Lusaka Hospital Purchasing System Report

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4.1.2 Goals

- Establish an efficient purchase process in which people who get well trained are working.

- Provide a system that makes use of the hospital’s current resources as much as possible to reduce cost, but still operates at maximum efficiency and effectiveness.

- Make sure the hospital has sufficient funds for purchasing inventory. (i.e. Purchasing at a fair price)

- Ensure that correct orders have been received by the supplier.

- Make certain that the correct amount is paid for the correct product. (i.e. no counterfeit drugs are received from any given supplier)

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Fig 1. The Expenditure Cycle

[pic 1]

(Romney & Steinbart, 2013)

5.1 Threats and Controls

5.1.1 Threats and Controls for Goal 1

Threats to Ensuring an Efficient Purchasing System

The local hospital is experiencing a shortage of professional who are familiar with the drug purchase process. The major threat is the lack of expertise and mature training project.

Controls to Ensure Staff Maintain Expertise and Training

Obviously, to mitigate the risk of the lack of enterprise of purchasing staff, the local hospital could establish a complete and effective training process to make staff get the hang of the basic operating principle of drug purchasing process and can do the purchase of drug from the supplier individually. The training project could involve a lot of things, like the hiring of training specialists; the choosing of teaching materials; or the setting of the whole project and the practice of trainee who have already finished the basic training. As in Coombs’ article on the management systems in place in hospitals, “...we have to give them the information systems and the skills to do that.” (1987). However, the letter from the local hospital says that there is little expenditure budget and then the scale of training project is also limited. In this case, the team should consider the performance level of training project, and reduce unnecessary part on the training scheme like simplifying the practice part or just take the experience of similar institutions in near area for reference. The control for the efficiency and effectiveness of the training project should also under the monitoring of the team and the management level of the hospital. To ensure the lack of the expertise of staff who deal with the the purchase process could be resolved by this project, the team could use some modern management tools, like scorecard to evaluate the performance of training project in diverse points of view. When the training is nearly finished, the practice must be implemented to ensure that the trainee can get first-hand working experience and the whole process should be under supervision of the team and the training specialists.

5.1.2 Threats and Controls for Goal 2

Threats to Maintaining Efficiency and Effectiveness with Current Resources

One of the most apparent threats that could prevent the system’s achievement of this goal will relate to possible security dangers due to outdated system software or technology. This threat can cause the valuable information to become easily accessible for others outside the system and can cause deficiencies in effectiveness and efficiency of the system.

Controls to Ensure Deficiencies in Efficiency and Effectiveness are avoided

As this threat is present due to a possible lack of updated technological software, a control that can be put in place is to ensure that no sensitive information is stored in any software that could be considered outdated or at risk. Instead, data should be stored in a physical manner where the hospital can ensure that it has been secured. This control allows for one way to ensure that information is still retained by the hospital, allowing for an effective and efficient system, however removes the possibility of any external sources gaining access to sensitive data through a means of outdated technology which is present in the hospital due to a lack of resources. Another control that can be put in place would involve performing regular monitoring checks to the security in place in regards to both any technologically stored information and any physically stored information. These checks would ensure that no threat has been made to the security of the information and the hospital can continue to rely upon their current information storage situation. One final control would be appropriate if any data was unfortunately compromised, this would involve ensuring resources went towards the updating of security protocols and measures which directly relate to the incident that occurred. This would mean that any possible breach of security that could then be taken advantage of again in the future that had already been discovered would be removed, and would provide the most efficient use of the hospital’s limited resources to ensure that the system remains as functional and effective as possible whilst retaining the highest amount of security to data they can.

5.1.3 Threats and Controls for Goal 3

Threats to Ensuring the Hospital Maintains Sufficient Funds

In attempting to make sure the hospital has sufficient funds to purchase inventory, one of the threats is purchasing items at inflated prices. Supplies purchased by the hospital might be at an inflated price due to the lack of knowledge of the market price. Also, employees might have been bribed or offered incentive by suppliers to coax in purchasing their products, causing the hospital to suffer losses.

Controls to Ensure Costs are minimised

Multiple controls can be implemented to ensure the hospital has sufficient funds and does not overpay for supplies. One is to have a price list of the supplies where the management or purchasing employees are aware of the market prices and acquire product information from different suppliers (Romney & Steinbart, 2013). The price list should then be stored and consulted when making purchasing orders to ensure they are at the lowest possible price. Best prices for low-cost items