Plan Ahead

By David Thill

Have a merger and acquisition project plan in place prior to acquisitions

Banner Health’s recent acquisition of a chain of urgent care centers affected Banner’s supply chain “on various levels,” says Raymond Davis, senior director of supply chain medicine division and non-acute services at Banner. But the Phoenix, Ariz.-based IDN was ready for the challenge.

The acquisition of Urgent Care Extra’s 32 locations throughout the greater Phoenix and Tucson metropolitan areas “created a new segment of business oversight” for Banner’s supply chain, says Davis.

Non-acute and acute-care facilities have “dynamic” differences in the way they manage their supply chains, he says. While inpatient hospitals typically have a supply chain team with “robust” knowledge and capabilities, employees working in non-acute care settings “are typically assigned supply responsibilities as an additional assignment to their base function.

“Understanding this dynamic has allowed us to treat our non-acute supply chain as its own segment and has focused on building tools and processes to make this function as seamless and efficient as possible for our customers.”

As a result, the Banner Urgent Care supply chain “is similar to other non-acute entities in that site level employees manage the supply order and replenishment for their individual locations,” says Davis. The supply chain department oversees vendor selection, contract compliance, and architecture of formulary management. “This architecture allows [Banner’s] supply chain to maintain consistent product standards across all of our non-acute entities.”

He also notes that shifting from a zone-based to a site-based ordering model has allowed supply chain executives “to empower end users at the site to ensure they have the supplies they need.”

A consistent approach to management of non-acute sites allows the supply chain department to “stay lean” while still delivering a high-quality level of service for customers, says Davis. He attributes the success of Banner’s non-acute supply chain to non-acute supply chain director Kendra Moravek.

Under Moravek’s leadership, “our non-acute oversight has doubled over the last three years without adding any [full-time employees] on the supply chain team,” says Davis. In 2016, he notes, Banner’s non-acute supply chain was “able to achieve a total of $450,000 in supply and purchased services savings,” and he expects a similar level of success for Banner Urgent Care.

Davis strongly recommends that supply chain executives preparing for similar acquisitions to that of Urgent Care Extra by Banner build a merger and acquisition project plan and have a preset defined deployment team for this kind of work. These two items will allow the supply chain team to respond quickly to new acquisitions, he says.

Additionally, he notes, it is important to keep the acquisition team actively engaged even after the acquisition has been completed, “to ensure all of the contracts and supply standards are hardwired.”