Connecting with Diverse Suppliers

Sponsored by Mercury Medical

GPOs act as a bridge between supply chain executives and diverse/veteran-owned suppliers. Case in point: Vizient and Mercury Medical

Mark Cartwright

Most supply chain executives want to work with diverse suppliers, but they don’t want to be in the “minority/diverse supplier education & development” business. That’s OK, because Mark Cartwright, MBA, CPSM, CPSD, does.

Cartwright is senior director of supplier diversity strategic programs for Vizient Inc. His job is to identify and seek contracts with minority-, women- and veteran-owned businesses on behalf of Vizient’s members. Much of that job entails coaching small, diverse companies on the complexities of the healthcare supply chain. That’s where “supplier education and development” comes in.

It’s a job for which Cartwright is well-suited. Prior to joining Vizient in 2013, he served as director of supplier diversity for the Commonwealth of Virginia, and before that, creator of the supplier diversity program at his alma mater, Virginia Tech. He chairs the diversity committee for the Institute for Supply Management, serves on the board of the Healthcare Supplier Diversity Alliance and sits on the Healthcare Industry Group Subcommittee of the National Minority Supplier Development Council. He was among the first individuals to achieve the status of Certified Professional in Supplier Diversity from the Institute for Supply Management.

Complicated supply chain
The healthcare supply chain may lag behind those of other industries in terms of minority/diversity contracting, but that’s not for lack of concern or commitment, says Cartwright. Providers understand that buying goods and services from local, small and diverse suppliers creates jobs — and hence, insured individuals, he says. In addition, health systems serve diverse patient and workforce populations, and they want their supply chains to mirror those populations.

But to many small and diverse companies, the healthcare supply chain seems overwhelmingly complex. Instead of dealing solely and directly with buyers, such companies have to learn where group purchasing organizations and distributors fit in.

In addition, some suppliers – particularly those who are new to the healthcare market – believe that signing a GPO contract is a guarantee of a certain amount of business, says Cartwright. They initially may fail to understand that although having a GPO contract opens doors, the contract supplier remains primarily responsible for selling its product(s) and company to providers.

“We spend a lot of time helping these suppliers get prepared to enter the hospital market,” says Cartwright. “That’s why national GPOs have dedicated supplier diversity staffs and programs, which are built around furthering awareness, opportunity and development.” Through their membership in such organizations as the Healthcare Supplier Diversity Alliance, the National Minority Supplier Development Council and the Women’s Business Enterprise National Council, GPOs are in a good position to identify and mentor minority/diverse suppliers who are new to the healthcare market.

Suppliers themselves aren’t the only ones who fail to understand the challenges of providing products and services to hospitals and health systems. In their well-intentioned effort to promote opportunities for small, minority or veteran-owned businesses, for example, state governments sometimes impose unrealistic goals on their agencies, including hospital systems. Lawmakers in such states often don’t realize that diverse suppliers have a relatively small presence in the manufacturing of goods in high-spend categories, such as physician-preference-items, pharmaceuticals and medical devices. True, many of these suppliers do provide general medical/surgical commodities and support services, such as IT consulting or staffing. Still, that may not be enough for state hospitals to meet certain goals. GPOs have to educate these entities as well, says Cartwright.

The business case
Not all diverse companies are small, nor are they all unfamiliar with the healthcare supply chain. A case in point is Clearwater, Fla.-based Mercury Medical, maker of critical care, respiratory, anesthesia and EMS products and technologies. Through a direct sales force as well as specialty distributors, the company sells products throughout the United States.

Mercury Medical is certified as a Veteran-Owned Small Business (VOSB) by the U.S. Department of Veterans Affairs, Center for Verification and Evaluation. That’s because its owner, Stan Tangalakis, is a veteran of the Korean conflict, who served in a MASH unit as a pharmacist.

Doug Smith

“Our message is clear,” says Vice President of Sales and Marketing Doug Smith. “Mercury Medical is a healthcare organization specializing in introducing emerging technologies to the market that improve patient outcomes. These innovations align with supply chain goals in providing their facilities and clinicians with new, evolving technologies to improve patient outcomes; solutions designed to increase efficiencies and throughput; and solutions designed to reduce costs and inherent liabilities, resulting in superior patient care.

“The VOSB certification creates greater visibility of the value propositions we can provide aligning our strategic objectives with our business partners.”

Mercury Medical has dedicated sales and marketing resources toward creating awareness of its VOSB certification status, says Smith. “At industry trades shows and local, regional and national healthcare meetings, we proudly market our VOSB certification. We work closely with organizations that are supporting and developing diversity supplier programs. GPOs such as Vizient promote VOSB and other diversity suppliers throughout their networks. Some have dedicated diversity supply managers that assist companies like Mercury through their contracting programs.

“[GPOs] aggressively assist their members in developing and sourcing minority-owned businesses,” he says. “Vizient markets these types of organizations within their vast member organization, assisting their members in selecting diversity suppliers based upon their business strategy. They also provide forums at national meetings, where members and suppliers come together and share best practices.”

But providers sometimes struggle when implementing minority/diverse supplier business initiatives, Smith points out. “One of the hurdles some of our customers face is that they haven’t developed robust policies and procedures regarding how to engage and support diversity business groups that are available to them.” They may lack clearly defined goals and objectives as they relate to contracting and purchasing.

“With clearly defined targets and metrics, they can measure and ultimately determine the effectiveness of their programs focused on the VOSB and minority owned businesses.”

Says Cartwright, “All of this takes a willingness on the part of hospital supply chains to say, ‘This is important to us; let’s take a look at our spend and our opportunities.’ It has to be on a strategic, almost product-level basis. It takes forethought, collaboration and effort.” Without dedicated resources, hospitals or health systems will find it difficult to create and sustain a minority purchasing program. Instead, the program will be transactional, not strategic.

“Often, we have to work with a supplier over a period of time. Sometimes you have to go where the suppliers are; you can’t always sit and wait for them to come to you.

“Sometimes we get lucky, and there’s an immediate opportunity for a contract.”