2025 Supply Chain Department of the Year: Stanford Medicine

It’s that time of year again when Healthcare Purchasing News celebrates the Supply Chain Department of the Year. 2025’s winner is Stanford Medicine. Stanford Medicine showed immense success and we’re very pleased to present this honor to the team.

It’s known that healthcare supply chains are under immense pressure to do more with less and Stanford Medicine emerged as an innovator in 2024, showcasing an unmatched commitment to digital efficiency and innovation. Although many organizations are on digital transformation journeys, Stanford tackled three deployments all at once:

• AI enabled Contract Lifecycle Management (CLM),
• Enterprise Resource Planning (ERP) tool in the cloud, and
• A proprietary Procedural Analytics tool

Transforming Contract Management with Contract Lifecycle Management

As Stanford Medicine expanded its operations, the need for a more effective contract management system became increasingly urgent. The cumbersome legacy systems in place led to lengthy contract drafting times and a lack of visibility into contract performance. With over 4,300 contracts to manage, the organization recognized that a streamlined approach was essential for enhancing operational efficiency and driving significant cost savings.

The strategic decision to implement a CLM was a game-changer. However, the journey was not without its challenges. Ensuring that all stakeholders were comfortable with the new platform was paramount. Many team members were accustomed to outdated systems, making the transition to a more automated and integrated solution daunting. To facilitate this change, the Supply Chain team took on the Change Management with our 1,300 customers and rolled out a comprehensive training program, complete with hands-on workshops and ongoing support, empowering staff to embrace the new CLM tool with confidence.

Integration posed another significant challenge. The team worked tirelessly to ensure that the CLM connected seamlessly with existing workflows and systems, requiring meticulous planning and collaboration across departments. The result? A smoother integration experience that has transformed contract management at Stanford Medicine.

The benefits of Icertis have been nothing short of remarkable. Contract drafting times have plummeted from an average of eight days to just one day, enabling faster turnaround and improved responsiveness. With advanced features that leverage artificial intelligence, Icertis has streamlined the entire contract lifecycle, minimized errors, and ensured compliance with organizational standards. The tool’s AI integration that ensures supplier compliance with contractual terms is projected to generate an astounding $11.6 million in savings through rebate optimization and enhanced service credit realization.

When asked about the desire to use an AI enabled platform for the CLM, Sree Duggineni, vice president of Strategic Sourcing and Supplier Relations, and Omar Devlin, executive director of Supply Chain Systems and Analytics, said, “The true return on investment of our new CLM system comes from the seamless integration between the AI enabled CLM and ERP. The tool actively monitors contract performance in real time through tracking and verifying obligations, tiered pricing, rebates, and KPIs, without the need for extensive staffing. By automating the review process, we can efficiently manage thousands of contracts across multiple Stanford Medicine entities, each containing several clauses related to rebates, price breaks, early payment discounts, and performance-based incentives.

“The AI-enabled CLM technology not only addresses this complexity but also reduces the necessity for a large workforce to oversee these activities. Furthermore, it enhances the accuracy of fulfilling contractual obligations, primarily through the transformation of contract data into actionable insights.

“Our CLM leverages AI to facilitate this transformation, converting contract data into business rules that optimize contract management. Their AI-driven analytics empower users with valuable insights, fostering improved decision-making and ultimately driving better business outcomes and stronger supplier partnerships.”

Amanda Chawla, Chief Supply Chain Officer, commented, “Stanford Medicine Supply Chain has been on a multi-year transformation journey, with technology enablement as one of its core pillars. We have been intentional in our governance, design, and selection of solutions and partners, as well as in the advanced analytics development work. Artificial Intelligence is a pivotal tool in our toolbox, one that we are leveraging to bring forth automation and insights, thereby advancing our operations and enhancing efficiency. AI is a critical component to our sourcing and contract compliance strategy bringing forward visibility to allow for better controls, monitoring, and providing insights. By embracing advanced technologies, we are not just improving our current operations; we are evolving the way in which healthcare supply chain operates. This journey is about more than just technology; it is about transforming our approach to supply chain management and driving excellence in delivering all the ‘rights’ to the healing hands that care for our patients.”

Duggineni noted challenges during the implementation of the CLM by saying that “The implementation of the AI-enabled Contract Lifecycle Management (CLM) system presented several key challenges. One of the primary hurdles was achieving stakeholder alignment and securing buy-in regarding the benefits of the new system, particularly in demonstrating the anticipated return on investment (ROI). It was essential to convey the value of the CLM to various stakeholders, which required a clear articulation of its advantages and potential impact on operational efficiency.”

