These analysts drew on their primary research field and work with healthcare value chain companies when casting their vote. As the past few years have shown us, these changes are unpredictable and, therefore, difficult to plan for. While the cost of RFID implementation is still higher than many organisations would like, it’s not difficult to see the business case for investment in these particular scenarios. “Medtronic Announces Its Forthcoming Robotic Assisted Surgical Platform to Feature Three-Dimensional Vision System From KARL STORZ,” GlobeNewswire. Scripps is another IDN supply chain with notable clinical engagement. Hospital supply chain strategy As part of establishing a major multi-specialty tertiary care center, the client engaged Strategy& to help develop its supply chain strategy and operating model. Supply chain leadership at Spectrum has a lot of range. The company expects to see a return on investment within 18 months, and to achieve savings of nearly $70 million over the next 10 years. Healthcare may be unique in its patient-centric focus, but the fundamentals of supply chains remain the same regardless of the industry. One example of collaboration is with J&J’s Medical Devices business. New for 2019 is a robotic process automation (RPA) initiative in procurement that is a first for Duke overall.Duke’s procurement team is using RPA to manage supplier emails for confirmation, order acknowledgment, backorders and pricing discrepancies. Yes! With so many aspects of the industry changing simultaneously, it’s impossible to predict which trends will win out and which will fall to the side. Gartner analysts Thomas O’Connor and Pierfrancesco Manenti define agile supply chains as those that are “able to quickly respond to changes in both customer demand and supply sources, without incurring extra costs or penalties.” (See ) This is an attractive trait, as it allows supply chains to insulate customers from supply disruptions and take advantage of demand spikes. Earlier this year, it completed a spinoff of its animal health business. The goods-in dock may be just one touch point in many before inbound deliveries arrive at the locations where they are required. As a result, leading healthcare supply chains invest heavily in communication, education and governance — putting tools in place that propagate the components of the strategy, address questions and concerns, and monitor progress toward goals. Contributing to the transformation of healthcare. “Jennifer McPherren — About Northwestern Memorial HealthCare,” Journal of Healthcare Contracting (JHC). Individual votes were tallied across the entire panel, with 25 points earned for a No. 18. Medtech Insight, Informa Pharma Intelligence. This was accomplished by consolidating volumes by standardizing on a smaller number of purchased items, and in some cases, using surgeons to help negotiate pricing. Still, the need to reduce costs is a strong incentive for change. CVS already makes 700,000 home visits and has 72 million Americans connected via text. Duke’s procurement team is using RPA to manage supplier emails for confirmation, order acknowledgment, backorders and pricing discrepancies. Our industry needs leaders and we applaud your ongoing progress. The point is “driven home” when they evaluate the financial performance of Schein’s suppliers, which is often better than its own. Scripps is another IDN supply chain with notable clinical engagement. Lack Of Integration. With approximately 313 million U.S. residents in 2012, this means that at least 243 tablets were produced and distributed over that period for every child and adult in the U.S. Retailers were once again represented in the Top 25 by the two leading global pharmacies — CVS Health and Walgreens. In a direct response to Amazon’s acquisition of PillPack and the resulting pharmaceutical delivery capability, Walgreens has partnered with FedEx to provide expedited prescription delivery.For a nominal fee, customers can elect to have their shipment delivered the next day or leverage “click-and-collect” for in-store pick up via express check out. Its research is produced independently by its research organization without input or influence from any third party. For consistency, we mapped bond ratings from all services to the S&P scale, which is reflected in Table 1. First, it can reduce costs, by shortening manufacturing lead times, slashing inventory levels across the value chain, and cutting product obsolescence. The health system is targeting corporate social responsibility as well. The Gartner healthcare supply chain research team is pleased to present the 11th annual Healthcare Supply Chain Top 25. The health system has a vision for a centralized Center for Transformation and Innovation to open in 2022 focused on its “vision to provide personalized health that is simple, affordable and exceptional” according to CEO Tina Freese Decker. Supply chain market growth is expected to jump from 2014’s projection $13.8 million to nearly $14 million by 2019 because of healthcare costs’ continuous escalation. The real effort is required in deploying the strategy across a complex organization, ensuring that every individual in the organization is aware of their expected contribution to the initiative. This divestiture also serves as proof to its claims that the supply chain is a strategic asset that can be transformed from a cost center to a revenue center. If you could share a soft copy I would like to provide this to our hospital team. