“The most significant shift we are seeing is from managing a function to moving toward enterprise strategy, technology integration, and cross-functional leadership,” said Schiller. Supply chain leaders, he said, are increasingly more accountable for outcomes including financial sustainability, throughput, clinical performance, and continuity of care – not procurement activity alone. “Heading into 2027, the leaders who will be most impactful will be those who can convene across boundaries and translate supply decisions into enterprise advantages.”

To explore what that evolution will require, HPN spoke with a multidisciplinary group of healthcare leaders representing supply chain, finance, and the clinical functions supply chain serves, along with AHRMM’s industry-wide perspective. Their insights offer a view of supply chain leadership from both inside the function and across the enterprise – from those leading supply chain transformation to the financial and clinical leaders increasingly working alongside them. 

Contributors include UPMC Sr. Director Procure to Pay (P2P) Kelly Coxon; St. Luke’s Supply Chain Medical Director Michele Ebbers, MD; Nemours Children’s Hospital Assistant Vice President, Perioperative Services & SPD, DV Edna Gilliam, DNP, MBA, RN, CNOR, NEA-BC; Hospital CFO Eric Price; and AHRMM Executive Director Mike Schiller.

Financial pressure is changing the definition of savings

As healthcare organizations face continued financial pressure, Coxon sees an opportunity for supply chain leaders to expand where they look for savings. Rather than concentrating primarily on product price, she said organizations should examine the broader operating costs, including areas such as service contracts, technology licenses, memberships, and other enterprise expenses that may not historically have received the same level of supply chain scrutiny.

“We have to look beyond product cost reduction and think about the holistic cost of care,” said Coxon. “Healthcare systems keep focusing in many of the same places, and we’ve squeezed some of those areas as far as we can. Supply chain needs to look more broadly across the organization and ask where else we can reduce the cost to operate.”

Coxon also sees opportunities for providers and suppliers to use data together to reduce operating costs. One example is ordering frequency: Consolidating multiple orders into fewer transactions could reduce processing and fulfillment costs for both organizations and potentially reduce freight or other expenses. 

The broader definition of value also extends beyond supply chain’s traditional financial measures. From the perioperative perspective, Gilliam cautioned against evaluating products solely on acquisition cost.

“Cost is important, but value is more important,” she stated. “A product with a higher upfront cost, for example, may improve outcomes, reduce complications, shorten recovery time, or eliminate the need for a future procedure.”

Strategic supply chain partners, Gilliam said, help clinical leaders evaluate that larger picture by balancing clinical outcomes, operational effectiveness, risk reduction, and financial stewardship. Rather than simply presenting options, they bring data to the discussion and help stakeholders understand the tradeoffs and implications of each choice.

Becoming a strategic partner requires earlier involvement

Major organizational initiatives – from hospital expansions and acquisitions to large technology implementations – can create significant downstream implications for supply chain. When supply chain leaders have visibility into those initiatives before decisions and timelines are finalized, Coxon said they are better positioned to assess requirements, anticipate constraints, and help determine what will be needed to execute successfully. 

“Being a strategic partner means joining major enterprise initiatives early enough to shape plans – not simply executing after decisions and timelines are set,” said Coxon. “Because enterprise decisions often affect supply chain, early involvement allows us to anticipate impacts and help the organization plan accordingly.”

That call for earlier involvement is echoed from the clinical side.

For Gilliam, the distinction between a transactional supply chain function and a strategic partner begins with understanding the clinical and operational consequences behind purchasing decisions.

“A transactional supply chain leader focuses on what was ordered, what was delivered, and what it cost,” she explained. “A true strategic partner wants to understand why it matters. The supply chain leaders who bring the most value are the ones who sit at the table with us early, understand our clinical and operational goals, and help us think strategically about where we are headed.”

Ultimately, Gilliam said, supply chain leaders should see themselves as part of the patient care team, recognizing that product decisions can affect workflow, patient safety, staff satisfaction, surgeon engagement, and financial performance.

Ebbers takes the concept of early involvement a step further. A strategic clinical-supply chain partner, she said, shouldn’t simply be brought in earlier to implement a decision but should help shape the scope and criteria by which the decision is made. 

“It’s having more of a strategic partner who can shape the scope and the criteria of how decisions are made, own the outcome and the adoption, and, when there are unintended clinical consequences, own that and take responsibility for it,” she explained. She also sees value in formalizing those relationships and decision-making processes, so they remain consistent as individuals and leadership teams change.

