A supply chain network involves a multifaceted connection between healthcare systems, manufacturers, suppliers, distributors, and logistics providers collaborating towards a common goal. This network fosters visibility and operational control while promoting strong partnerships. However, the strength of the network depends on the effectiveness of each component. When a healthcare facility faces challenges in system or clinical integration, data silos, and distinct procurement processes, performance and cost efficiency efforts are hampered.

SCO Magazine met with Dave Walker, SVP/Chief Supply Chain Officer at Providence Resource, Engineering & Hospitality Group, to speak about the topic of the expanding influence of supply chain within a large IDN or health system. Within Providence, Dave leads the Resource, Engineering and Hospitality Group (REH). The purpose of the group is to ensure that purchased products and services meet the clinical needs of the patients and caregivers Providence serve. Over several years, he has tried to look at the organization and its supply chain challenges from a broader context and encouraging his institution to collaborate across a variety of clinical, supply chain and other cross functional stakeholders. Ultimately, he has taken several steps to progress these ideas forward. His thoughts are enlightening for any organization within or outside of healthcare.

Providence

Providence provides high-quality, compassionate healthcare to all, regardless of coverage or financial status. Our 117,000 caregivers, across Alaska, California, Montana, New Mexico, Oregon, Texas, and Washington, offer a diverse range of health and social services.

58

hospitals*

1000

clinics

35

skilled nursing facilites

21

hospice sites

*Stats as of 02/2024

Q. SCO: What is your vision for supply chain at Providence?

A. DW: Over the last 10 to 15 years—no matter what company I’ve worked in—I’ve really tried to look at supply chain in a much broader context. My view is that we should be building and leveraging a network of collaborative internal and external relationships that deliver breakthrough financial, operational, and social performance for both Providence and our partners. Supply chain practitioners today need to aspire to develop broader supply chain capabilities that create a strategic impact. Without that perspective, supply chain will continue to be perceived primarily as a source of expense reduction when it could be an underlying strategic differentiator for a health system. With that in mind, I’m focusing on these three areas:

1. The art and science of supply chain: First, there should be an understanding and application of the science that underpins effective supply chain management.
2. Developing a culture of systems thinking: This depends on servant leadership and continuous improvement, and Providence is on a continuous path to advance all three of those things.
3. Build relationships that enhance a network or an ecosystem: We must become good stewards of each other’s businesses—both internally and externally. We need to break down the barriers that suboptimize collaboration. This seems to be the number one challenge that we face as supply chain professionals.

A supply chain network involves a multifaceted connection between healthcare systems, manufacturers, suppliers, distributors, and logistics providers collaborating towards a common goal. This network fosters visibility and operational control while promoting strong partnerships.

Q. SCO: Can you talk a little bit about your team’s scope within Providence?

A. DW: The scope continues to change. Beyond all the traditional healthcare supply chain functions, I have system responsibility over Procure to Pay, as well as our system-wide cash management function—in partnership with our treasury team. We also have food nutrition services, our corporate credit card and travel services, and we’re also starting to make progress in both lab, EVS and periop operations as a support entity. I’m fortunate to have that kind of diversity and influence across those area. Ultimately, our goal is to take on as much of the supply chain management as possible to allow the clinical caregivers to focus on delivering patient care.

Q. SCO: In terms of creating a more clinically integrated supply chain, what would you say are your biggest hurdles?

A. DW: We continue to work on managing the diverse perspectives of both supply chain leaders and clinicians, working together for the common goal of achieving great outcomes. We must have continuous dialogue to understand the overall impact to the financial P&L of the organization, while simultaneously showcasing the quality of products they deserve. Some of the initiatives we have implemented:

• We have a clinical committee that can adjudicate outcome, quality, and cost, which has led to a 90% compliance rate of product usage.
• We have leveraged our contacts and counterparts in other industries like retail, academia, etc. to get outside perspectives on logistics and standardization.
• We are looking to create a periop program that will optimize high-dollar industry and reduce waste—all designed to give time back to caregivers to do what they do best.

Everyone wants lower costs, but clinicians still have high expectations around non-standard product use, with preferences for tools and products. This is where the art comes in. We must have ongoing dialogues with our clinicians to show them the impact that a non-standard approach to product selection has on not only the financial health of the organization but also to convey that a higher level of standardization—with equal or superior quality of product—brings a lower risk of shortages and a continuity of supplies to the caregivers and patients who need them most.

“We must build relationships that enhance a network or an ecosystem and become good stewards of each other’s businesses—both internally and externally… breaking down the barriers that suboptimize collaboration.”

Dave Walker

SVP/Chief Supply Chain Officer at Providence Resource, Engineering & Hospitality Group

Q. How are you mobilizing your own team to approach the ideas of supply chain system thinking? How do you foresee utilizing technology and operational changes?

