A few years ago, I heard of a unique approach to goal setting. The idea was to frame your new year’s direction with three words. So, instead of saying you wanted to run a marathon or go on a strict diet, you could frame the goal with a word like “healthy.”
I thought of this while talking with Tony Johnson, senior vice president and chief supply chain officer at Baylor Scott & White Health. The following are a few of many great insights from this year’s Contracting Professional of the Year:
Before implementing a new strategic plan, Johnson took time to evaluate how his organization’s supply chain operated. What he noticed was that the integrated delivery network’s supply chain was designed to process orders. Purchasing and payment decisions were made at the hospital level. To move toward a more strategic model, the supply chain team took a step back to evaluate its marketplace position as well as how it made decisions on supplies. “We should take the $1 billion of spend that we have and make corporate decisions rather than hospital decisions on everything,” Johnson said.
Johnson said Baylor Scott & White faced several challenges implementing the new model. One was having the right talent in place. “It takes a very different type of talent to process transactions than it does to mine through millions of transactions, discover what you’re doing, benchmark, understand where the market is, come up with a strategy, get alignment with the stakeholders, build teams that are led by the stakeholders, have targets that are achievable but aggressive targets, and then actually deliver,” he said. To ensure the right talent, Johnson recruited seasoned supply chain executives and leaders from different industries.
The Baylor Scott & White supply chain team analyzed spending across the board, selected what programs that they were going to go after for that year, and presented that to their senior-level leadership. The team connected with the service line leaders for each area. The supply chain provided a very detailed, fact-based report with what they had been doing in the past, where they saw benchmarks, and where there was variation. While the supply chain team would present the data to the service lines, it was the service lines that would lead and make the decision, Johnson said. “We would be there as the facilitators to keep the process moving and bringing more data when they needed it. Of course, we were not short of opinions on the process. We gave them a program with opportunity that we could go after as an enterprise. They were very successful in doing that,” he said.