Piedmont pushes performance measures beyond their limits
FROM the start about a decade ago, the
Under the guidance of a new Vice President, the Supply Chain team sought to establish recognition as a "national leader in creating value for its organization," according to its vision statement, where "clinicians and team members know that they have the resources and internal support they need."
As the nation descended into an economic recession, the Supply Chain team members knew they had their work cut out for them to provide high-quality, standardized service to their four hospitals. Generally, as you develop and implement a performance improvement program you envision the time when you can sit back and watch the "machine" operate, making necessary tweaks here and there to compensate for unexpected developments.
Piedmont's Supply Chain team, however, hasn't taken the time to do that. Since 2012 and during its long road to recognition, Piedmont has nearly tripled in size, adding at least one acute care facility to its ranks annually for the last three years.
To paraphrase and adapt a segment of one of
Piedmont's Supply Chain embraced an intriguing ideal early on - one that included a single ERP system, a single item master, a single electronic medical record, a systemwide value analysis program that includes and coordinates clinicians and departments throughout the IDN and a "One Touch" customer service philosophy designed to "minimize inconveniences and ambiguities" through clear communications and managing expectations, and delivering standardized procedures and products. These were etched in place against a backdrop of absorbing new facilities that brought with them new staff members and attitudes, different habits and practices and each year yet another opportunity to test the resolve and resilience of their program.
The foundation to make that happen is built on trust and can take years to build based on outcomes that benefit others, namely the customers and the patients.
"It has taken years and a demonstration that Supply Chain, exists to serve the mission and the organization, not the other way around," acknowledged
Expectations and trust didn't appear overnight, but they had to start sometime, reflecting off Supply Chain's vision. Everything began with a simple question, Colonna recalled.
"Simply stated, we asked senior leadership, 'What do you want from your Supply Chain?'" he said. "Savings is a given. What else do you want? The cool part is our Chief Administrative Officer at the time,
Piedmont's Supply Chain team values their customers and it shows - not just through performance improvement, operational efficiencies and expense reduction initiatives. They relish the daily "Thank You" and cover the walls with written notes of appreciation that provide evidence of their commitment and motivation to succeed for the caregivers and patients.
"We have earned [trust] by delivering results," emphasized
For their resilience, resolve and return on investment,
Peeling the onion
Clever marketers can use nuanced names and slick sloganeering to cover or gloss over a moribund program. Not Piedmont. Supply Chain developed the useful programs first before branding them with specific purposes in mind.
One Touch, which debuted in 2014, is but one example. Supply Chain designed it, by and large, to "manage the customer" more effectively and efficiently through what could be a complicated and frustrating process fraught with turf wars, silos, errors, duplication, cost overruns and backdoor buying.
"Conceptually, there is nothing that unique to the idea of providing good customer service, and there are lots of organizations doing it," Colonna admitted. "'One Touch' was a concept that we felt the organization and team could rally around and gave us a common language."
Of the six tenets that reflect the One Touch customer focus, Colonna identified which he thought were the easiest and hardest to carry out.
"[The] easiest [is] probably to manage the customer through the Supply Chain process," he told HPN. "Our team is already very customer-focused. We just have to remember that we do this every day, but the customers do not.
The flip side involves tentacular decision-making.
"The hardest was when we decided to be the pivot point for all the other areas that may need to be included in the device/ equipment/service review process," Colonna admitted. "This sometimes leads to Supply Chain being perceived as holding something up when in reality we may be waiting on feedback. However, this is better than cutting a P.O. and then finding out I.T. needed to be included in the review after you already [had] bought something. In the past the customer was responsible to make sure all the areas were included, but they may not have the expertise or experience to know which departments to consult. [It's] very frustrating for them.
"We try to keep the customer in the loop on where things are in the process and we try to be good facilitators and project managers with the other departments," he continued. "I find that the underappreciated skill set for many contract and sourcing people is communication, facilitation and project management. I would say that today, that skill set represents 75 percent of the job."
Some might bristle at the thought of "managing" the customer versus "servicing" the customer. Certainly,
"'Manage the customer' relates to the management of their expectations," Milton said. "In most instances in life, disappointment is directly traceable to unmet expectations. We believe that honest, proactive setting of expectations is the best way to manage a customer's experience. In this sense, it is synonymous with customer service. The foundation of customer service is setting clear and achievable goals with accurate wait time and proactive communication when any of those factors change.
Piedmont's Supply Chain maintains a self-help list that it uses to set operational parameters, performance improvement and customer service, titled "7 Steps to Tighter Controls." (See the list at www.hpnonline.com/7-steps-tighter-controls/.) Essentially, the "7 Steps" establishes Supply Chain as the gatekeeper for products and services entering the organization, expectations for resource review and accountability for non-compliance.
Actually, it's more orderly than scarily draconian, with the Csuite's buy-in and blessing, according to Colonna.
"We vetted this concept with senior leaders at the all levels and then rolled it out to the directors and managers at all sites," he said. "With that feedback we tweaked it some. This was also a joint venture with legal and compliance. All of our vendors and their representatives sign off on their understanding as well. At the initial role out, we did get some gnashing of teeth, but honestly, many of our customers understand that this protects them, their physicians and patients. In fact, some leaders like to invoke 'Joe Colonna's 7 Steps' to manage bad representative behavior."
