Since 2017, Dartmouth-Hitchcock Health’s Supply Chain philosophy seems to have reflected the art and science of creating structure with LEGO blocks or Minecraft: If you build it success will come.
To Curtis Lancaster and his Supply Chain division team at the Lebanon, NH-based integrated delivery network that pokes into neighboring Vermont, Supply Chain as a category, descriptor, function and even title may not accurately befit what they do anymore.
In fact, they’ve punched through the traditional stereotype of simply moving boxes of stuff by pursuing and embracing deeper and more meaningful roles such as strategic planner, sourcing enabler, margin-enhancement deliverer, demand-planning innovator, communication facilitator and administrative ace-in-the-hold for the C-suite. They have remodeled and reconstructed their infrastructure around a quartet of performance improvement pillars of operation: people, technology, trade and innovation.
Four years ago, an academic medical center and teaching hospital anchored a loose federation of hospitals and clinics that lacked a cohesive supply chain engaged in many decentralized activities, according to Lancaster. Since then, they have centralized and vertically integrated supply chain activities that increased value system-wide and extended savings regionally.
“It’s been our mission to look and act like a system,” Lancaster admitted. “Each of our sites had their own independent supply chain, and we have worked hard to pull together as a system supply chain supporting each local business unit/system member.” Dartmouth-Hitchcock also is one of the founding members of a regional purchasing collaborative called Northeast Purchasing Coalition (NPC) and leads supply chain initiatives and sourcing with local vendors for an alliance of more than 25 hospitals in New Hampshire and Vermont called New England Alliance for Health (NEAH). Dartmouth-Hitchcock accesses many supply and service contracts and initiatives through Vizient.
The Dartmouth-Hitchcock Supply Chain team doesn’t take whatever lessons learned and success achieved from their demand-planning process and COVID-19 response for granted. They continue to scan the horizon to justify their mantra and motto to “think different” and “support the hands that heal.”
For these reasons and their relentless pursuit of what’s next, Healthcare Purchasing News selected the Dartmouth-Hitchcock Supply Chain division as its 2020 Supply Chain Department of the Year.
People matter
Five years back the Supply Chain department at Dartmouth-Hitchcock functioned more like an extended-stay truck stop, a place where professionals entered to freshen and refuel their career goals before venturing to another area on the next leg of their occupational journey. The recurring tactic wreaked havoc on consistency as hiring and retraining to attain the desired effectiveness and efficiency occupied daily activities.
To morph into a nimble visionary team from a dysfunctional reactionary group required dedication, effort and time, starting with recognizing people as the impetus for and operator of redesign and technology use, and integrating people at every turn within the organization’s strategy.
Under Lancaster’s leadership, the Supply Chain division established people as a key pillar of the organization’s strategic plan in a roadmap for a dynamic group that gained leadership traction and visibility by turning challenges to opportunities and progressing through creativity. From this developmental progress, “we were at the table now,” he noted. When referring to Supply Chain’s pandemic sourcing, even their CEO remarked that the team “made a real impression – really phenomenal.”
As the team advanced, Lancaster points to key skills that were honed and tested, such as “scheduling as it creates the demand signal; perioperative where product knowledge and use is critical and where scheduling and logistics are critical success factors. And, let’s not forget system management where our recent experience leading through a crisis can be applied to leadership positions,” he said.
If anything, they strove to become a group that could perform daily with grit and skill to handle whatever faced them, even a once-in-a-century pandemic that disrupted everything, he reflected.
“[COVID-19] confirmed we had what it took. In many industries you drill and practice so that you will be prepared for a future event,” Lancaster told HPN. “Firefighters drill and prepare for when the fires come. Sports teams practice and prepare for the big game. As Mike Tyson explained in preparation for a boxing match, ‘Everyone has a plan until they get punched in the mouth.’ The pandemic punched us in the mouth … repeatedly. We learned that the mindfulness and resiliency we worked on, the communication and trust in each other kicked in like muscle memory. We trusted each other. We worked well together. The strategy directed us toward our goal, even in crisis: helping the hands that heal. Our ops director was in incident command and helped harmonize all our efforts.”
The onset of COVID-19 not only tested their resolve but amplified and showcased their 2019 game plan execution as they embraced their motto to “support the hands that heal.” Daily distractions came fast and furious, Lancaster added.