A. DW: There are a couple of parts to that:

1. First, mobilizing the team is really a function of creating clarity around our proposed or desired direction, transparently discussing that direction, and then hopefully gaining some agreement across not only my team, but the stakeholder groups that we’re trying to collaborate with.
2. Then, of course, we must continue to discuss the issue that negatively impacts progress to get to common ground. Where we tend to run into challenges is that we don’t make a clear case for change. And when that happens, it’s time to take a pause to clarify and simplify the business case, looking to data insights and analysis to ensure that we’re on the right track. Afterwards, we can reengage the conversation.

Q. SCO: When considering internal and external organizational factors, you mentioned looking at other industries in terms of successful and innovative supply chain practices. Can you expand on this?

A. DW: I have a background in multiple industries, this experience has really allowed me to bring in new ideas and translate and adapt those practices to the healthcare supply chain overall, and for Providence in specific. But I also think there can often be a sense of “snobbery” when supply chain leaders from other industries come into healthcare. There is the sense you’re coming in with all these advanced ideas about logistics and technology and can just easily apply those to healthcare. That isn’t always the case. I have come across compelling, cross-industry business cases that I’m continuing to champion, and there are certainly things we can learn from other industries, but conversely—given the unique challenges of healthcare supply chain that come down, sometimes, to literal ‘life and death’ scenarios—other industries have a lot to learn from the those who have a long history in healthcare. I’m mindful of listening to their perspectives and understanding their experiences.As I mentioned earlier, I’m developing a robust collaborative planning, forecasting and replenishment capability in the periop space and couple that with some proprietary technology that we’ve developed recently called the Depletion Interface. In partnership with our clinical teams, I’m hoping to drive and make a business case for higher levels of supply availability, inventory optimization, and waste reduction. All things that are key to giving time back to our caregiver team so that they are not always in a mad rush to find what they need.

Q. SCO: How are you mobilizing your own team to approach the ideas of supply chain system thinking? How do you foresee utilizing technology and operational changes?

A. DW: There are a couple of parts to that:

1. First, mobilizing the team is really a function of creating clarity around our proposed or desired direction, transparently discussing that direction, and then hopefully gaining some agreement across not only my team, but the stakeholder groups that we’re trying to collaborate with.
2. Then, of course, we must continue to discuss the issue that negatively impacts progress to get to common ground. Where we tend to run into challenges is that we don’t make a clear case for change. And when that happens, it’s time to take a pause to clarify and simplify the business case, looking to data insights and analysis to ensure that we’re on the right track. Afterwards, we can reengage the conversation.

Q. SCO: When considering internal and external organizational factors, you mentioned looking at other industries in terms of successful and innovative supply chain practices. Can you expand on this?

A. DW: I have a background in multiple industries, this experience has really allowed me to bring in new ideas and translate and adapt those practices to the healthcare supply chain overall, and for Providence in specific. But I also think there can often be a sense of “snobbery” when supply chain leaders from other industries come into healthcare. There is the sense you’re coming in with all these advanced ideas about logistics and technology and can just easily apply those to healthcare. That isn’t always the case. I have come across compelling, cross-industry business cases that I’m continuing to champion, and there are certainly things we can learn from other industries, but conversely—given the unique challenges of healthcare supply chain that come down, sometimes, to literal ‘life and death’ scenarios—other industries have a lot to learn from the those who have a long history in healthcare. I’m mindful of listening to their perspectives and understanding their experiences. As I mentioned earlier, I’m developing a robust collaborative planning, forecasting and replenishment capability in the periop space and couple that with some proprietary technology that we’ve developed recently called the Depletion Interface. In partnership with our clinical teams, I’m hoping to drive and make a business case for higher levels of supply availability, inventory optimization, and waste reduction. All things that are key to giving time back to our caregiver team so that they are not always in a mad rush to find what they need.

Modernization goals (scalable systemwide) since 2020 between Medline and Providence

• Achieving fully integrated data—demand planning and inventory management to reduce delays, increase efficiency and maximize savings
• Improving tools and systems—overhaul surgical preference card solution to eliminate waste, reduce excess picks and maximize capture charges
• Synchronizing cost reduction efforts—ongoing formulary standardization and reduction in clinical and product variation
• Expanding channels through Medline by standardizing products and processes across the organization to improve overall clinical and operational efficiency

Q. SCO: What do you look for in a partnership to achieve overall supply chain network success?

A. DW: Having a partner that is willing to be flexible, meet us in the middle and work collaboratively is key.  We have many complex challenges and struggles especially, beyond the crises that arose from the pandemic. It pays dividends to have those relationships. We’ve built a great track record and story—with Medline’s help—and that gives us a high level of credibility in the organization. Providence and Medline have a long-standing partnership since around 2010, and that partnership expanded in 2017.

We’re not afraid to say when mistakes have been made and what we’ve done to remedy those mistakes. We never, and I mean never, try and pull the wool over our colleagues’ eyes—and we expect the same from our partners. In this way, we all know that if my team says something or I say something, we mean it, and I think that has resonated across the organization.

Ultimately, success in supply chain involves taking small steps, showcasing what’s achievable, and driving change. Through diverse experiences and collaboration, individuals are inspired to explore new ideas in their organizational sphere. And when it comes to breaking down barriers, that is the valiant battle.