In today’s rapidly evolving healthcare market, more hospitals are cutting costs across the board and looking to their supply chain departments to identify the best places to start. Many health systems have taken this opportunity to audit and streamline their supply chains into more focused, profitable departments.

Penn Medicine at the University of Pennsylvania is a great example. We recently interviewed Wayne Smith, Vice President, Corporate Materials Management at Penn Medicine to discuss how his team drives quality to throughout the health system.

TAG: Why are supply chains so important to today’s hospitals?

Wayne Smith: We are working in the most exciting, yet challenging time in healthcare. With costs rising everywhere you look, there is more pressure on the supply chain to deliver savings. But we have to balance savings with quality. Today’s consumers are far more educated about healthcare. They expect quality, and they have no issue driving to another hospital if they think they’ll find a better outcome.

TAG: What are the biggest trends you’ve seen in supply chain?

WS: As we move forward, you can expect more teams to be aware of and involved in what happens in supply chain. We, as a team, cannot rest on our laurels anymore. There are 40,000 employees in our system, but gone are the days of the top 100-200 driving us. We must be aligned on these system-wide initiatives and work together to achieve them.

TAG: What are the keys to a successful supply chain?

WS: There is so much that goes into creating a more effective supply chain, but there are three things I think every system needs to commit to in order to find success: Customer-focus, communication and consistency.

• Customer-Focus: We owe it to our customers to have the supplies they need, when they need them, and for a fair price. We aren’t the physicians who are saving lives, but we are providing the supplies and services to support them. That’s a powerful motivator, and it keeps us focused on our ultimate goal of making a difference for our customers.
• Communication: For as many people as the supply chain affects, it’s often shocking how little communication occurs. Hospitals need to break down the barriers between departments and create more constructive, collaborative environments. That means talking through mistakes and treating them as learning opportunities for employees at every level.
• Consistency: Our team is managing the second largest expense for our system. That comes with a lot of responsibility. In today’s market, it’s not enough for my team to achieve a goal one in 10 times, or even eight in 10. We have to aim for 10 in 10 and set that expectation for ourselves.

TAG: How can outside auditors like TAG contribute to a more profitable supply chain?

WS: As you evaluate your organization’s supply chain, it’s a real challenge to catch everything. Bringing in an experienced healthcare auditor, like The Audit Group, gives you a nice assist on top of your business. As experts in their field, they’ll help you evaluate where you stand and where you need to go. However, you can’t rely on third parties to keep your supply chain afloat. Your team needs to take ownership in what they do and have the knowledge and confidence to make the right decisions, time and time again.