Further, she added, “Driving consensus among multiple operational groups regarding standardized workflows and business requirements proved to be a complex task. Each group had its own established processes, and harmonizing these disparate workflows into a cohesive system necessitated extensive collaboration and negotiation.

“The design, implementation, and training of the AI module also posed significant challenges. This aspect of the project was particularly unique, as it required the Supply Chain team to effectively communicate their requirements while also quantifying the value derived from the AI integration. The learning curve associated with this process was steep, yet it provided invaluable insights into the intricacies of AI-enabled platforms and their application within contract management.

“Throughout the implementation,” she said, “the Supply Chain team worked closely with Stanford’s Information Technology department, specifically the Technology and Digital Solutions (TDS) team. This collaboration was crucial in navigating the complexities of a system designed to meet the diverse needs of three distinct hospital entities: the Adult Academic Medical Center (AMC), the Children’s AMC, and a community hospital. Despite these initial challenges, which we call the ’growing pains,’ the organization stands to benefit significantly from the visibility and insights the CLM provides.”

Streamlining Operations with the Cloud ERP

Stanford Medicine’s Supply Chain team worked in two different on-prem ERP systems for decades. When Stanford made the decision to change ERPs, they did so by consolidating into one technology system, having all 6 entities on one technology for the first time. This monumental shift, planned as early as 2021, aimed to create a more integrated approach to managing financial, supply chain, and human resources functions.

The implementation of a single cloud-based ERP was a significant undertaking, fraught with challenges. Aligning stakeholders, processes, and policies across various entities was crucial, as many team members were accustomed to their own ways of working, and the ability to customize their workflows to the needs of each individual entity. With the guidance of their system integrator, Supply Chain took a leadership role within the project, in collaboration with Finance, HR, and IT, facilitating a unifying change management team to bring all the stakeholders together with a comprehensive change management strategy that included extensive training programs and ongoing support. They hosted an astounding 32 change champion events and held a user experience testing day that included 14 modules, created 33 trainings and 289 job aids, and hosted 135 hours of office hours to ensure a smooth transition.

Data migration was another critical hurdle. The team meticulously ensured that all relevant data from both legacy systems was accurately transferred to the single system, maintaining data integrity and enabling the organization to fully leverage the new ERP system. The results have been transformative: improved data governance, streamlined Procure to Pay processes, and enhanced operational efficiency.

The new cloud-based ERP provides a user-friendly interface and robust reporting capabilities, empowering staff to access critical information quickly, facilitating better tracking of inventory, procurement, and financial data. The integration of the Supplier Portal has further enhanced supplier engagement, simplified vendor onboarding, and improved communication. This digital platform has significantly reduced the administrative workload on the Data Management team, allowing for more efficient management of supplier relationships.

Katie Dean, vice president of Strategic Programs and Business, commented, “Coordination was one of the most complex parts of the project. There were many structures surrounding the project to ensure all teams and workflows were in lock step. We applied foundational principles: definition of ownership of activities, open and honest communication, frequent collaborative meetings, and a strong sponsor group consisting of our C-suite leaders. At the end of the day, we had to be able to work out any differences. It might sound simple, but when we ran into barriers, we put the right people together in a room to determine the best path forward.”

When asked about governance, Omar Devlin, executive director of Supply Chain Systems and Analytics, said, “Data governance controls and ongoing monitoring are essential to ensure the accuracy and completeness of data. This ongoing work enables the data to be useful and effective for the business. Maintenance of the data is an iterative process that requires constant review of ‘Data Health’ and an understanding of the business processes that use this data to support decision making.”

Enhancing Decision-Making with the Procedural Analytics Tool

In its mission to improve clinical efficiency and reduce supply costs, Stanford Medicine recognized the need for a specialized analytics tool. Variations in supply usage during surgical procedures could lead to unnecessary expenses and impact patient care. To tackle this challenge, the organization developed the Procedural Analytics tool, distinctively tailored to meet its specific needs and enhance decision-making across clinical teams.

The creation of the tool required close collaboration between clinical staff, data analysts, and IT professionals to ensure effective integration of data from various sources, including electronic medical records (EMR) and supply chain systems. Gaining buy-in from clinical stakeholders was essential, and the project team conducted workshops to demonstrate the tool's capabilities and the potential benefits of data-driven decision-making.

The insights gained from the Procedural Analytics tool have been transformative. By allowing for a detailed examination of surgical procedures, the tool has identified substantial differences in supply costs among surgeons performing similar operations. This data-driven approach has enabled the Supply Chain team to identify opportunities for standardization and cost reduction, ultimately enhancing patient care by ensuring that clinical teams have access to the most effective and cost-efficient supplies.

