Driving Value in Healthcare Through Supplier Collaboration – Part 2- What Are the Critical Pieces of Building More Strategic Supplier Relationships?

Todd Larkin, Chief Operating Officer, Intalere

Excerpts from a Conversation with Todd Larkin, Chief Operating Officer, Intalere

A critical piece of this new engagement model is sharing information and insights across the supply chain. That’s always been a sensitive topic between providers and suppliers. The lack of sharing, based on a traditional lack of trust and transparency, is perhaps an artifact of the traditional funding models that we’ve had in fee for service, and as those models are changing, it’s imperative that we become much more open and willing to share information.

Obviously, trying to get cost reductions by reducing the price of a purchased product is interesting, but it may not be meaningful over the long term and follows the law of diminishing returns. What suppliers really value in a true integrated supply chain is predictability. Being able to predict and have visibility to demand before it occurs so that they can adjust production and be prepared is critical. This way, you can mitigate supply shortages, supply disruptions and have assurance of supply.

Supply Chain 101 is literally assurance of supply. If I can’t get the product or service, then what’s the point of spending time negotiating and contracting for it? Who cares if I can negotiate a great price on a product that isn’t available to meet my needs? Providing that visibility and transparency in that future demand is extremely important to have, not just with the supplier, but all the way up and down the supply chain – visibility and transparency to your supplier’s suppliers.

Traditionally, where data does exist, it’s not trusted. For example, many times we’ll do benchmarks or clinical evaluations for a specific provider. If you take those same results and try to share that with another provider, it unfortunately is not often trusted. 

Where there is no data, there’s also an unwillingness to seek out all the sources of information, whether it’s in the provider space or the distributor or a supply chain partner. We must be more willing to share the information that we have and add more information to the pool of knowledge to create better outcomes and better value for our patients.

The other aspect is being much more proactive. I mentioned predictability as a key value for supply chain. In order to get to predictability, we must be very proactive in having reliable insights and forecasting. It may not be 100% accurate, but it’s going to be directional and it’ll give us some visibility as to where we think certain demand curves may be in the future.

Use of scenario planning to identify future potential realities with probabilities assigned to each would be invaluable. Historically, I think supply chain organizations have been very reactive in addressing problems and their supplier relationships. It’s a constant fight and we could eliminate a lot of the waste and rework if we were much more proactive upfront.

We Can Help. Intalere provides resources that can assist in the area of supply chain and supplier relationships, as well as many other areas of your healthcare facility. Review our Post-COVID Transformation Toolkit and reach out to see how we can help. Contact Customer Service at 877-711-5600 or customerservice@intalere.com or your Intalere representative.

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