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. Differentiating is exemplified in how clinically integrated supply chain is into the fabric of patient care. Leading supply chains realize that there is a need to adapt the current ways of working, and are devising and implementing new capabilities, such as digital technology and agility, that will prepare them for the future. In late 2017, one of its physicians was recognized with a Physicians Understanding, Respecting and Engaging supply chain (PURE) award from Healthcare Purchasing News.This recognition was specifically for Scripps’s value analysis capability that builds a solid link between the clinical and supply chain staffs, resulting in physician-requested products procured at lower costs. IDNs, such as Mayo Clinic, Spectrum Health and Centura Health, are using agile approaches as they build out their risk management capabilities. The healthcare industry is in a state of flux as it transforms toward a future environment that is significantly different than the way it was just five years ago, as follows: Mergers and acquisitions (M&As) in all healthcare segments constantly reinvent the competitive landscape and redefine who are customers, suppliers and partners. To ensure voter demographics consistent with prior years, we applied weighting factors based on the voter’s industry segment. “Healthcare — Banner Health,” Supply Chain World. The sheer variety of product ranges and the SKUs they comprise makes the healthcare supply chain a very complex environment. If a former Masters company fails to meet the criteria in the current year, it would lose its designation. Intermountain also leverages a formulary approach — a concise list of approved medical supplies and implants — to reduce healthcare costs while maintaining high-quality standards. While pharmaceutical distribution is over eight times as large as its medical products business, Cardinal continues to evolve its role in healthcare toward manufacturing, and customer and patient experience. Banner is using technology and analytics to improve its purchasing process. For its financial metrics, Novo Nordisk once again had the highest three-year weighted ROA of any company in the ranking at 36.4%. We openly discussed this methodology with key executives from health systems, and the majority of these executives supported the link between supply chain leadership and the quality of patient care reported in the 15 Top Health Systems Study. This ranking, a separate program from , recognizes supply chain leadership across the spectrum of organizations that deliver healthcare. While we can’t speak to how each individual voter made their decision, the outcome seems in line with reporting on the major manufacturers involved. Sustained delivery on aligned supply chain strategies to patient care and sustained profitability, an eye to business continuity planning, and adoption of early digital capabilities win the day. Global trade agreements are in a state of flux, with Brexit, the tariff uncertainty between the U.S. and China and the proposed change to the North American Free Trade Agreement (NAFTA) being key examples. Concerns often exist regarding which types of hospital supplies can or should be transported together. Mayo Clinic made our Masters Group for the second year in a row. Because of this, retailers have more opportunities to influence population health as well as shift the place of delivery of more traditional care. Chief supply chain officers (CSCOs) and supply chains leaders should learn from the strategy and leadership of the top global supply chains, and: Make your supply chain capabilities more agile by segmenting your customers, implementing faster responses via shorter lead times, and improving your sensing acumen to improve service and lower total cost. Early reports look promising for Advocate Aurora Health as it tries to take significant real supplies and service cost per adjusted patient discharge out of the cost of care, independent of new technology adoption or inflation. Banner also employs technologies that provide real-time visibility of and analytics for calculating total cost to serve, supply expense, and cost per procedure, per physician, per patient encounter and per member per month (PM/PM), and quality outcomes. Leading healthcare providers continue to demonstrate the ability to break new ground on top of strong foundational capabilities. As healthcare is a care-driven industry, naturally digital applications are centered on ways to improve this care, usually patient experience, and connected or “smart” devices. This leader refocused the strategy group on deployment and execution, and now every individual, among the tens of thousands of team members, know the supply chain strategy and their part in it. The traditional hospital and healthcare supply chain model is fragmented, hampered by conflicting goals and (in the main) operated under the auspices of nobody in particular. While J&J has never been ranked lower than the ninth position in the history of the Gartner Healthcare Supply Chain Top 25, its ranking journey over this time frame parallels its supply chain journey. You don’t have to look further than CVS Health’s investor day presentation to see the transformation it is embarking on. Patient Support Services includes patient transportation at Cleveland Clinic, bringing new meaning to right product, right place, right time matched to where the patient is. Mayo’s supply chain team’s mission is clear and drives its strategic planning: “To provide information, services and solutions that result in high-value healthcare and improved performance.”