“If there’s not an agreement on a shared reality on what the data says, what it means, and how it’s actionable, you won’t be able to go down a path to a central control tower,” said Blankenship. “While you might have numbers in front of you, you're going to have different objective realities.”

That “shared reality” extends beyond the health system. Through collaborative planning, forecasting, and replenishment, BJC Health shares demand forecasts with suppliers and commits to responsible ordering during disruptions rather than placing inflated orders. The resulting trust encourages suppliers to provide better visibility into potential supply disruptions. 

For sourcing leaders, the broader lesson is that resiliency depends not simply on adding inventory or negotiating lower prices, but on combining reliable demand signals, transparent supplier relationships, and disciplined decisions about where and how products should be stocked.

Katie Korte, vice president, strategy & program lead, Vizient Reserve, described how the market intelligence informing those decisions has expanded:

“Organizations are looking much more closely at the underlying risk of the supply base before making sourcing decisions. That includes manufacturing locations, geographic concentration, production redundancy, critical raw materials and components, supplier capacity, quality history, regulatory activity, backorder trends, and business-continuity plans. They are also evaluating the impact of a potential disruption at the product and patient-care level.”

Christina Tosto, vice president and general manager for WaveMark Solutions at Cardinal Health, emphasized that visibility is only the starting point. She stated:

“The next phase is how we take the insights and turn them into action. It’s great to have all this information, but ultimately, you need to do something with it.”

Creating a shared view of supply chain data

At St. Luke’s Health System in Boise, the move to a new consolidated service center highlighted a familiar challenge: Critical supply chain information was spread across the enterprise resource planning (ERP) system, warehouse management system (WMS), and electronic data interchange (EDI) solution. 

The St. Luke’s team brought those data sources together through a control-tower platform, giving supply chain, pharmacy, surgical services, and other internal customers a shared view of order status and inventory. Instead of contacting supply chain for answers, users can now access the information themselves. 

John Barnes, senior director of system integration and planning, said the visibility has also created a common language: When users identify a problem, supply chain teams can trace it back to the source system and correct it. He stated:

“We’re increasingly de-siloing the data. Our solution partner Clarium is a control tower for us to bring our ERP system import data, our WMS data, and our GHX data all into one platform. We have democratized the data and put it in the hands of our customers who are not even supply chain employees, whereas before, they would have to ping us for information.”

St. Luke’s experience shows how bringing data together can create a common language between supply chain and its internal customers. 

From the supplier and technology perspective, William Sharp, president and CEO of ARC Healthcare Technologies, sees visibility as essential to addressing a broader problem: departments that continue to operate in silos. Sharp commented:

“The number of healthcare systems I’ve seen operating in silos is staggering. I haven’t encountered that to the same extent in other industries, including automotive and mortgage, where I’ve worked. I believe we need to move to a higher level of visibility because supplies impact everything, and the only way to achieve that is to understand what we’re using. Without the data, you’re just another person with an opinion. It’s difficult to have the conversations that need to happen unless you have the data.”

Fewer partners, deeper relationships

One theme emerging from interviews with our experts was a move toward fewer, but deeper, strategic relationships. That does not necessarily mean relying on a single supplier for every product category. Instead, health systems appear to be taking a closer look at which companies they consider transactional vendors and which ones they trust as long-term partners.

Tosto said she is hearing supply chain leaders talk less about vendors and more about partners.

“The relationship landscape used to be wide but not very deep,” she explained. “Healthcare executives, especially large IDNs, are being very judicious about the partnerships they are building. They are narrowing them down but going very deep in those partnerships. There is this transformation from ‘you are my customer and I am your vendor’ to ‘let's do something better together.’”

Deeper relationships also require providers and suppliers to move beyond negotiations focused primarily on products and prices. Bryan Bowles, vice president of corporate marketing for GHX, described how both sides must consider how they can work together differently, stating:

“I think the challenge is, can I get my supplier partners to show up differently? Can I show up differently to them? When we’ve got common ground, better measurement, and shared visibility, great things can happen.”

