EXECUTIVE BRIEF sponsored by


Build a resilient and agile healthcare supply chain


T


he past few years have served as a wake-up call for the healthcare indus- try as the world continues to wrestle with myriad supply chain challenges that are creating backorders, delaying deliver- ies, and fomenting shortages. More and more healthcare C-suite executives and supply chain leaders oerseeing the fl ow of resources for clinicians to deliver patient care are starting to pursue transformational change in supply chain operations as incre- mental tweaks simply won’t cut it. Recent experiences emphasize the ongo- ing need for transformational change, Bill Kopitke, General Manager and Head of Healthcare for Amazon Business, observed. “Incremental changes may be evident, but they’re clearly not enough as healthcare providers grapple with high operating costs, supply delays, supply backorders, and a lack of transparency that have facili- ties often operating in crisis mode.” Amazon Business advocates for more comprehensive and holistic change to address root causes of supply chain chal- lenges providers continue to experience. But Amazon Business’ technology emphasis fused with traditional distribu- tion capabilities represent more than just incremental change. It offers a strategic and tactical advantage to help healthcare organizations scale purchasing operations so they can focus on delivering quality care. “We have a passion for fundamental change, working backwards from our cus- tomers to appreciate how they would prefer their purchasing experience to be,” he said. Amazon Business has been intentionally


focusing on the purchasing experience with supplies outside of traditional negotiated contracts. This is often referenced as “non- contracted spend.” What if you could have the benefits that negotiated agreements bring (e.g., standardization, competitive prices) but without the administrative bur- den and infl eibility


When local challenges erupt from global, national, or regional supply chain crises, healthcare providers are forced to find the supplies they need, which is typically outside their existing contracted supplier relationships. This is a type of non-contract spend, which can be ineffi cient to source and distribute. It can also be more expensive given the crisis.


There are many other reasons why orga-


nizations purchase supplies and services outside of a negotiated contract, but often central supply chain departments do not proactively know how to manage it, accord- ing to Mr. Kopitke.


“Non-contract spend can be made by hundreds of employees at an organization through e-commerce, by phone, or at a retail location. These single transactions – when aggregated – can represent a vast total of spend, sometimes exceeding common cat- egories that are proactively managed, like offi ce, , and I peripherals. nd yet we often don’t look at non-contract spend like a category to be managed,” Mr. Kopitke said. Amazon Business has been building wider, easier access to the supplies health- care organizations normally purchase but allowing administration to digitally guide and control the spend. Like its consumer site, it wants business buyers to be able to easily compare products, prices, delivery options, and quality ratings all in one place without requiring a traditional negotiated procurement agreement. Two provider supply chain executives


nearly 1,700 miles apart recognize the value of comprehensive and holistic change in helping them navigate through specific crises. Ms. Régine Honoré Villain serves as Senior Vice President, Supply Chain etwork and hief Supply hain ffi cer at chsner Health, ew rleans, and r. Patrick Murphy serves as Director, Supply Chain, Procurement and Systems at City of Hope National Medical Center, Duarte, CA. In this Executive Brief, we will review ways their organizations gained supply chain effi ciencies with maon usiness. Ms. Villain and Mr. Murphy each use


Amazon Business features to help them navigate through operational hurdles unique to each organization. For Ms. Villain, one use-case involved disaster relief in the aftermath of a hurricane; for Mr. Murphy, the issue involved proac- tively managing non-contract spend within his facility.


Horizon scanning hether its helping chsner recoer and restore operations and services to its patient population following a weather-related


disaster or it’s empowering City of Hope to track non-contract purchases to improve procurement and provide clinicians with needed products, Amazon Business works to ensure both can be achieved accurately, effi ciently and as seamlessly as possible. Looking ahead, Ms. Villain envisions


further integrating Amazon Business within chsners eProcurement system to deepen the operational partnership, reshape mind- sets and enhance and optimize the way healthcare procurement progresses. “I know that lots of people feel very com- fortable doing things the way that they have always done it,” she continued. “And cer- tainly, that’s not what Amazon Business is about. My challenge to all of us is to engage this conversation with Amazon Business and think about how we can improve the way that we’re doing business today.” Mr. Murphy asks, “How do we change


our thinking and the way we operate That’s just the way it is. This is the way we do healthcare. We have contract pricing, we have items, we have item masters. We have all these attributes that we have to keep in sync within multiple systems. It’s complicated. Maybe it doesn’t have to be. “I envision betting on Amazon Business offering a one-stop shop where we go and reduce extra layers for our transactions,” he added. “Moving forward, we’re ready for those options and to be nimble, to fol- low and to work with Amazon Business to change how we do things. To simplify the process.”


Mr. Kopitke shares that Amazon uses the word “simplify” within the company a lot. How do we innoate and simplify he posited. “I think healthcare has a lot of opportunity for simplifi cation. e hae a bigger mission to help bring down costs, improve transparency, and make purchas- ing easier for everyone involved.” “We want to have an invisible supply chain that enables organizations to get the supplies they need, when and where they need them, with minimal effort,” he continued. “There’s a lot of opportunities that we look forward to working on with our customers.” HPN


Visit hpnonline.com/21270647 to learn what obstacles Ochsner and City of Hope faced and how Amazon Business helped.


hpnonline.com • HEALTHCARE PURCHASING NEWS • July 2022 7


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