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  • Essay / The Advantages and Disadvantages of GPOs - 1235

    In the United States of America, GPOs have become very popular in healthcare centers and hospitals. As health centers focus on reducing costs, they have turned to GPOs. They help them reduce costs and increase efficiency. but the question arises whether GPOs actually help improve the efficiency they claim or, as their critics claim, have GPOs become a means for dominant manufacturers to achieve and maintain power of monopoly? If we analyze GPO practices under antitrust law, we may be able to get an answer. GPOs deal with suppliers on behalf of the organization that hired them. The purpose and benefit of a GPO is to strengthen the purchasing power of its member organizations. By strengthening their purchasing power, organizations as a group are able to negotiate better terms with suppliers, including pricing, than they could obtain individually. This benefits both sides of the transaction, as organizations get a better price and the supplier is assured of well-constructed volume. It is loosely estimated that by using a GPO, organizations save much of what they paid for if they limited themselves to the same purchases. But critics say GPOs don't always offer the lowest prices to their members, who can sometimes save more on their own. They negotiate with suppliers and sellers; in fact, they don't buy anything. If a GPO cannot produce a sufficient level of sales through its contracts, it will not be able to achieve the best pricing for its members in the long term and will become useless as a means of reducing costs for its members. . This fact is a compelling and thought-provoking argument that drives GPOs to constantly seek new programs that deliver value...... middle of paper ...... an important and noteworthy reason for s Involvement in supply chain conduct is the response to competitive pressures and threats, both domestically and internationally. A high level of supply chain activities occurs when the strategies of individual companies match the strategies of the entire supply chain. Every company must recognize its work in the supply chain, the requirements of the end customer and how these requirements translate into internal operational needs and the requirements imposed on suppliers. Manufacturers are required to better supervise the supply chain and acquire better skills in manufacturing and logistics operations, while remaining responsive to changing market conditions and customer demands. And increasing complicated global contacts between suppliers, manufacturers, distributors, retailers and consumers bring together these pressures..