Common data is central to those relationships. Without it, providers and suppliers can spend more time debating whose numbers are correct than addressing the underlying problem.

“If you’ve got your data and I’ve got my data, all we’re going to do is argue about why ours is right and yours is wrong,” said Bowles. 

He pointed to clinical preference and bill-only products as one area where closer provider-supplier collaboration could have a significant effect. These products are often expensive and involve processes that are far more complex than those associated with traditional medical/surgical supplies. Better coordination could help improve operating room efficiency, procedural costs, and health system margins.

“You can’t do that inside your own shop alone,” Bowles explained. “You’ve got to do that with the right partners around a use case and a process that’s practical.”

BJC Health’s control tower work offers one example of how trust and information sharing can strengthen resiliency. The health system holds weekly collaborative planning, forecasting, and replenishment meetings with its top suppliers and shares demand forecasts to help both sides prepare for potential disruptions. 

During a hurricane-related disruption involving fluids, BJC Health communicated what it expected to need and emphasized that it would order responsibly rather than inflate demand. According to Blankenship, that approach strengthened trust and made suppliers more willing to share information earlier about potential supply disruptions.

BJC Health applies that collaboration to its inventory management strategy. The health system has set a target of approximately 60 days of inventory overall, with the ability to increase certain critical products to 90 days. Rather than placing emergency supplies in storage and allowing them to expire, BJC keeps those products moving through its regular inventory. 

Even with that additional protection, Blankenship cautioned how organizations “can’t just inventory [their] way out of” every supply problem.

From the GPO perspective, Korte said, “The assumption that organizations must choose between volume commitment and supply protection is becoming outdated. The market now includes resilient committed offerings that are intentionally designed to connect those objectives. We work with providers to commit to meaningful volume for certain essential medications and critical care supplies, which gives suppliers the confidence to manufacture and hold additional dedicated inventory.”

“In return, providers receive enhanced supply protections, such as additional U.S.-based inventory, contingency manufacturing, and stronger failure-to-supply commitments,” Korte continued. “The key is aligning the commitment with the right product and supplier strategy. For essential products with meaningful disruption risk, a committed-volume agreement should include resiliency requirements as part of the value proposition. When those standards are established with suppliers, providers do not have to choose between favorable economics and supply assurance. They can use their volume to help secure both.”

Pricing pressure shifts the focus to total cost

With product prices remaining under pressure, supply chain leaders are taking a broader view of margin improvement. The cost of a product extends beyond its purchase price to include the labor required to manage it, freight, excess inventory, cycle counting, and working capital. Stockouts, rush orders, expired products, and service failures add costs as well, particularly when employees must search for products or when procedures are delayed or canceled. 

Vizient’s projections illustrate where some of that pressure may be most pronounced. Korte stated:

“The greatest projected pricing pressure is currently in indirect spend and purchased services, with Vizient projecting 4.73% inflation for 2027. Within that segment, IT hardware and software is projected at 6.29%, construction at 4.70%, and food at 4.16%. Pharmacy also remains a significant area of pressure at 3.54% overall, with specialty and complex medications projected at 4.04%. Medical and surgical products are projected at 3.05%.”

Sarai VanderWood, founder of VanderWood Leadership Group, encouraged organizations to include those soft costs when developing the business case for automation. Labor savings may be the easiest measure to identify, she said, but they do not tell the entire story. 

“You need to understand what is causing the disruptions in your business and make sure you are measuring those causes in your business case,” said VanderWood. “Think about all the things that are making it hard to get the product to the patient as cost effectively as possible: Stock outs, rush orders, expiring products, excess inventory, or manual workarounds your teams have created to get the job done. Once you have included those,you will really move the cost curve.”

BJC Health provided an operational example of this broader approach. The health system is developing a cost-to-serve model that connects expenses – including inbound transportation, labor, warehousing, communications, and systems – with patient-care activity. BJC reported that rush lines declined from approximately 6-7% to less than 1%, a decrease attributed largely to its consolidated service center. 