. Duke’s IBM Watson Health score moved into the top quintile for 2019. Also in the oncology space, McKesson is helping practices with strategic planning. Hospitals have thousands of products to source. Perhaps surprisingly, the management of hospital linen via RFID is a strong trend, driven by the immense losses that hospitals and other healthcare facilities incur every year. Cleveland Clinic also expanded its supply chain scope to include patient support services, enabling it to better align with the IDN’s population health strategy and to achieve improved end-to-end visibility with both caregivers and patients. Importantly, Roche is using the capabilities it developed in the region to supply products from other manufacturers as well. The decision to keep distribution in-house seems largely to be based on a wish to stay in direct control of issues such as legal compliance, especially with regard to pharmaceutical supply. As much as possible, Intermountain consolidates all the supply needs for each healthcare facility into a single shipment: a process which involves cross-docking materials from multiple categories including clinical; pharmaceutical, lab supplies, linen, and food, as well as maintenance and repair equipment, computer supplies, printed forms and even laptop computers. Trinity has partnered with XPO Logistics to provide supply chain services through its self-distribution network. 22 on our list for 2019, making it on the list for 11 years in a row. Not only does this improve inventory accuracy, but it also allows clinical staff to spend less time on supply chain activities and more time with patients — estimated at 22,000 hours as of June 2019. In any case, it would seem that the most successful hospital and healthcare supply operations are born from strong collaboration between logistics and medical professionals, with the goal of alleviating concerns and freeing hospital staff from the distractions of logistics. There and elsewhere, RFID is being used in the distribution of pharmaceutical supplies as well as other commodities such as linen. Council of Supply Chain Management Professionals’ (CSCMP’s) Supply Chain Quarterly. Walgreens is exploring new delivery methods, specifically via drone. Northwestern Medicine debuts in our ranking at No. It is positioned to compete in the direct to patient and/or home care market with its acquisition of Byram. As indicated by its consistent ranking, Intermountain does a lot right when it comes to its supply chain. This will enable patients and their families to be more active participants in their care, with the goal for them to live happier, healthier lives. J&J’s supply chain leadership has been a source of stability during its climb to reclaim the top spot. “GE Healthcare and World Courier Collaborate to Drive Commercialization of Cell and Gene Therapies,” GE Reports. Another key company in the opioid epidemic, its opinion scoring likely reflected its role as the second largest distributor between 2006 and 2012. Captis now has more than 80 health systems participating in its committed group purchasing program totaling $10 billion of contracted purchases in 2019. A recent partnership with Microsoft illustrates how BD is simultaneously leveraging digital technology and improving its customer’s supply chains.Using machine learning and data analytics, the Azure tool is enhancing BD’s medication management solutions for customers, enabling better product usage and inventory levels. BJC received its fourth year in a row Millennium award from GHX for achieving the highest levels of supply chain automation with trading partners.In addition, BJC automated its procurement process over the past few years utilizing Prodigo’s Marketplace solution to bring order to its 276,000 product item master, reducing non-PO spend by 46%, while increasing contract spend by 22%. It’s fair to say that customer and patient expectations have increased significantly during the journey, making the capabilities that earned J&J the top spot in 2009 still important foundationally, but these wouldn’t be enough for the top spot in 2019. 21. Use of barcode of scanning has resulted in reduced inventory losses and obsolescence. While we use the actual 15 Top Health Systems Study’s quantitative assessment for our ranking purposes, we only show the tier of performance for each health system in our final report. “Stryker and RCSI Collaborate to Drive Digital Healthcare Innovation,” Stryker. Compared to the methodology of our global cross-industry Global Supply Chain Top 25, the revenue threshold required for inclusion in the Healthcare Top 25 is lower, at $1.75 billion annually. One hospital laundry service in Wales, which looks after the cleaning of linen for the NHS, was dealing with the loss of hundreds of sheets and hospital gowns, to the tune of almost £400,000 per year. Spectrum Health rose seven spots this year to garner the No. The warehouse network leverages a single entry point for incoming shipments and handles medical devices through a consolidated service center. “Novo Nordisk Pharma Ltd. and Health2Sync Partner in Japan to Expand Digital Diabetes Management to Healthcare Providers and Patients,” MobiHealthNews. Patient focus is also behind Cardinal’s acquisition of mscripts.With this acquisition, Cardinal gains ownership of web and mobile applications that can help with patient experience of prescribed medicines. 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