Targeting $8M in savings, Procedural Analytics can yield multi-disciplinary insights leading to financial benefit, democratizing quality and patient outcome insights, unlocking supply and implant standardization, and shedding light on potential contract negotiation opportunities. For one specific SKU for one surgeon alone, about $700 of savings per procedure was identified from reducing unwarranted variation via procedural analytics pilot work, and a savings of $360,000 has already been realized from identifying contract pricing improvements alone with only 5 months from implementation.

When asked about the coordination for the procedural analytics tool, Chawla and Devlin said, “The coordination for the procedural analytics tool involved a comprehensive and collaborative effort that spanned over 18 months, engaging multiple stakeholders, including clinical staff, data analysts, IT professionals, hospitals, and supply chain experts. Integration with the clinical teams was not only critical to the development of the procedural analytics but also essential for a successful launch.

“This year, we have made significant advancements in this initiative, as our clinicians have come to trust the data. By partnering closely and being present at every step of the process, we have fostered trust and buy-in, leading to measurable results. This project marked the first time that clinical and non-clinical datasets were combined across Stanford Medicine’s organization, highlighting the importance of cross-collaboration in the ideation, build, exploration, and results phases. The engaged and supportive multidisciplinary team laid a solid foundation for navigating complexities, from service line viewpoints to interoperability and procedural practices, as well as the integration of utilization variation, sourcing, and contracting.

“This constant learning cycle, characterized by iteration and stakeholder feedback, enabled us to rapidly review which insights were most valuable to explore further, helping to prioritize the data team's focus on developing meaningful data relationships. Overall, while we have only scratched the surface of integrating supply chain optimization logic with clinical data insights, the journey has set the stage for continued progress and innovation.”

As for the insights gained, Nick Trzeciak, vice president of Supply Chain Operations and Logistics and Devlin, said, “Procedural analytics offers a unique view of the triad of metrics required to make the best clinical decisions; standards/volume of items used, quality of patient outcomes, and cost reduction. The purpose is to align all clinical utilization work to generate the best possible patient outcomes. Standing firm on the pillar of quality over quantity lets our clinicians engage in a healthier debate around documented data sets across multiple service lines and business units for a single holistic approach to patient care. The initial insights gained have been significant revelations into the variation of item use, the reasons behind that variation, and the collective willingness to solve macro level problems together rather than individually. Many hands make light work; or as we like to say at Stanford, One Team, One Mission, One Dream.”

Final thoughts

When asked what makes the team at Stanford Medicine so successful, Chawla asserted, “People are at the heart of our strategy and are the core enabler of our success. At Stanford Medicine Supply Chain, we believe that our greatest asset is our team. Our approach requires us to operate as one unified supply chain network, rather than multiple disparate departments. This philosophy fosters a culture of mutual support and collaboration, where each area leans on and supports the others. By working together seamlessly, we harness the collective power of our diverse expertise to achieve extraordinary results.”

Indeed, she added, “Collaboration is not negotiable; it’s required. Gaining buy-in upfront might feel like it slows you down, but it pays dividends in the end and even more so when everyone is aligned towards the common mission, objectives, and value proposition. Our team is successful at collaboration because we actively work at being a team; for example, years ago we mandated a collaboration day where all leaders at all levels regardless of where they physically work come together onsite one day a month to make real connections and work through intra-operational workflows. The emphasis on collaboration has led to the dismantling of silos and fostered teamwork, not only on major initiatives but also in our daily tasks. We encounter challenges, but our leaders are empowered to work together to overcome barriers.”

“We are deliberate about our communications, learning from both our mistakes and our achievements – whether they are small or significant,” she continued. “Celebrating milestones not only boosts morale but also reinforces our collective achievements and progress. Although our team is occasionally pushed to its limits, we acknowledge and celebrate that it is our people who drive success. By fostering a culture of teamwork and mutual support, we have built a resilient and dynamic team capable of achieving remarkable outcomes.”

As for words of wisdom for supply chain leaders, Chawla chimed in and said, “Any leader understands that the journey toward excellence is centered on self-awareness, emphasizing that it is less about the ‘what’ and more about the ‘how’ and the impact one has on others. Understand yourself – what motivates you to get out of bed in the morning, what energizes you, and what drains your energy. Recognize what you bring to the team (because it is, and always will be, a team effort) and how you can positively contribute to the overall goals and mission, especially since the work is not easy.

“Have the courage to not only have a vision but take the risks to take action on it; get your hands dirty in creating something that is so beautiful. Be intentional in your work, think about the scaffolding early on and design it – and continue to refine it as that will be the key to deliver results in a world and environment that is ever changing. Embrace change, differing viewpoints, and take things from the bench, from an idea, to the bedside. And lastly, your team is essential – they are the key – trust, support, challenge, listen, and empower them!”