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Copyright © 2012

People, Places, Processes & Products that Influence the Supply Chain

 
 

INSIDE THE CURRENT ISSUE

July 2009

People & Opinions


 

Worth Repeating

"While most think of materials management as a purchasing department, much of the day to day work conducted in materials management deals with quality assurance (QA) issues."

Dale Claytore, vice president
Mountain States Health Alliance

"By linking supply chain and revenue cycle data, health facilities can gain a deeper understanding of how high-cost-supply-driven departments utilize and capture supplies to ensure compliance and revenue capture and enforce mark-up strategies."

Kathy Schwartz, R.N., director, supply revenue operations, MedAssets Inc.

"In our experience, postsurgical wound care has been growing in total volume and sophistication as more advanced therapies have been used to treat greater numbers of patients with more complicated issues."

Terry Bromley, business unit director, negative-pressure wound therapy (NPWT), ConvaTec

"Consider storing supplies with price points over $1,000 to $1,500 in RFID carts. Out of about $1.2 million worth of inventory, one hospital customer has approximately $500,000 of their products sitting in four carts altogether."

Bob Potter, product manager,
technical solutions, Stanley InnerSpace

"We believe that the use of computer assisted counting is the most cost effective solution available today and also best complements the current AORN recommended practices relative to sponge counts."

Kari Cashmore, director of marketing and product management, Cardinal Health

Relationships drive transitional supply chain leaders

Fundamental philosophy not rocket science, but star-crossed

by Fred W. Crans, Nick Gaich and Ed Hisscock

In our inaugural offering concerning transforming the supply chain (in May
2009 Healthcare Purchasing News)
, numerous references were made to Star Trek — both the Original Series and the Next Generation. Why choose Gene Roddenberry’s creation as the vehicle for delivering the message of transforming the supply chain?

Because nothing is more apropos… Each of the five transformational elements — Relevance, Relationship, Responsibility, Rhythm and Rigor is present in every episode — but none more than Relationship(s).

For those of us approaching our dotage, while retaining the keen eyes, idealism and imagination of our youth, the Star Trek franchise represents a force of optimism in a world of greed, woe, poor operational performance and entrenched management philosophies. We are buoyed by the possibility of a hopeful future — one where our civilization advances and improves, and where people share and act upon a common purpose.

And what fuels that hopeful future is the blood of successful relationships.

The relationships required to effect change are many. They include:

  1. Relationship to mission

  2. Relationship to the organization

  3. Relationship to the customer (patient, user department)

  4. Relationship to suppliers

  5. Relationship to co-workers, both up and down the organizational structure.

Relationship to mission

Every healthcare organization has a mission statement. Examples include:

  • "We serve together in the gospel to heal body, mind and spirit…"

  • "To heal, comfort and care for the people of our community by providing advanced and compassionate health care of superior quality and value, supported by education and clinical research."

  • "To improve the health and well-being of individuals and to promote the sanctity and preservation of life in the communities we serve."

To many of the employees who work at the institutions whose mission statements are quoted above, the sentiments offered are either unknown or barely known. In the highly-effective organization, however, the mission to serve the greater good or at its simplest definition to personalize the care and treatment provided to individuals who are of need, stands as their organizational cornerstone shaping beliefs, values and ultimately their mission. In these organizations the statement itself serves as a rallying point galvanizing direction and relationships for each and every employee.

For the truly committed, the mission statement becomes a mantra that is imprinted on his/her heart, against which every possible course of action is weighed and measured. It becomes the litmus test for future actions.

And the ultimate evaluation of any healthcare organization is how it measures up — in the eyes of its staff, its patients and its suppliers — to its mission statement.

Relationship to organization

A person who understands and lives the organizational mission statement develops a relationship to his or her organization that is very different than that of (a) an employee who is just putting in the 40 hours per week to get a paycheck and feed a family or (b) an individual glory-seeker who sees the organization as a ticket to ride to personal success.

In the supply chain arena, this "relationship to organization" becomes instantly apparent. If the supply chain leader sees him/herself as a servant of the organization there is a high likelihood that the policies and practices developed and implemented will tie closely to the mission and values of the parent organization.

The supply chain is an element of the bigger entity, in each and every one of its elements, and must always compliment that larger body. To do otherwise is nothing more than a precursor to failure.

One great example of a supply chain operation that is in alignment with the parent organization is the 150 bed Finley Hospital of Dubuque, IA. Its leader is Jack Ditmar. Jack is a self-effacing man in his early 60s. He has no aspirations for personal glory; he comes to work every day to serve the organization by whom he is employed. Jack’s staff consists of seven employees, each of whom is fiercely loyal to the hospital. Because the department is so small the employees must be willing and able to perform each others’ duties if the situation demands.

And perform they do, often operating in two or more disciplines the same day. Ask Jack if he feels his staff has a strong relationship with the Finley Hospital and he will doubtless answer with an emphatic, "Yes!"

Relationship to the customer

The supply chain serves many customers. The Finley Hospital reference speaks to an organization whose staff has an excellent relationship with its departmental customers, but in healthcare, the ultimate customer is the patient, the raison-d-etre for the function’s existence.

It is not rare for supply chain members to keep the needs of the patient in mind. That relationship can be seen every time folks go to great personal expense to make sure that the patients have what they need when they need it, or when supply chain members will loan needed supplies to their competitors so their patients’ needs can be met.

When a supply chain worker establishes a "personal" relationship with the patient, the results can be astounding.