Blankenship noted that the baseline was established around the COVID-19 period and may have been inflated. BJC Health is also examining when expensive overnight shipments can be replaced with more economical transportation without affecting service. 

Value analysis moves upstream in sourcing

Clinical involvement is equally important when health systems standardize products. Barnes connected that involvement with the complete sourcing process. If he could redesign one process, he said he would begin with high-cost clinical supplies and implants and carry the work “end to end” through supplier selection, purchasing, and measurement. 

Barnes described using procedural data and physician input to standardize products, select suppliers, and award contracts. From there, the health system could draw down existing inventory, obtain complete product information from suppliers, order appropriate inventory levels, and measure whether physicians and suppliers fulfilled their commitments. This approach connects the clinical decision with its financial and operational results instead of treating product selection as a separate step. 

As Sharp observed, “One of the hallmarks of a really well-run organization is that supply chain and clinical teams work hand in hand.”

Applying supply chain discipline to workforce contracting

Supply chain disciplines such as contracting consistency, standardization, and transparency can extend beyond supplies, equipment, and technology to workforce contracting, where decisions are often fragmented across clinical and administrative functions.

According to ProcureMed Alliance, fragmentation can leave healthcare organizations (HCOs) with multiple agreements and different terms with the same agency, and an information asymmetry. An individual HCO makes independent contracting decisions using primarily its own transaction history, while agencies operating across multiple HCOs may naturally have broader market visibility.

“Workforce markets are fundamentally regional,” said Craig Hershovitz, EVP of operations for ProcureMed Alliance.

Hershovitz added how common definitions and standardized contract terms can give HCOs more consistent external market context, and are designed to support aggregated, anonymized, backward-looking benchmarking and better-informed independent decisions.

ProcureMed Alliance (PMA) is an HCO-governed workforce market infrastructure that enables market-based RFPs, standardized contracts, and transparent benchmarking—while preserving voluntary participation, independent negotiation, and full fee disclosure.

PMA is a separate, independent legal entity. Participation is voluntary and non-exclusive, and each HCO retains independent negotiation and agency selection authority.

“Supply chain leaders are accustomed to disciplined contracting, standardized terms, and transparent processes,” said Kevin Lewis, SVP of sales for PMA. “Workforce contracting should be approached with the same level of discipline.”

Lewis emphasized how workforce contracting is an enterprise issue: Workforce availability can affect patient access and clinical capacity.

“What we’ve been talking about is bringing a health system’s own C-suite together to address workforce contracting as an enterprise-wide issue,” said Hershovitz.

What strategic sourcing will look like next

Over the next several years, strategic sourcing leaders will be expected to connect information that has often been considered separately: Market conditions, supply risk, supplier capabilities, clinical evidence, operational performance, and financial goals. That will require a more category-specific approach. 

The sourcing strategy for a high-cost implant with few acceptable substitutes will not necessarily be the same as the strategy for a commonly used medical-surgical product. Health systems may deepen relationships with a smaller number of suppliers in some categories while maintaining additional sources in others. 

Supplier expectations are also likely to extend beyond price and contract terms. Forecast sharing, disruption notifications, product availability, delivery performance, and data transparency may become more formal parts of how suppliers are selected and evaluated. That evaluation will continue after the contract is signed as organizations measure whether suppliers deliver the service, information, and resiliency they promised. 

Value analysis and clinicians will also enter the process earlier, particularly when standardization, substitutions, or clinically preferred products are involved. At the same time, sourcing teams will face greater pressure to demonstrate effects beyond negotiated savings, including inventory, freight, labor, product utilization, waste, procedure costs, and margins. 

The future of strategic sourcing is therefore unlikely to be defined by universal consolidation or universal diversification. It will be defined by more disciplined decisions about where each approach provides the greatest value while protecting patient care.