Supply Chain makes a difference through thick, thin and thistle

Nov. 24, 2021
Supply Chain Operations Worth Watching

For many hospitals and healthcare facilities, the last two years can be classified as nothing short of a thrilling but perilous roller coaster ride, complete with corkscrew twists and turns interspersed with steep and slow climbs, followed by deep and touch-and-go dives, courtesy of the COVID-19 global pandemic.

Some have told Healthcare Purchasing News that for this reason alone, every hospital and healthcare organization should qualify for its annual “Supply Chain Operations Worth Watching” recognition, now celebrating its 10th year.

To a degree, HPN agrees. Certainly, all healthcare organizations have earned and deserve a hearty salute as they have bobbed and weaved through patient care demands and supply chain demands against a growing tide of product backorders, clogs and shortages. Some argue that that’s their job anyway. No argument there. But the immense pressure placed on them to perform as if every day were a critical calamity is nothing short of extraordinary – both the Herculean and occasionally Sisyphean efforts, and the outlandish circumstances in which they were placed.

Not surprisingly, the pandemic shaped much of this list for the second consecutive year.

In that regard, HPN extends a heartfelt pat on the back and shoulder on which to rest for a spell with hopes that these last two years will prove a corrective, eye-opening, encouraging and resetting anomaly for the next century.

But for the sake of this decade-old feature culminating this month, HPN would like to shine a spotlight on 10, bringing the overall total of watch-worthy organizations to 120 since 2011.

Please note that once an organization’s Supply Chain department/team “makes the list” it remains “worth watching” unless it’s absorbed via merger or acquisition, in which case it’s possible for the “new” crew to make the list (if nominated, of course) under the “new” name because they may be accomplishing more “new” things. For the running list of 120 Supply Chain Operations Worth Watching, visit HPN Online.

Here’s a glimpse at HPN’s latest Supply Chain “Elite” lists, in alphabetical order by name, for highlights on what they’re doing and why they matter. What’s noteworthy among this group is the business creativity and decision-making during the pandemic that expanded the traditional boundaries of healthcare supply chain.

Supply Chain Elite

Bayhealth, Dover, DE

The ideal within information technology circles centers on total integration and interoperability within an enterprise. Bayhealth’s Supply Chain team has applied that approach to operations and the relationship between Supply Chain, Sterile Processing and Surgical Services. In short, the process linking this trio of departments is built on mutual respect and trust generating from a complete and comprehensive reengineering project that resulted in elevated service levels and performance improvement. With a blueprint and charter rooted in customer service, data management, education and training and workflow improvement, Supply Chain succeeded in breaking down most, if not all, barriers among the three departments to the point that the Sterile Processing team earned a national award in recognition of its performance that was supported by the OR all the way up to the C-suite. If anything, the success here demonstrates the next-generation Supply Chain team as the process facilitators they seem destined to become as standard fare.

CentraCare Health,St. Cloud, MN

CentraCare Health may represent an integrated delivery network (IDN) that operates eight hospitals serving the rural communities in central, west central and southwest Minnesota but it performs as keenly as a well-oiled suburban system. CentraCare’s facilities, spread throughout a sprawling area, recognized early on the value centralizing supply chain operations among its systemization strategy of evolving as a single, cohesive enterprise. Within that “common culture,” CentraCare emphasizes “consistent collaboration” between its supply chain sectional duopoly with Contracting & Procurement (negotiating, selecting, sourcing, procuring and data management) working parallel with Logistics (perpetual inventory management, unit-level supply chain management, receiving and couriering), aligned by contract categories in a model that makes sense for the organization type. They centralized their enterprise resource planning (ERP) system to Oracle, which has fueled growth in electronic ordering, replenishment and workflow management, but also retained bar-coded two-bin Kanban PAR locations. They are specializing in purchased services, which they call “strategic services,” and are widely regarded as the system’s “contracting experts” from the C-suite on down. They even actively participate in provider recruitment, working with physician candidates from the beginning on supply chain protocols.

