This document summarizes a webinar about using technology to achieve optimum healthcare supply chain performance. The webinar covered defining supply chain management, objectives and challenges, and how technology can help. It discussed opportunities to improve areas like spend management, sourcing, inventory, and using metrics. The webinar suggested technology tools can provide real-time visibility, analytics, and automation to reduce costs and improve capabilities.

1. Healthcare Supply
Chain Management:
Technology‘s Role in Achieving
Optimum Performance
Webinar Presented by:
Jamie C. Kowalski, MBA, FACHE June 9, 2015
Jamie C. Kowalski Consulting, LLC Copyright 2015

2. WEBINAR FACULTY:
JAMIE KOWALSKI
CEO
Jamie C. Kowalski Consulting, LLC
Jamie C. Kowalski Consulting, LLC Copyright 2015
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3. TOPICS
 Supply Chain Management Defined
 Supply Chain Objectives
 Information Challenges and Requirements
 How Technology Facilitates Optimum
Performance
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4. SUPPLY CHAIN MANAGEMENT; ENTERPRISE-WIDE
ACTIVITY BASED COST VIEW
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Evaluate
Select
Sourcing
and
Contracting
Process
Order
Ship
Product
Receive
and
Pay
Inventory
and
Store
Pick
And
Deliver
Deliver,
Use,
Charge
Fill
Order
Provider/
Customer
Manufacturer
Distributor
Provider
Dispose
Reverse
Logistics
Process
Comprehensive | Complex | Interdependent
Jamie C. Kowalski Consulting, LLC Copyright 2015
SUPPLY CHAIN MANAGEMENT DEFINED

5. Total Hospital Operating Expenses
45%
Clinical &
General
Labor,
Other
25%
Supply Chain Total Delivered Costs
(Activity Based Cost Basis)
Supplies
15%
Logistics &
Distribution
15%
Other
100%
Total
Operating
Expenses
* Figures based on HFMA 2008 estimates. Labor cost includes salaries, wages and benefits based on average of leading hospitals and
Others is inclusive of profits to the hospitals. Source: S&P Industry Surveys: Healthcare Facilities; HFMA; industry reporting; Pipal
Research analysis.
Copyright Owens & Minor, Inc. 2008 5
TOTAL ANNUAL SUPPLY CHAIN EXPENSES REACH
50+% OF TOTAL ANNUAL OPERATING EXPENSES

6. OPPORTUNITIES
 Spend Management
 Budget Accuracy and
Accountability
 Encumbrance
 Visibility
 Analytics, Metrics
 Drill Down From Aggregate
to…
o Cost Center
o Service Line
o Product Category
o Item
 Consume Excess Inventory
Levels
 Value Analysis
o Supplier
o Procedure
o Patient
o Physician
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Jamie C. Kowalski Consulting, LLC Copyright 2015

7. OPPORTUNITIES
 Value Analysis – Meet, Not Exceed, Outcome Requirements;
 MD Engagement/
 Leadership,
 Data Driven,
 Emulate Best Practices,
 Executive Champions
 Standardize Process, Product, Price, Supplier
7Jamie C. Kowalski Consulting, LLC Copyright 2015

8. OPPORTUNITIES
 Sourcing & Contracting
o Value Analysis Driven & Coordinated
o Centralized
o Multi-Source
 Staff
 GPO
 Other
 Best Value
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9.  Group Purchasing Organizations
 Model Evolving
 Alternatives Provided by IDNs (CSC Model), Regional
LLCs
 Collaboratives Forming
o Cleveland Clinic + Dignity
o Hopkins + Allegheny/Highmark
o Barnes/Jewish + St. Luke’s – KC
 Insurance Companies
 Lack of Distinction in Portfolios, Prices?
 If You Are IN, Be IN
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OPPORTUNITIES
Jamie C. Kowalski Consulting, LLC Copyright 2015

10.  Inventory Management
 Inventory = CA$H
 Visibility
 Accountability
 Consolidation
 Demand Planning
 Standardization; Product, Price, Supplier
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OPPORTUNITIES
Jamie C. Kowalski Consulting, LLC Copyright 2015

11. OPPORTUNITIES
 Operations
 LEAN 6 Sigma
 Nurses Doing Supply Chain Tasks vs Supply Chain staff
 Operations: Task Necessity; Task Efficiency
 Operations: Manual vs Automated (Robotics, Info Tech)
 Consolidate, Standardize, Centralize, Schedule
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Jamie C. Kowalski Consulting, LLC Copyright 2015