Carla was a long-term (18-year) employee for an Integrated Delivery Network (IDN) in the Midwest. While Carla performed her task in a workman-like fashion, she was not truly "engaged" with the organization’s mission. In an effort to boost her performance, her supply chain leader challenged her to deliver enough documented savings so the organization could purchase a capital item that was below the "approved" line. The item was a bone densitometry unit.

After being given the challenge, Carla’s work ethic and focus changed drastically, the necessary savings were quickly documented and the machine purchased.

The supply chain leader was flabbergasted and impressed. What he did not know was that for several months Carla’s family had been taking turns driving their grandmother to her bone scan appointment at a hospital 60 miles away. The challenge changed Carla’s relationship — not to a fictional patient, but to her own grandmother. That relationship having been established, the resulting benefits to the organization were swift and lasting, as was the way in which Carla framed her work. She no longer viewed her job as transactional. She was serving the community of patients who received care at "her" IDN.

Relationship to suppliers

To paraphrase the Kingston Trio: Throughout history, the people of the supply chain have rallied bravely whenever the price of stuff has been threatened. Today a new crisis has arisen. The Materials Transformation Association, better known as the MTA is attempting to bring a change in the way business is conducted in the form of aligned incentives with suppliers. Citizens hear me out. This could happen to you…

Sounds ominous, doesn’t it? Maybe even ridiculous.

Yet from time immemorial suppliers have been seen as the bad guys whose only goal is to maximize profits and lay waste to the landscape, while supply chain leaders have tried to paint themselves as the knight atop the white steed slaying the dragons of high price.

With a few exceptions, those times are so long gone that they can no longer be seen in the rearview mirror. The fact is that hospitals and IDNs need suppliers, and suppliers need hospitals and IDNs. For one thing, the game of post office that we played in kindergarten taught us about the opportunity for error in a person-to-person exchange. If we consider this in context of our traditional arms-length supplier relationships, it is a wonder that we do as well as we do at meeting customer expectations. When sharing supplants threatening as a strategy of choice, the value and knowledge gained can help both supplier and provider. Both have mission statements; both have employees who have strong ties to those mission statements and who want to serve their customers and neither can succeed without the other.

Instead of seeing the supplier as an adversary, the enlightened supply chain leader will view it as a company that purports to offer something the healthcare organization or IDN needs and will engage in free and fair interchange to determine the extent and efficacy of that supplier’s offering(s) as it relates to his/her organization.

Kid gloves will replace boxing gloves, and win-win will replace win-lose.

Relationship to co-workers

In 1982 a movie based on two of John Steinbeck’s novels, "Cannery Row" and "Sweet Thursday," was released. The movie focused on a marine biologist named Doc (Nick Nolte) and a bunch of characters, losers, ne’er-do-wells straight out of a John Steinbeck novel from the 1930s. While he got along well with the colorful lower socioeconomic characters, Doc, who was called that because of his Ph.D., had ended up on Cannery Row because he didn’t play well with big shots. Doc couldn’t establish good relationships upward.

Another character, a mildly challenged African-American man named Hazel (Frank McRae), learned all too well the daunting challenges of leadership when he was told by The Seer (Sunshine Parker) that he was destined to be the President of the United States. His fate troubled him to tears until he finally blurted out, "I can’t do it…gotta get someone else for President of the United States. I tried, I practiced, but I just ain’t got the poop. I’ll mess up the whole country!"

To get things done in the transformational supply chain relations must be present in both directions — up and down. Both leadership and workers must be engaged, encouraged, cajoled and constantly brought into the fold in order for things to go forward.

It takes time to build relationships and relationship skills, but they are so important.

As a supply chain leader and even as an organizational "agent of change" it must be clearly understood that fostering strong relationships both internal (hospital) and external (supplier-community) must always be job one. Why? Without support and ownership of the individuals you will entrust to either carry out or receive services delivered under your leadership the likelihood of long-term success is severely jeopardized. As we discussed in our earlier article regarding the importance of establishing relevance as the directional arrow for all to follow, the vital link in the journey ahead depends on the relationships you have fostered along the way. After all "going where no man has gone before" requires the cooperation of many in which Mission, Values and Relationships serve as the corporate compass.

If you saw the recently released "Star Trek" film, you realize that James T. Kirk was neither immediately loved nor trusted by his crewmates. He was brash and arrogant and appeared to think only of himself; he couldn’t listen — only talk.

Over time that changed, and he forms a bond with senior leadership (Bones and Spock) and with specialty folks (Uhura, Sulu, Chekov and, of course, Scotty) that time and again saved the universe. Why? Because of their relationships to their organization (Starfleet), to each other, to their customers (mankind), to their suppliers and most of all to their mission:

  • To explore strange new worlds

  • To seek out new life and new civilizations

  • To boldly go where no man has gone before

In our world we all believe and understand that healthcare is a very personal business in which we have all made very personal decisions to contribute and serve. For us serving in this profession, relevance and relationships are the vital links and our daily reminder to maintain the "human condition" as the center of our galaxy.

Fred W. Crans is area vice president, north and west, for ECRI Institute, and can be reached via e-mail at fcrans@ecri.org.

Nick Gaich is partner and Chief Strategy Officer, Appleseed Healthcare Resources, and can be reached at ngaich@appleseedhc.com.

Ed Hisscock is founding partner and CEO, Appleseed Healthcare Resources, and can be reached at ehisscock@appleseedhc.com.