Cone Health, Greensboro, NC

The Supply Chain team – specifically Clinical Value Analysis and Strategic Sourcing – at Cone Health didn’t wait for the pandemic in early 2020 to develop a system-wide quality improvement process. They implemented it three years earlier, using Hurricane Maria hitting Puerto Rico in 2017 and disrupting supply lines, to reinforce that business as usual going forward would be most unusual. Working with clinicians and administrators they developed the “Product Disruption Tracker” whereby Supply Chain, pharmacists, physicians and nurses worked together to identify and locate product alternatives when crises or disasters threatened access for their hospitals and outpatient clinics. They set up a color-coded product-related warning methodology as a communication mechanism and established a “Product Availability Alert” system they would during the next several years to deal with product shortages due to manufacturing issues (including raw materials access, sterilization challenges) and also to source personal protective equipment (PPE) and assist in purchasing decisions and staff education during the pandemic. The Product Disruption Decision Committee developed a vendor vetting process to ensure that products are certified and verifiable from alternative, non-traditional supplier pools. To infuse the process with some levity, they would hold PPE fashion shows to test and demonstrate PPE comfort levels of new products.

Ochsner Lafayette (LA) General Medical Center

Ochsner Lafayette not only had to contend with the pandemic aftershocks, but also an “incredibly active” hurricane season and “record-breaking” freezes to ensure its facilities maintain access to needed products and a flexible supply chain. Ochsner Lafayette also served as a COVID-19 vaccine storage and distribution hub for the region as well as a vaccination center for a community of tens of thousands overseen in part by Supply Chain and Pharmacy leadership. This involved detailed planning for vaccine receipts and adequate storage, including the requisite freezers. The facility also forged supply chain partnerships with three oil and gas suppliers in the region to piggyback on commodity ordering to fill supplemental gaps for PPE products and other essential supplies. Supply Chain relied on its infection prevention specialists to help determine the quality of products brought in from alternative suppliers to meet demand spikes. Through it all, they were able to expand and open additional community clinics to serve patients.

Penn State Health, Hershey, PA

As the pandemic caused raw fill rates to plunge to 70% to 90%, Penn State worked out a sweet deal to house all of the additional product Supply Chain would have to procure. Penn State partnered with nearby The Hershey Company, which donated 22,000 square feet of new warehouse space, along with six full-time employees who worked at the Chocolate World warehouse. Thanks to this infusion of space and talent, Penn State’s Supply Chain team was able to get the new warehouse operation up and running within nine days to store such essential items as disinfectant wipes, hand sanitizer and PPE. This also enabled Supply Chain to concentrate on sourcing products and maintaining safety stock for physician practices and critical items for the hospitals and clinics. This included a 30-day safety stock and a 90-day pandemic stock to provide some slack should backorders and shortages tighten supply lines. They also were able to support an additional 245 long-term care and extended care facilities in south central Pennsylvania with their supply chain needs.

Sentara Healthcare, Norfolk, VA

Through a series of provider partnerships, collaborating with physicians and surgical staff to clinically integrate supply chain with demonstrated outcome measures, and using group purchasing contracts, Sentara is booking more than $31 million in supply chain and pharmacy savings in 2021. Working with two other provider systems they have built a process that concentrates on specific commodities and service lines to drive greater contractual savings. They also are improving purchased services sourcing and contracting to enable more efficient regionalized support and service metrics throughout the enterprise. Sentara has implemented a more progressive supply chain platform, starting with a dedicated Supplier Diversity Executive Council chaired by the system’s Supply Chain leader. They are targeting $6 million in spending to go to qualified smaller, minority-owned and managed and veteran-owned and managed suppliers. They also are providing quarterly educational sessions for smaller suppliers to help them operate more effectively and efficiently with requests for proposals and other supply chain-related transactions, tactics and strategies.