Supply chain resiliency becomes an enterprise risk issue

For Price, the pandemic exposed the limitations of applying just-in-time inventory principles too broadly in healthcare. While minimizing inventory may improve efficiency, he said health systems need to distinguish between supplies that can tolerate leaner inventory levels and critical items whose absence could interrupt care or create patient safety risks.

At Schoolcraft Memorial Hospital, that thinking is reflected in a “red bin/blue bin” approach. Critical “red bin” supplies are maintained at defined par levels, with particular emphasis on timely delivery and avoiding substitutions that have not been approved in advance. Price also emphasized the importance of communication from suppliers when critical products are delayed or unavailable.

Dr. Ebbers sees a similar evolution at the intersection of supply chain technology and clinical decision-making. As automation and AI assume a greater role, she believes human judgment remains essential to interpreting what the data means in a clinical environment. 

“The supply chain of the future more and more is going to be automated or AI driven, and that’s great,” she said. “But you still need a human to come in and validate that evidence – to separate preference from evidence.” That judgment also requires understanding the human impact of change, she said, including whether clinical teams are ready to absorb another change amid concerns such as physician burnout.

That need for judgment extends beyond technology. Price cautioned against applying established operational models too rigidly in healthcare. Approaches drawn from manufacturing and other industries can offer valuable lessons, he said, but healthcare leaders must account for greater complexity and the potential clinical consequences of supply chain decisions. 

 “The next generation of supply chain leaders will need the mental agility to depart from a tried-and-true model when circumstances demand a different approach,” said Price. “They need to understand not only how to operate efficiently, but how supply chain decisions affect quality and the broader organization.”

The shift also raises a longer-term workforce development question. Schiller said participants in this year’s AHRMM Executives Network identified a potential paradox: AI may capture institutional knowledge while simultaneously removing the routine experiences through which people traditionally build expertise. Today’s leaders should consider structured rotations, mentorship, case-based learning, credentialing pathways, and early-career engagement to ensure expertise is developed directly and intentionally and supported – not replaced – by technology.

The 2027 leader must see beyond supply chain

Looking toward 2027, Price sees awareness of external forces as an increasingly important part of supply chain leadership. Economic conditions, supplier margin pressures, transportation constraints, geographic disruptions, and other local, regional, and global developments can ultimately affect a health system’s ability to obtain the products it needs.

“To be an enterprise strategic partner, supply chain leaders have to get out from behind the spreadsheet and understand what’s happening locally, regionally, and globally,” said Price. “If you see a risk that I may not see as CFO, bring it to me. Global events affect supply chain operations, and I need my supply chain leader providing that visibility.”

For Dr. Ebbers, effective clinical-supply chain partnership requires leaders who can bridge two very different worlds. 

“There has to be a kind of “bilingualness” – the ability to speak both clinician and business,” she said. “Both sides have to respect that this person understands what they’re talking about.” That fluency becomes increasingly important as supply chain leaders move beyond implementing decisions to helping shape the criteria by which those decisions are made.

The leaders organizations will need in 2027 must be able to connect supply decisions to financial health, clinical operations, organizational risk, technology strategy, and patient care. For Schiller, the measure of that evolution will be visible in enterprise performance. “Strategic leaders will be those whose decisions show up in the organization’s margin, its readiness posture and plan for the future, and its capacity to care for patients,” he said. 

Looking toward 2027, Gilliam sees the relationship between supply chain and clinical leadership becoming increasingly collaborative, with both sharing responsibility for organizational and patient-care outcomes.

“The future is not about supply chain supporting perioperative services or perioperative services driving supply chain decisions,” she said. “The future is about both groups working together as one team, using data, technology, and shared accountability to ensure every patient receives safe, reliable care regardless of the challenges around us.”

“That is where the greatest opportunity lies,” Gilliam added. “Not in managing supplies, but in collectively managing outcomes.”

“In healthcare, the stakes are higher,” said Price. “When we evaluate supply chain resilience, we have to look beyond the traditional financial return and consider the potential impact on quality, safety, and continuity of care. For critical supplies, the question isn’t simply how efficiently we can manage inventory. It’s whether we have what clinicians need when they need it.”

Price also sees value in diversifying sources and establishing relationships before disruptions occur. He pointed to the importance of considering geographic diversity among suppliers and, particularly for smaller or rural hospitals, exploring relationships with other healthcare organizations that could provide supplies or even personnel during an emergency.

Gilliam believes collaboration will become most important anywhere clinical care intersects with operational risk and financial decision-making.

