IHC Supply Chain Overview

Report
Supply Chain Organization
Overview:
Past, Present and Future
Richard Bagley
Director Strategic Sourcing
Intermountain Healthcare Overview
Hospitals
SelectHealth
•
•
•
•
•
Based in SLC, UT
34,000 employees
$4.5B revenues
$5B assets
AA+ Standard &
Poor’s Aa1 Moody’s
Medical
Group
Clinical
Programs
• Since 1975
• 22 hospitals (36% of
Hospitals)
• 2,790 licensed beds
• Since 1983
• Health plans (23% of
Utah Insurance)
• 630,000 members
• Since 1994
• 1,100 employed
physicians
• 150 clinics
• Since 1997
• 9 key service lines
What does the world look like in Supply Chain?
Our Supply Chain is One of the Industry’s Best
Notable Recognitions
Garter’s 4th Best
Supply Chain in
Healthcare
2013 AHRMM
Innovation Award
ECRI Healthcare
Supply Chain
Achievement Award
IntelliCentric’s 5-Rings
Award
Critical Success Factors
•
Supply chain became a strategic focus
by senior leadership
•
$3 Million initially investment and 25 new
FTEs – skilled & talented
•
Centralized buyers and reporting
relationships of the warehouse
•
Added couriers, travel services, publishing
and central laundry
•
Earned trust of stakeholders –
management & clinicians
•
Implemented effective strategies
•
Deliver on commitments - Savings, value,
efficiency & more
•
“Skate to the puck”
SCO’s Strategic Imperatives
Increase Savings
and Value
• Deliver $42M in savings
• Deliver plan to support CPI + 1
Expand Scope
• Optimize efficiency and minimize variation
• Risk mitigation plan for supply chain
New Forms of
Value
• Develop capability to deliver post contract value
• Rum/Lum
Enhance
Technology
Generate
Revenue
• Project eLEV8 – Go Live in Q1 2014
• Data Standardization
• Cost Neutral in Five Years!
7 Things You Need to Know
About the Healthcare Supply Chain
Logistics costs in healthcare are more than 10X the costs of the retail
industry
The most expensive and high risk items often have the least control
Personal preference drives many product decisions
Healthcare outsources less than most other industries
Healthcare industry has the lowest level of trust between buyers and
suppliers
Supply chain is still in the basement of many hospitals (literally) – even
though non-labor expenses are approaching 50% of total costs
Data standards, transparency, traceability…oh my!
Our Operating Model
G
o
o
d
s
SUPPLIER
NETWORK
SUPPLY CHAIN
PROCESSES
Source
Category
Management
&
Contract
Mgmt
S
e
r
v
i
c
e
s
Buy
P2P
Logistics
Mgmt
Deliver
CLINICAL CARE
NETWORK
P
A
T
I
E
N
T
S
Materials &
Inventory
Mgmt
Supplier Relationship Management
Customer Relationship Management
Source (Procurement)
• Drive value up and cost down on $1.4B in spend
• Facilitate governance to select best projects and
manage prioritization of work
• Facilitate the process to select best supplier(s) and
products
• Segment and manage suppliers we have sourced
• Manage catalog of products/services/equipment
• Manage category plans (spend analysis, opportunity
assessment and calendar of events)
• Manage supplier contracts (820 new agreements in
2013 with 5400+ active agreements)
Sourcing Governance Framework
Purpose
Decision
Making Role
Tier 1
Procurement
Steering
Committee
Direction Setting
Approves Complex
Decisions
Impacting the
Entire Organization
Tier 2
Functional Steering
Committee
(i.e. IS Leadership
Team)
Functional
Oversight
Approves Complex
Decisions
Impacting Function
Project Execution
Approves
Straightforward
Decisions
Impacting
Category
Who?
Tier 3
Category Council
(i.e. Telecom)
Strategic Sourcing Methodology
Strategic Impact Potential
10
Supplier Segmentation
0
10
Supplier Performance
Buy (Purchasing)
• Manage the daily transactions to ensure right
product/service/software/equipment is at the right
price at the right location
• Support 22 hospitals and 186 clinics centrally with
team of 30 buyers
• Buying team is centralized and co-located with
Accounts Payable to work together
• Process 1.2M PO lines a year
• 3 way matching and moving towards perfect order
(touchless)
Deliver (Logistics)
• Ensure employees and clinicians have the products
they need, when and where they need them
• We do this by utilizing the best practices in
warehousing, transportation, automated materials
handling equipment, and inventory optimization.
