We looked at industry models, picked the best practice and tailored it for our purposes. We wanted to tap into how industry did business and fit into the system of national inventories. For the food, clothing and medical supply industries, the emerging business practices are built on electronic data interchange and electronic commerce. The manufacturer is linked to the customer at the point of sale. In pharmacy the emerging best practice is the group buying association.
Hospitals pool their resources to get leverage.
They use a prime vendor to access the body of suppliers for the best price and rapid delivery. The prime creates the buying arrangements and establishes the conditions that facilitate purchasing by the association members. The institutional food industry is going to full service prime vendors. The industry previously consisted of small distributors organized by food type, such as dry goods and seafood. New companies like Kraft Food Services Division have evolved.