“Supply resiliency will remain a critical area of focus,” she said. “We have all experienced disruptions over the past several years that reminded us how vulnerable the healthcare supply chain can be. Going forward, perioperative and supply chain leaders will need to work side by side to identify risks earlier, build contingency plans, and ensure continuity of care when disruptions occur.”

Standardization is another area where collaboration can strengthen resiliency, Gilliam said. When perioperative leaders, physicians, sterile processing, finance, infection prevention, and supply chain align around common goals, she sees opportunities to reduce variation, improve quality, and create financial benefits without compromising care.

Schiller sees the conversation expanding beyond resiliency to include what AHRMM describes as readiness. “The distinction being that resilience is the ability to anticipate, adapt, and recover, while readiness is the planning, partnerships, governance, and operating capability built before disruptions reach the bedside,” he explained. 

That distinction has also emerged through AHRMM’s CLEAR Initiative. Schiller said participants in CLEAR Initiative focus groups emphasized that for readiness to earn sustained organizational attention, it must be framed in terms of operational and care continuity as well as financial and organizational risk. 

For supply chain leaders, he said, that means working with clinical leaders to identify and risk-stratify critical products, improve visibility into sourcing, manufacturer concentrations, and substitution pathways, embed supply chain risk within enterprise risk management, establish clear thresholds for when an issue warrants executive awareness, and verify assumptions.

AI and automation: Moving from efficiency to transformation

Coxon sees significant potential for AI and automation to give supply chain teams visibility into information that would be difficult to uncover manually. She pointed to applications such as extracting information from contracts and reconciling supplier statements to identify missing invoices, credits, and other discrepancies. 

But she draws a distinction between automating work and transforming it. Making a repetitive process faster may improve efficiency, she said, but the greater opportunity comes from using the information generated by technology to understand why problems are occurring and eliminate their root causes. 

“Automation can make an inefficient process faster, but that doesn’t necessarily make it transformational,” she explained. “Transformation happens when we use the data the technology gives us to identify the root cause and eliminate the problem. I don’t want to become more efficient at fixing the same issue over and over. I want to solve it.”

Price sees potential for AI to help supply chain teams forecast demand more quickly and identify vulnerabilities that might otherwise be difficult to detect. But he cautioned that technology cannot compensate for inconsistent underlying data or unexplained changes in purchasing patterns, volumes, and prices.

“AI can help us forecast faster and identify vulnerabilities we might otherwise miss, but predictive analytics are only as good as the consistency of the data behind them,” Price explained. “We still need people who understand the variances, question the output, and bring context to what the technology is telling us.”

For finance, that means supply chain analytics must do more than report what was purchased. Price wants visibility into changes in demand and volume, unexpected purchasing activity, and price fluctuations that could affect forecasts. Earlier communication about those variances gives finance a better opportunity to understand their impact and respond. 

Gilliam also sees collaboration as critical to technology and AI decisions, particularly where they intersect with clinical, operational, and financial performance.

“Healthcare organizations are going to be faced with more choices than ever before,” she said. “The challenge will not simply be deciding what technology to buy. It will be determining whether it improves outcomes, reduces risk, enhances workflow, and provides meaningful value for the organization.”

As AI becomes more embedded in supply chain operations, Schiller believes the leadership challenge will extend well beyond understanding the technology itself. “Technical fluency is table stakes; the differentiator is judgment and change leadership,” he said. “The consensus from this year’s AHRMM Executives Network was that future leaders will need enough technology fluency to guide AI-enabled work, enough supply chain depth to evaluate what the system recommends, change-management skill to help teams adopt new ways of working, and the ability to connect technical, operational, and business teams.”

Technology is changing the value people bring to supply chain

As automation assumes more rules-based and transactional work, Coxon said staff capacity can be redirected toward responsibilities that require greater judgment, analysis, and oversight. At UPMC, for example, capacity created through automation has helped support controllership and compliance activities, while insights from supplier statement reconciliation are contributing to the development of a broader account management function. 

“Technology doesn’t eliminate the value of people; it changes the value they bring,” said Coxon. “When automation takes away some of the rules-based, transactional work, we can redirect that capacity toward more complex problem-solving and other higher-value responsibilities. That can help turn what felt like a job into something that feels much more like a career.”

The evolution also places greater emphasis on critical thinking and adaptability. Coxon looks for employees who understand not only the steps in a process but why those steps matter, who can adapt when something goes wrong, and who come forward with possible solutions rather than simply identifying a problem.