“Oftentimes people are viewed as cogs in a wheel when they are actually the grease that keeps things spinning,” he said. “This old mindset comes from the belief that supply chain is a transactional exercise and not a strategic pursuit. There is also a tendency to look forward and outward for the next enhancement and improvement and not keep the focus on developing and mentoring the teams.”
Traditionally, Supply Chain remained invisible and invited attention when something went wrong, according to Lancaster.
“Good things [can] go unseen and bad things make the loudest sound,” he said. “We rarely were recognized for the work we did, much like a lightbulb isn’t noticed until it is burned out and doesn’t do its job.”
Because Supply Chain had been operating in consistent performance improvement mode for several years, the emergence of the coronavirus and its escalation into a global pandemic that slammed national, regional, state and local supply chains, didn’t ignite a crisis for Dartmouth-Hitchcock’s Supply Chain team. They were fortified strategically and ready to act.
“Our response to COVID allowed us to shine,” he said. “We succeeded in meeting the needs. This was recognized throughout our system, including by our CEO. While a recent event, it echoed the path we were on to change the perception of the organization.
“Consistency and dependability matter to our customers,” Lancaster continued. “Things don’t change overnight; however, working with leadership and front line staff to best support them shows through action our team cares, that we listen. By doing this we gain buy-in for our initiatives or enhance understanding when errors are made.”
New roles, narrative
Strategically, Supply Chain created several new roles to fortify and manage through data analytics. The most dramatic change in roles, per Lancaster? The Demand Planner position, which came just in time for the coronavirus.
“We created it from scratch, applying what we learned from other industries balanced with what we needed to serve our trading partners,” he noted. [For more on Dartmouth-Hitchcock’s demand-planning process, read ”Demand-planning strategies predate pandemic, but produce perseverance” on page 16.
New positions also include a business manager to choreograph the data analytic work and reporting that is disseminated throughout the division; fully focused program managers Rosa Angulo and Claire Nerenz to specialize in selected areas, such as pandemic preparedness and regulatory compliance, and not double up for these tasks in addition to their regular jobs; dedicated legal counsel to facilitate the contracting process; an Item Master “master;” more analytically oriented specialists on Robin Boylston’s technology team, Lancaster listed.
Other new roles include professionals supporting the reprocessing of N95 respirator masks and the logistics of distributing the reprocessed respirators both internally and externally to system members; staff like Adam Stewart, who worked in a new forward-stocking location to satisfy the needs of critically-short supplied products while still rationing to ensure control over the supplies; staffing a new offsite warehouse that stocks product in bulk to be distributed to system members, the organization’s Service Center and NEAH members. “Lastly, we are performing scheduled rounding led by Operation Manager Hunter Fifield with the clinical team, who are directly supporting COVID-19-positive or -suspected patients to ensure proper PPE supplies,” he added.
Supply Chain created a marketing narrative that told their story. “This allowed for stakeholders to truly see what we did – at least on paper,” he said. “Our actions had to and did reflect the document. Readers seemed to gain an appreciation of the scope and challenge of our work. When you know the light is going to come on when you flip the switch, you don’t carry extra light bulbs around with you just in case. You know it is going to work, perform its function and provide illumination.”
Supply Chain also knew to initiate and develop partnerships with clinicians – doctors and nurses on the front lines and in the surgical areas. Preparation drove progress, according to Lancaster.
“We worked with [Dartmouth-Hitchcock] leadership to bring a part-time medical director, Dr. Shane Chapman, into the supply chain to help us better connect with physicians,” he indicated. “We focused on analytics to make sure we came to meetings with accurate financial data, clinical data and evidence-based research. We conducted one-on-one meetings with key service-line leaders to discuss opportunities, collaborate and build trust. We did this before any group meetings. Our staff joined many of the clinical and safety committees to make sure we were aware of emerging needs and articulate the help we could provide. Finally, we expanded Krista Merrithew’s value analysis team with additional registered nurses.”
Technology in rotation
When it comes to technology adoption and implementation, supply chain departments tend to fall into three distinct technology groups, indicated Richard Casano, Director, Supply Chain Operations.
The first reflects a group with not enough technology to be anything but reactive; the second possesses too many technologies that muddy the water, causing more confusion than clarity; and the third maintains the correct amount of technology to grow deep expertise and skill, he explained. They gravitated to No. 3, but acknowledged the ease to languish within No. 1, and become seduced and trapped within No. 2, making escape a challenge.
