The Voice of Experiences

Chris Holt’s background in logistics and sourcing gives him a unique perspective on the healthcare supply chain

Chris Holt is converting years of experience looking upstream – that is, at the manufacturing side of the healthcare supply chain – into strategic initiatives on the “buy” side. He believes his perspective can have a positive impact on providers and suppliers alike. Holt joined VHA Inc. in July 2013 as senior vice president and executive officer in charge of its Upper Midwest region.

“I’m a little bit of a square peg in a round hole,” says Holt. “I’ve been in manufacturing, distribution and logistics for medical and pharmaceutical manufacturers, but now I’m on the buying end of the supply chain, representing a core of hospital systems. I understand the upstream [issues]. Now I’m trying to bring some of that expertise downstream to produce better models. That’s the excitement and appeal of my new position.”

Suppliers’ perspective
Holt, who was born in Toronto, but was raised primarily in Los Angeles, has an undergraduate degree in business administration from the University of Southern California, and a master’s of engineering in logistics from Massachusetts Institute of Technology (MIT). He was global account executive for air-freight and logistics company Emery Worldwide (now UPS Supply Chain Solutions) for several years prior to becoming a supply chain consultant with Ernst & Young and then ZEFER. In 2001 he joined UPS, and as vice president of global healthcare, led the company’s global logistics, transportation, and consulting offerings to the healthcare industry.

After examining the healthcare supply chain, UPS decided its primary opportunity was to help manufacturers streamline – through outsourcing – their supply chain, says Holt. The model fit extremely well with the needs of pharmaceutical manufacturers and medical device manufacturers with high-value goods, he says. UPS offered them an opportunity to reduce their overhead by taking responsibility for their warehousing and logistics activities.

In 2007, Holt’s career took a turn toward sourcing medical products. “I started at Cardinal Health designing new supply chain solutions; that led me to global sourcing.” Holt prepared a global sourcing strategy, which included the recommendation for Cardinal to strengthen its presence in China. Cardinal sent Holt to Shanghai to carry it out.

Three years later, Holt was named CEO of Tiger Medical Group, a medical device manufacturing, sourcing and supply chain company based in Shanghai. As CEO, Holt repositioned Tiger as an integrated, branded product supplier to the United States and Europe. (Prior to that, Tiger manufactured products primarily on a private-label basis for other suppliers.) “We started selling directly to GPOs, distributors and hospitals in the United States,” says Holt, who found himself involved in developing a U.S. distribution network for the company. In 2013, he orchestrated the sale of Tiger to a rival firm, Anatomy Supply Partners.

Provider side
The Upper Midwest region is VHA’s largest, comprising 42 health systems with more than 150 hospitals and 100 surgery centers, in the Dakotas, Minnesota, Wisconsin and northern Illinois. Collectively, Upper Midwest facilities spend $5.5 billion annually on medical product, pharmaceuticals, equipment and services.

In 2008, the region created the Upper Midwest Consolidated Service Center, which provides contracting, strategic and planning services for its members. “The idea was to take this pooled business and develop a consolidated purchasing program with suppliers, with a focus on committed volume,” says Holt.

A staff in Minneapolis provides clinical and economic-performance-improvement services, with sourcing and contracting provided by a team at Mayo Clinic in Rochester, Minn. “We try to understand what the hospitals are working on and bring them tools to help them save money and improve the safety and quality of their operations,” says Holt. “We delivered $213 million in savings in 2013 – up 30 percent from the year before.”

One of Holt’s primary missions is to direct UMCSC’s growth. “We will physically transact $2 billion of purchases this year – up from zero in 2008 and $1 billion in 2013. We feel this is accelerated movement. To drive value, you have to band together.”

He also looks forward to implementing a new strategic initiative called 2.0, which is intended to take the organization beyond traditional sourcing and contracting. “With 2.0, we’re looking at every way we can make healthcare more efficient,” he says. “We know that the way hospitals buy products today – sometimes, one box at a time – drives a lot of waste. And the way we select and convert suppliers is a fractured process.

“Everything is on the table. And we’re having discussions with our suppliers about how they can reduce waste. They’re excited by what we’re bringing them.”

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