Choosing a New Distributor Requires a Crash Course in Change Management

Change management in healthcare is a critical aspect of ensuring a seamless transition when hospitals switch suppliers and distribution vendors. The healthcare supply chain is a complex system that requires meticulous planning and execution, especially during vendor transitions. Hospitals often face challenges such as data inaccuracies, system cut-over issues, and adherence to strict timelines. These challenges can disrupt operations and impact patient care if not managed properly.

Dedicated implementation teams

Step one in any consideration of change management in healthcare supply chain vendors is a solid implementation team. In most systems, you have all the dedicated silos of specified work streams. To untangle these silos and create the synergy needed for a large change in the supply chain, such as going with a new distribution vendor, Medline has assembled a dedicated implementation team whose sole responsibility is onboarding new business. A team of 20 analysts, four managers, and a senior manager spend all day every day preparing customers for onboarding.

This is critical for two reasons:

1. A system now has a dedicated resource, so they don’t have to rely on a project management expert on their side to manage the process. The implementation team helps lead the project by utilizing project management tools to ensure all resources are available and accountable.
2. While there is a tested process in place that’s proven effective, every onboarding is different. The goal is that the dedicated implementation team continues to improve, looks for ways to finetune the process, and establishes more and more ways to efficiently collaborate with customers.

Optimizing data during implementation

For any successful onboarding, the process must be data driven. Not only is this important for positive change management, but data feeds inventory management, logistics, operations, etc. For that reason the team needs to assess and weed out “bad”—inaccurate, inconsistent, or irrelevant—data so everyone has full visibility.

Once the data is cleansed and optimized, the team can work with the customer to enable a streamlined digital transition from a previous vendor to the new vendor—at least a couple weeks before the “Go Live” of the new distribution partnership. It is essential that there are the right resources and time allotted for that process or there will be significant transactional issues. If the two systems aren’t communicating properly, there will be disruptions in service. Testing with the EDI (electronic data interchange) team is also critical to this process. The other important consideration is sticking to a meticulous strategy for timing.

“We have built a tried and tested process that focuses on communication and collaboration. Our ability to use data to plan and forecast allows for a successful transition. By adhering to our timeline milestones, we secure inventory in a timely manner and allow our operations and logistics team adequate time to receive the product, break it down to the right unit of measure and deliver to the system without delays.”

Mina Rezk

Vice president of sales administration, Medline

Ensuring a smooth transition

Medline’s implementation philosophy is “management by exception”—a strategy that involves intervening only when there are significant deviations from planned outcomes. The goal is that the team can take care of everything, so there’s no action needed on the customer side. A 200-step process is followed by the implementation team, and only about 10% of these tasks are assigned to customers. So many customers are nervous about change management, assuming that the majority of work will fall to them.

Medline believes it is their responsibility is to take care of up to 90 percent of the work to ensure the transition goes through without disruption. The prime vendor analysts on the team provide onsite support focused specifically on inventory forecasting management and national brand contract and pricing management. This expertise is incredible valuable to the transition.

When Medline became a prime vendor for University of Utah Health, the collaboration was important to both sides. Mark Fawson, director of material services at University of Utah Health, suggested that “Actively listening to one another; ensuring proper setup of delivery schedules at multiple locations; picking, packing, shipping product accurately and neatly; implementing new best practices and processes; and offering suggestions for improvement to one another’s operations all contributed to a successful and seamless transition.”

Change management in healthcare can be extremely challenging and has a downstream impact to everybody involved in the system. Mina Rezk, vice president of sales administration at Medline, remarks, “We have built processes and milestones based on our experiences, and while we try to anticipate all of the steps, we understand that every transition has it’s nuances.” Every single customer is different, the data’s different, the personalities are different, and the appetite to take on change is different. Customization on each project and aligning with the system’s unique needs is a big part of what makes each implementation successful.

“The collaborative nature of our teams ensures we remain poised to continue our commitment to quality patient care by supporting our clinicians who care for our community. This partnership guarantees we can deliver the right product, to the right place, at the right time.”

Mark Fawson

MBA, BSN, RN, CMRP, director material services, University of Utah Health

Many systems haven’t had to conduct data cleansing and pricing analysis since they partnered with a previous vendor—and that often happened with different managers and leaders. Multiple siloed departments and manual spreadsheets make the process feel daunting. With a solid implementation team, fill rates have stayed at over 97% due to trend analysis of the data and engaging the right resources on the customer side. And a solid benefit of both implementation and prime vendor analysis is a rise in pricing accuracy and price assurance. Transparency is key throughout the process to create effective change management in healthcare. Pricing metrics are presented on a weekly basis, with milestones to meet, and this proactivity ensures that goals are achieved before the first order is placed.

Building customer confidence

At “Go Live,” Medline is managing the true exceptions—making sure rejections are well below 3%, and that pricing accuracy is well above 90%. The most successful implementations have involved properly trained and engaged implementation teams that have set expectations with the customer. The collaboration happens with the customer helping to update the following:

• Item master data
• Pricing
• Par locations

It’s critical that any steps required by the system is shared as early as possible, so everyone can properly prepare and allocate the resources needed ahead of time. If you get both sides talking—as early as week one of a 15-week implementation—the customer is involved in the crucial steps required to complete a successful transition.

“I am genuinely grateful for the planning and support that facilitated a smooth transition to a new distribution partner. Change of that magnitude can be difficult, but it was an easy transition, thanks to the impact of effective change management from both the University of Utah and the Medline teams. With the right teams in place, we could address issues head on and find solutions quickly. Overall, I was pleased with Medline’s commitment to excellence during the transition and their ‘run toward the problem’ mentality.”

Mark Fawson

MBA, BSN, RN, CMRP, director material services, University of Utah Health

Implementation within a long-term relationship

Sometimes, the implementation team can be called in if there is a significant change in a customer’s supply chain strategy. In the case of Sutter Health, the desire to bring back hundreds of items and specific vendors back into their prime distribution channel after the pandemic created a huge challenge for the system. To many managing the project, it was considered as a full secondary implementation process. As Chad Hoare, IDN executive account director at Medline, recalled, “With Sutter coordinating with the team, the project that would otherwise be complex and time consuming ran relatively smoothly.” With added complexities in the supply chain, and the desire to become more and more resilient, systems are looking to Medline to simplify and streamline their overall operations and distribution strategies. As with other major instances of change management in healthcare, a secondary implementation can be integral even in the most solid or long-term of partnerships.

“We normally would not be able to maintain level of visibility as to what inventory is coming into our distribution partner without the implementation team that Medline brought to the table. We are also very lucky to have a very strong PVA team on our side—working very closely with them to make sure that everything’s running as smoothly as possible, while also having insights from strong data.”

Travis Barkel

Director, purchasing and stock control, Sutter Health

Key takeaway

A robust implementation process is essential to mitigate these challenges and ensure a smooth transition. By employing a dedicated implementation team and a comprehensive 200-step process, Medline minimizes the workload on hospital staff and manages the transition by exception. This approach ensures that most tasks are handled by the vendor’s team, involving the hospital only when necessary. Through early engagement of key resources, transparent communication, and proactive management, the implementation process significantly enhances the efficiency and reliability of the hospital supply chain, ultimately improving patient care and operational performance.

*All statistics validated by Medline sales operations based on industry standards or actualized and tracked performance data.