platforms like ReadySet can handle tasks such as case coordination, proactive alerts for surgical schedule changes, real-time inventory tracking, and automating the bill-only process.


Automating aspects of your supply chain requires integrating software systems across various departments. Check out our guide on questions to ask when procuring a new clinical software system to gain more insight into the logistics of automating vendor management.

3. Improve Communication with Vendors

Effective communication is the backbone of successful vendor management. It’s not just about staying in touch but working together in a responsive, transparent way.


Effective communication with vendors begins with the following:

  • Establishing quarterly meetings with vendors to review relevant data points.
  • Building trust through transparency and consistency.
  • Using software solutions to enable vendor information exchange.


For example, ReadySet eliminates the need for staff phone calls by automatically forwarding vendor case invites to assigned vendor reps as soon as a case is scheduled with pertinent case details. It also sends proactive alerts to vendor reps in case of surgical schedule changes or cancellations and offers real-time tracking of inventory both of which dramatically improve communication between vendors and providers. Curious to try it out yourself? Book a Demo here.

4. Evaluate and Consolidate Vendors

Many hospital and surgery center supply chains have vendor overlaps and inefficiencies. Consolidating these vendors transforms a fragmented and inefficient vendor structure into a more cohesive and manageable one.


The benefits of consolidating vendor relationships are multifaceted—it can:

  • Improve negotiation power and better terms, as a more focused group of vendors can foster stronger surgical supply partnerships.
  • Simplify management and communication processes, as there are fewer relationships to maintain.
  • Further streamline communication with vendors.


Streamlining in this context doesn’t only mean reducing the number of vendors. It’s about strategically selecting the best value, reliability, and alignment with the healthcare provider’s needs and goals. It’s also essential to balance the potential benefits of consolidation with the need for supply chain resilience. Reducing the number of vendors can increase dependency on a smaller group, which may pose risks in case of supply disruptions.


ReadySet provides comprehensive healthcare supply chain data and analytics capabilities that help identify which vendors are performing well and which are not, based on various metrics like delivery times, cost-effectiveness, and reliability. This data driven approach is necessary to make informed decisions about which vendors to retain or consolidate while maintaining the ability to weather disruptions.

5. Optimize Vendor Performance

Delivering quality healthcare depends on vendors meeting contractual obligations and adapting to changing needs. For this reason, vendor management in healthcare must include monitoring vendor performance and providing feedback on an ongoing basis.

Healthcare worker reading file related to vendor-managed inventory

By understanding vendor performance, hospitals and surgery centers can maintain high standards and promptly address any potential issues. This proactive approach ensures that the quality of goods and services remains consistent and aligned with patient care needs.

Platforms like ReadySet Analytics can be instrumental in this process, providing:

  • Data-Driven Vendor Performance Monitoring:

    ReadySet offers comprehensive data analytics capabilities that enable healthcare providers to monitor vendor performance effectively. With the platform, vendors are evaluated on timely and quality deliveries and their contribution to patient outcomes.

  • Customizable Metrics and Reports:

    ReadySet can generate specific reports so that healthcare providers can adjust their evaluation criteria to match their needs and standards. This feature is essential for assessing vendors’ roles in patient care and healthcare delivery.


Be sure to interpret performance data in the context of specific vendors and the needs of your healthcare facility. Performance is not a one-size-fits-all metric. Effective vendor management in healthcare is more than just about daily operations—it’s about collaborating with vendors and making data-driven decisions to develop an effective healthcare supply chain strategy.


ReadySet Surgical offers effortless control and oversight of vendor-managed inventory to ensure that every surgical tool and implant is exactly where it needs to be on time. By optimizing the flow of these critical resources in hospitals and surgery centers, our platform empowers healthcare professionals to focus on what matters most: providing exceptional patient care. Get started with a ReadySet demo today.