12. OPPORTUNITIES
 Metrics
 Metrics Define and Track Performance & Value
 Measure What Matters, Can be Managed
 Metrics Are NOT Benchmarks; Benchmarks come from Metrics
 Develop for Various needs
o Staff Level
o Management Level
o Customer Level
o Executive Value
 Produce and Distribute
 Analyze, Discuss
 Take Action
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Jamie C. Kowalski Consulting, LLC Copyright 2015

13. CLINICAL VALUE OPPORTUNITIES
 Improve Role & Utilization
 Supply Chain = Point of Origin to Point of Use
 Nurses Have Role in Value Analysis ONLY
 More Time with patients
 RNs do what Educated and Trained To Do
 Less ‘chasing’; less ‘burnout’
 Paid for desired role and service
 Surgery Not an Exception
 Supply Chain Proves Capability
 Earns Trust
 Supply Chain is Welcomed (‘09 Survey’)
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Jamie C. Kowalski Consulting, LLC Copyright 2015

14. CLINICAL VALUE OPPORTUNITIES
 Physician Engagement
 Employed and non-employed
 Value Analysis ‘Rules’
 Value Analysis Process
 Incentives
 CEO leads; SCL Supports and Executes
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Jamie C. Kowalski Consulting, LLC Copyright 2015

15.  Technology Solutions
 Many Supply Chain Components
 ERPs Provide the Basics; some evolution on the way
 Enables Top Performance
 Former “Bolt-Ons” are now Essentials; Development is
Exploding
 Real-Time Visibility to Point of Use
 In Depth Analytics
 Automation of All Transactions; Forecasting, P2P,
 Costs Down, Capabilities Up; ‘Cloud Based’
 Invest to Get a Return
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OPPORTUNITIES
Jamie C. Kowalski Consulting, LLC Copyright 2015

16. Inventory Mgt/Demand
Forecast
Total Cost Per Encounter
Quality Outcome/EMR
Standardization
Value Analysis
Charge/Revenue Cycle
Supplies
Drugs
Equipment
Food
Linen
Sterile Items
Waste
Order Entry
Point of Use
Cross-Docking
Productivity
Sterile Reprocessing
Printing
Laundry
Production Mgt
QA
Case Cart Mgt
Instrument Mgt & Tracking
ERP
Item Tracking
P2P Receipt
ERP
Sourcing
Bidding
RFP Mgt
Vendor Mgt
Contract Mgt
Reverse Auction
Spot Bulk Buys
EDI
P2P
P Card
Price
Comparison
Tier Analysis
Spend Analytics
WMS
Order Entry
Records Storage & Retrieval
Transportation & Freight
Gen Ledger/ERP
Value Analysis
Functional
Equivalents
Outcomes
Matching
Spend Analytics
Cost to Change
Ratio
Value Analysis
Metrics
Supply Chain
Management
Planning
Evaluating
Selecting
Purchasing
Contracting
Storing
Warehousing
Processing
Distribute
Transport
Using
Expense
Management
Enterprise-Wide Supply Chain Management
Technology Tools, by Function
ERP
Data Cleansing /
Normalizing
Use Analytics
Demand Forecasting
Point of Use
Perpetual
Physical Count
Recalls
Rotation
PAR Mgt & Analysis
Mobile Equip
Tracking
Verification
Asset Mgt
Cross Docking
Total Cost of Use
Spend Analytics
Standardizing
Receiving/
Accounts
Payable
Managing
Inventory
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Jamie C. Kowalski Consulting, LLC Copyright 2015

17. Do You Have The Best Possible …?
SC Leadership SC Strategic Plan Exec Engagement; Strategy, Coaching,
Enabling, Holding Accountable
Educated Managers,
Clinicians, Physicians, Staff
Organization and
Processes
Business partners,
Relationships Technology
Tools
Performance Metrics
and Management
Patient Safety,
Service and
Satisfaction
Jamie C. Kowalski Consulting, LLC Copyright 2015
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18. QUESTIONS/DISCUSSION
 Please use “Chat” to submit any questions
Jamie C. Kowalski Consulting, LLC Copyright 2015
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19.  To improve your inventory management processes, join us for a
product education webinar:
 Friday, June 12th, 3:30 PM ET / 12:30 PM PT
 To improve your receiving and tracking processes, join us for a
product education webinar:
 Wednesday, June 17th, 11:30 AM ET / 8:30 AM PT
 Registration links will be sent today
Jamie C. Kowalski Consulting, LLC Copyright 2015
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LEARN MORE

20. THANK YOU
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 Jamie Kowalski, Kowalski Consulting -
http://jamieckowalskiconsultingllc.com/
 Jump Technologies, Inc. –
www.jumptech.com
Jamie C. Kowalski Consulting, LLC Copyright 2015