“I have colleagues who have every tool under the sun,” Lancaster said. “However, the tools don’t align to support an overall analytics strategy. Data and analytics are pillars of our strategic plan. Data should inform decision making; inform your course towards the beacon. And, you’ve got to fully use what you have. That means learning the tools, spending time with it, experimenting.
“Too many technologies can seemingly compete with each other,” Lancaster continued. “Teams can lose track of which technology is specialized in which arena or why they have it in place. If the technology is placed and never used or they compete and have conflicting data, the worth of the product is completely lost. Our team escaped this cycle by gaining support from senior leaders and clinical teams by listening to what their focus is, aligning our mission and vision statements with technology that will enable best practice, patient and employee satisfaction. Icing on the cake is always cost savings and increased value.”
Trade involves relationships
Dartmouth-Hitchcock’s Supply Chain division applies the term “trade” as shorthand for interactions among internal stakeholders, such as clinicians and patients, as well as with external partners, such as manufacturers and distributors. Some might classify this mindset as customer service, but Lancaster’s team plants it into their strategic plan as a foundation to “interact, process, benefit.”
For example, for the last several fiscal years, Supply Chain has exceeded its financial goals, contributed to enhanced margin and a healthy bottom line as well as integrated value over preference in product selections through clinical collaboration, data analytics and fiscal stewardship, Lancaster indicated. In fact, through data analytics the team identifies safety issues and leads efforts to reduce errors. One example is RASH, an acronym for “recalls, alerts, shortages/substitutions and hazards.” Still, Supply Chain remains “fully ingrained” in product and service decisions, safety, service and productivity directly and indirectly, he added.
Supply Chain’s Capital Equipment Manager Bob Simms actively serves on the Capital Committee for sourcing, analysis and contracting. Lancaster represents Supply Chain on the FTE Committee, which covers services contracts.
Focusing on value over preference can be difficult, according to Krista Merrihew.
“Getting stakeholders, specifically clinical stakeholders, to understand that we are striving to act as a system both financially and clinically is a challenge,” Merrihew admitted. “We want patients to have a consistent, customer-oriented experience when in our facility. Patients are more aware, perhaps more than we realize, and very cognizant of the products used on and in them. Consistency of products creates for a consistency of experience. With clinicians, we share financial and evidence-based product research to support sound decision-making.”
Supply Chain meets monthly with the certain clinical chairs to collaborate on product and vendor decisions.
As an example, by keeping close watch on contract terms and conditions, especially expiration dates, as well as collecting ample financial and clinical evidence on orthopedic and spinal products, Supply Chain was able to justify and rationalize discussions and efforts on product and vendor selection, according to Merrihew. Moreover, they “met individually with physicians in order to understand their needs and thoughts outside of a group environment, worked with Perioperative Services to understand the operational changes that may be impacted by a product change and worked to build a strategic relationship with the vendors,” she noted.
Working together in an academic setting with the orthopedics chair, they achieved a sole-source agreement for hips and knees, and narrowed the number of spine product vendors to two, which alleviates clinical product variation and reduces costs.
The organization’s Medium Impact Supply Chain Committee functions as a value analysis team for items costing $50,000 or less. The MISC includes physicians, other clinicians, clinical engineering, safety and finance professionals. Shane Chapman, M.D., serves as the official Supply Chain Physician liaison, according to Merrihew. Krista Merrihew, R.N., serves as Director, Clinical Quality Value Analysis (CQVA) and Strategic Sourcing. Together, they set CQVA agendas, call meetings and facilitate discussions.
The MISC discusses product requests brought to it in a standard format that includes clinical need, product efficacy, product cost, total cost of ownership, return on investment and reimbursement terms.
“It helps to have a physician assume such a leadership role when making clinical product decisions. It also helps that Dr. Chapman sees patients several times a week. It lends to the credibility of the position and department,” Merrihew added.
Collaborating with clinicians doesn’t have to be complicated, Merrihew insisted.
“Do what you say you will,” she advised. “Learn what they are trying to accomplish, set a strategy together and let them know you are trying to help them. Bring useful accurate data to the discussion, both financial and clinical. It also helps to hold one-on-one meetings with clinical stakeholders prior to any group meetings. This builds trust and collaboration.”
