C-gulled?
Within the last 50 years Supply Chain
professionals has undergone numerous title lifts in an effort to boost the
credentials and credibility of the profession on an administrative – as in
C- suite – level.
Historically, it’s no secret that what we
now classify as Supply Chain Operations either served as a stairway to the
C-suite (we’ve seen Supply Chain Managers slide into the COO, CFO and CEO
roles) or as a dumping ground for pals of key executives and clinicians
and washed-up administrators needing second and third chances seeking to
reach pension age.
Over the years, Purchasing morphed to the
seemingly more professional Materials Management (or Materiel if you had a
military predilection) and a variety of familiar alternatives, such as
Material Services. During the Clinton healthcare reform years of the
1990s, the nebulous Resource Management emerged, slightly seasoned by
dashes of Expense Management. In the 21
century to date the more industrial-leaning Supply Chain continues to gain
momentum. Yet non-healthcare industries, by and large, still favor and
respect Purchasing, which tends to refer to insurance and payer topics in
healthcare anyway.
Nonetheless, it may be time to usher in a
title upgrade that charts, outlines and reflects the importance of Supply
Chain to healthcare delivery, including cost, quality and outcomes
performance.
Purchasing can connote the clerical
aspects of buying stuff for others; Materials Management (of which
Purchasing is a component) can represent storing and moving the stuff
around.
The new name should be something that
befits the second-largest expense category behind labor that touches
virtually everyone and everything in an organization.
As we plunge headfirst into the looming
Obama healthcare reform years Supply Chain most likely will account for
more than 50 percent of a facility’s expenses. How? Purchased Services.
Why? This segment will account for and include "outsourced" labor. Think
of it as a classic cost-shift accounting gimmick. Labor as we know it
involves salaried employees and direct-pay contractors. However, as more
clinical areas will try to reduce their budgets for more attractive
financial reporting they will cost-shift certain spending responsibilities
to Supply Chain (without necessarily ceding control of the purchasing
decisions).
As more suppliers hire clinical
practitioners who feel they can make more money with less hassle and
accountability (read: malpractice) on the vendor side, the clinical areas
will consider that outsourced expertise – a purchased service – which
should be Supply Chain’s bailiwick. To wit, I’m reminded of a keynote at
APIC’s annual meeting back in the 1990s where some savvy infection control
practitioners advocated the most expedient way to reduce the departmental
budget was to resign their salaried positions and be "rehired" as
contracted consultants. Brilliant. Supply Chain will and should oversee
this.
So without further adieu, let’s create a
C-suite position called the Senior Vice President of Purchased and Shared
Services who functions generically as the Chief Supply Officer (CSO).
The SVP of PSS would encompass the
product evaluation, value analysis, clinical product consulting,
contracting, purchasing, inventory and distribution of new and reprocessed
products as well as performance improvement consulting, for multiple
administrative and clinical departments in one facility or several. In
this ideal world, Sterile Processing would be removed as a Supply Chain
function and reside in a different more clinically oriented area.
In the May 2012 Fast Foreward I purported
it was "HAI-time" to elevate Infection Prevention and Sterile Processing
areas to the C-suite with an executive-level position of Senior Vice
President of Clinical and Environmental Sterility.