• This reduces variation and waste in our supply chain,
and improves service to the end-users.
Supply Chain Center Overview
Opened - October Q3 2012 – LEED Certified
327,000 sq ft – Distribution Center – and much, much more
• 151k sq ft Warehouse space (area of three football fields)
• 111k sq ft Office and logistics management space
• 65k sq ft Ancillary Services space
What is the Supply Chain Center?
So much more than a self-distribution center!
Receiving
•
•
Production Print Center
Distribution
Cross-docking
Bulk Storage
Pick/Pack/Ship
Courier Services
Heavy Fleet Services
Equipment Logistics
Bulk Storage
Asset Recovery
Emergency Preparedness
Logistics
Center
Ancillary
Services
•
•
Imaging Equipment
Services
Pharmacy Services
•
•
•
•
•
SCO Leadership &
Administration
Retail Central Fill
Compounding
Unit Dose Packaging
Inventory Optimization
Bulk Buy Support
IS Asset Management
Service
•
•
•
Everything Supply Chain co-located here at the SCC
•
Design Services
Print Fulfillment
Solutions, Sourcing, Contracting, Analytics, Systems, Purchasing,
Accounts Payable, Logistics plus 12-15 programs
Professional and technology-enabled meeting spaces
Spaces designed to facilitate collaboration
Heath & Wellness Center (for use by all SCO employees)
Room for expansion
Computer Imaging
MFD Deployment
Asset Disposition
Why is this Significant?
Demonstration that Intermountain senior leadership
understands the critical importance of supply chain as a key
corporate strategy
Everything Supply Chain resides at our Supply Chain Center!
Supply Chain Center
Objectives of Logistics Center
Lower
Cost
Improve
Service
Reduce
Risk
Lower Unit Costs
Lower Transportation Costs
Streamlined Processes
Productivity Gains
Better Use of Hospital Space
New Revenue from Third Parties
Enables Product Standardization
Enables Sustainability
Streamlined Data Exchange
Enhanced Responsiveness
Improved Fill Rates
Value-Added Ancillary Services
Supports Standardization
Deliver in Right Unit of Measure
Single Shipment to Each Location
One-Stop-Shop Customer Service
Emergency Preparedness
Reduce Product Variation
Expiration Date Mgmt
Improved Traceability
Recall Management
Enhanced Controls
Mitigate Product Shortages
Legacy Distribution Model
Hospital 1
Med/Surg Mfg.
Med/Surg Dist.
Pharma Mfg.
Pharma Dist.
Lab Mfg.
Lab Dist.
Hospital 3
Film Mfg.
Radiology Dist.
Hospitals 4 - 23
Dietary Mfg.
Dietary Dist.
Clinics 1 - 150
Direct Manufacturers
Example: Total Joints
Hospital 2
Home Health
Retail Pharma
Central Lab
Surgical Center
Central Office
SCC-Enabled Distribution Model
Supply Chain Center
Mfg. Direct
Logistics Center
Med/Surg Mfg.
Consolidated Transportation
Hospital 1
Hospital 2
Pharma Mfg.
Hospital 3
Lab Mfg.
Hospitals 4 - 23
Film Mfg.
Clinics 1 - 150
Dietary Mfg.
Home Health
Linen Mfg.
Distributors
Ancillary
Services
Retail Pharma
Pharmacy
Central Lab
IT Asset
Management
Surgical Center
Production Print
Equipment
Services
Central Office
Supply Chain Center
Location….Location ….Location
80 % of Hospital beds within
50 miles radius
Longest distance to facility =
300 miles (Dixie Medical
Center)
The Supply Chain Center is More than a Warehouse
It is also an Enabler of other Non-Logistics Benefits
Improved employee engagement and collaboration throughout the SCO
Consolidation of ancillary services, which leverage logistics platform
Value-generating direct relationships with suppliers
Improved transparency throughout value chain
Technology-enabled data synchronization and exchange
Process effectiveness and efficiency
Reduced Variation = Quality Improvement = Cost Improvement
Enables clinicians to focus more time on clinical care
Enables SCO to invest more time on other supply chains
• Pharmacy
• OR & Cath Lab
Environmental stewardship
Questions?

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