Innovation means business
Fostering innovation within Supply Chain required fomenting a new mindset that eschewed a risk-averse mentality, while building on fundamentals.
“If you place your hand too close to fire and get burned, you are hesitant to go near fire again for fear of getting burned again,” Lancaster noted. “In the supply chain, this mindset causes you to become entrenched in safe activities that have value but don’t have the contemporary or transformational outlook needed to support the clinical enterprise. Old school, transactional thinking with limited vision and no strategic plan are opposite of our mindset of embracing the improbable and challenging existing processes.
“This comfort also happened over time, supported by lack of understanding of the true value the Supply Chain can offer,” he continued. “Decentralized contracting and sourcing and lack of control over all supply chain functions led to lack of control and visibility of possible issues and unrealized value. Over the last few years our team has transformed through system methodologies, documented and supported [standard operating procedures] and trust within the organization at the highest level.”
Lancaster references a basketball analogy to explain their developmental, team-building strategy.
“You teach fundamentals like dribbling and layups before you introduce a no-look pass and three-point shot,” he said. “We set out to do both at the same time. What we lacked before was the ability to pull the team together in an organized fashion and conduct ourselves as the team. This meant realignment of the team; just like in basketball you don’t need ten centers, you need some forwards, guards and a point guard calling the plays and keeping the team focused. Stepping back and refocusing on fundamentals not only strengthened our output to our organization, but it also helped our team become closer, enabling us to see how we all support each other directly or indirectly.”
The team also recognizes its role extends well beyond supplies into other areas. For example, in purchased services, Supply Chain helped various departments save nearly $2 million in travelers’ costs – supplementary staff to augment areas that cannot hire in a timely manner – to human resources initiatives in insurance and benefits with more than $5 million savings realized or in process, according to Greene.
They track much of this through their financial dashboard, which incorporates their PeopleSoft MMIS ERP module, item master and SCWorx for benchmarking, and is shared with finance monthly and with the C-suite.
“We recognized our data is a source of truth throughout the organization and in multiple systems, and this became a priority for us,” Opolski said. “We work with SCWorx to cleanse and help maintain our item master. They also provide us with analytics like benchmarking and contract compliance. This was all enabled by a Data Governance structure and process we established when we embarked on the quest for a single system-wide item master. This governance included the creation of a Data Rulebook where rules for item descriptions and maintenance are memorialized.”
Supply Chain also inserted three staffers in the Operating Room to ensure product availability, address quality concerns and avoid expedited freight charges.
“They are actually Supply Chain Technicians we’ve taught to look out for supply issues, but also serve as customer service agents within Periop acting as navigators with the periop staff,” she added.
To more efficiently manage outdated equipment and capital replacements, Dartmouth-Hitchcock created a reverse logistics process for these “hidden assets.” Through this process they’ve sold used, functioning equipment that generated several hundred thousand dollars, according to Michael Ackerman, Strategic Sourcing Specialist. They work with auction brokers to sell to Third World healthcare facilities and also deal with smaller, budget-driven facilities in closer proximity.
“The project is in its infancy, but we are currently selling our capital and medical assets to five vendors,” Ackerman said. “We haven’t found one vendor that always gives us the best price, so we leverage all offers. We also sell and/or trade to our system members and NEAH.”
To gauge customer satisfaction levels with service provided, Supply Chain rolled out HappyOrNot’s survey tool to gain quick insights from a smiling face to a sad face at the push of a button, according to Casano. Their motivation? Formal meetings are not always conducive to the customer sharing true feelings, he indicated.
“We thought that real-time alerts based on how things are going throughout the day would be a nice way to hear the voice of the customer in a different way, Casano said. “It helped us to identify which units were having some concerns and also which time of the day so we could diagnose the problem. Was it a product availability issue, customer service, communication breakdown?, as examples. This allows us the ability to focus our resources where they are needed and to learn how to better connect.”
The lessons were enlightening.
“We learned that a nursing floor tech took the supplies from the clean supply room and moved them to supply carts at a certain time of day and then the clean supply room was empty of a few products,” Casano recalled. “This was a quick fix. Another time we learned there was a change in practice that caused product to run out and this alerted us to the problem. Anything that helps to increase communication with our customers and allows us close to real-time monitoring of performance means we can increase our ability to serve our customers. The better we support the clinical teams, the better the patient experience is. We are here for our neighbors, our friends and our family – those are our patients.”