South Broward (FL) Hospital District d/b/a Memorial Healthcare System

If a “Worst Timing Ever” award were given for trying to engineer wholescale organizational and process improvements at the onset of a pandemic, hurricane prep and a massive product recall, Memorial Healthcare System might be a finalist. Being led by a seasoned data-specializing supply chain executive who arrived from an HPN Supply Chain Department of the Year winner, however, certainly emboldened this team to bob and weave through one crisis after another successfully, like that pivotal “flying cow” scene in the 1996 film, “Twister.” Facing a surgical gown recall as the pandemic hit didn’t help the process of centralizing operational functions to eliminate the supply chain’s historical fragmentation with “shadow” operations in many areas, including the Operating Room. But they navigated through alternative suppliers, non-palletized trailers, large shipments and space constraints to reorganize their storage and warehouse footprint. The kicker? The warehouse team consisted almost entirely of physical therapists, rehabilitation therapists, fitness instructors and coaches within the system who had little to no experience in supply chain and had to learn on the job and during a crisis. MHS also was tapped by the state to serve as one of five healthcare systems to serve as a cold storage and distribution hub for COVID-19 vaccines, which meant gearing up with hard-to-find ultralow-temperature freezers, and as a “Vaccine Village” by converting a conference center into a Vaccination Center administering 1,000 doses daily without hiccups.

Spectrum Health, Grand Rapids, MI

This long-standing Michigan IDN, itself a fusion of two prominent heritage healthcare systems, simply wasn’t satisfied with the status quo and has been punching through annual savings targets for several years now with 2021 potentially reaching their highest level yet. Systemwide Supply Chain has migrated its influence into a growing number of areas that previously had been outside its purview, such as facilities and purchased services, and has infused its ranks with leaders and staffers from outside healthcare to introduce new perspectives on internal operations. They’re also making headway with the clinical community, linking their Workday supply management software with the Spectrum’s Epic clinical management software, implementing risk management agreements with selected clinical device suppliers (including Medtronic) and enabling the Value Analysis teams to represent Spectrum clinician interests as well as coach current and prospective suppliers on how to work with Spectrum in sharing risk and reward. Spectrum’s Supply Chain team also has been working with the Healthcare Industry Resilience Collaborative on advanced fulfilment and delivery processes against the backdrop of crises and disasters, including event model monitoring, supply chain mapping and resiliency scorecards between providers and suppliers. They’ve hired their first demand planner with three dedicated inventory buyers within their distribution center that leverages Workday’s software capabilities with data and operational consulting expertise from Tecsys.

Stanford Health Care

While some healthcare organizations may have used the pandemic to scramble to develop or reset crisis/disaster plans, Stanford’s Supply Chain team used it as a divining rod to assess status quo vendor performance, legacy contracts, negotiating standards and outmoded operational practices with the notion of retooling, if not utterly transforming just about everything. Searching for incremental improvements simply wasn’t enough. Stanford reached back to the global suppliers of raw materials through its manufacturer-produced and distributor-delivered products contracted through its group purchasing organization Vizient. In short, everything was on the table for discussion and fair game for observation and renewal. They didn’t just think outside of the box either. In fact, they tossed the box. They physically relocated their Assistant Director of Category Management in Asia for him to develop and secure entirely new and sustainable product pipelines. They retained an import agent to deal with customs, shippers and airfreight carriers. Stanford now sources products from five of the globe’s seven continents to minimize regional supply disruptions. They synchronized supply chain relationships between clinical customers and the contracted suppliers via elevated fill-rate expectations with rewards and penalties, risk-sharing arrangements and stratified sourcing streams in a way that elevates non-labor expense management to an art form fueled by science. To offset product shortages, Stanford worked closely with internal and external resources. They partnered with Carbon3D and Resolution Medical to design and 3D-print needed products, such as sampling swabs, and worked with on-campus imaging and 3D engineers to scan and manufacture hundreds of repair parts for essential devices. They worked with Lockheed Martin to design and manufacture isolation gowns and leveraged the talent of Stanford’s internal reference laboratory scientists to self-manufacture test media for COVID-19 tests.

Virginia Hospital Center, Arlington, VA

Amid the COVID-19 pandemic, Virginia Hospital Center strove for what they called an “audacious goal.” They were weary of being on the “wrong side of the power balance” and wanted to “reclaim the balance of power.” Part of their efforts included sourcing products from alternative means, including out-of-state warehouses, a fast casual restaurant and a garbage bag factory in El Salvador, which was retooled and workers retrained to make gowns. Internally, they reorganized the contracting function to centralize supplier options (with Medline as their primary distributor) and improve data management for physician preference products via Kermit expense management software that generated nearly $4.3 million in savings. They also used BlueBin inventory management software to implement a Kanban system to eliminate ordering and stocking variance. 

Visit for links to past winners.

About the Author

Rick Dana Barlow | Senior Editor

Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].