Unfortunately, not all suppliers and sales representatives toe the line and can fall short.
"We do have tools that help us identify potential red flags," he said. "However, given limited resources, in many cases, we rely on the customers to tell us if there are issues. We do have the ability to lock a representative out of our vendor management systems and have done so on a few occasions."
Aim for the STARS
Supply Chain sought what was BEST for Piedmont clinicians, encouraging them to GO BIG and reach for the STARS. Back in fiscal 2014, Supply Chain launched the "Better Efficiency through Strategic Transformation" (BEST) initiative, which encompassed a number of savings-driven projects the department developed and led, according to Milton. BEST generated
Based on demand and trust developed with clinicians, Supply Chain then launched GO BIG to tackle a number of projects perceived to yield "the largest value propositions for the work required," Milton said. "By the time we rolled out GO BIG we had already established a history of success and built trust with the organization and physicians."
STARS, which stands for "Strategic Transformation and Resource Stewardship" and emerged later the same year as GO BIG, represented Piedmont's first system-wide approach to controlling costs, requiring executive-level support for leverage to succeed on an ongoing and large scale, Milton indicated. Supply Chain worked with the consulting firm Novia to launch the program.
STARS incorporates a detailed executive and committee framework and a value analysis structure that cost justifies investment in the process, despite questions about a perceived lack of efficiency or leanness. For example, Supply Chain supports six Non-Labor STARS teams that represent commodities, clinicianpreference and physician-preference items. To ensure product/ service conversion quality, Piedmont follows a seven-phase, 137-step process. But that's largely by design.
"There is no single best process," Milton noted. There are multiple paths to achieve an outcome, each with their own pros and cons. Piedmont is seeking to provide a level of visibility and inclusivity that requires the input of several groups in the evalu- ation of new product requests and STARS initiatives. A more top-down approach requires fewer voices. Although we have achieved much in the past 10 years, we are still growing and evolving into the healthcare system that we will become. I am sure that we will continue to change in our attempts to find the right mix of top-down decision making and inclusiveness."
GO BIG recorded more than
Medical supply costs per case mix adjusted admission (a key Piedmont measurement tool) are
Piedmont's Pharmacy STARS team achieved an average of
STARS extends beyond Supply Chain to encompass a variety of areas and specialties, from hospital to revenue cycle effectiveness to physician enterprise to corporate services to clinical variation and quality to integration (of acquired facilities), Milton highlighted. Since inception, STARS generated approximately
"The STARS and One Touch cultures have brought a large degree of consistency to the ways in which we operate and in how we relate to standardization," Milton said. "It has provided a needed boost to the health system's efforts to transition from a holding company to a true system. We are probably at the half-way point in this evolution and much of the change can be seen in how the organization has embraced and continues to embrace the STARS program."
Supply Chain is on track to implement more than
Along parallel lines, Supply Chain participates on Piedmont's Quality, Safety and Service committee, aligned with Infection Prevention and improvement consultants, that oversees products and services that can impact healthcareacquired infections and inpatient-hospital quality measures. Supply Chain works closely with Piedmont physicians in product evaluations, expense management and I.T. support. Supply Chain also brought biomedical engineering operations inhouse that helped its diagnostic imaging program save more than
Managing expansion
Since 2016, Piedmont has acquired five hospitals and more than 80 physician practices, as well as added new service lines in pediatrics and trauma. Further,
During the next five years through 2023, Piedmont plans further construction, renovation and expansion that will add hundreds of beds, along with operating rooms, cath labs, electrophysiology labs and larger emergency rooms across the enterprise.
Such a rapid growth can overwhelm any organization even with the best-laid plans in place. But Piedmont's Supply Chain takes it in stride.
"We are still in the midst of integrating these hospitals into our program," Milton said. "Three of the five hospitals participate in STARS with two scheduled to join later this year. The STARS program, our PeopleSoft systems (ERP), and Epic (EMR) are rolled out to every hospital incorporated into the health system, typically - but not always - in that order. We are in various phases of this roll-out with our most recent acquisitions. The ideal has become part of Supply Chain's ongoing efforts within the organization. It would be naive for us to say that we have achieved the ideal. It represents a journey that promises to continue its evolution as new technologies and data mining capabilities make themselves apparent and as we continue to master existing ones." (See IT sidebar at www.hpnonline.com/ striving-for-single-source-of-truth/.)
Piedmont's expansion to 11 hospitals this year from four in 2012 really tested the mettle of Supply Chain's centralized distribution center as it has booked more than a 200 percent growth in the number of contracts, vendors and items, brought in by these facilities. SKUs reached their zenith in fiscal 2015 at 4,822, but this past February they plunged to 3,455, well below the fiscal 20l3 total of 4,463 carried in the distribution center.
"Historically, hospital acquisitions for Piedmont have resulted in SKU proliferation," Bonno said. "We will continue to face this challenge as we continue to grow. We have seen the most significant standardization and savings activities driven through our STARS process."
But Bonno admits more dramatic changes may loom large.
"We are quickly approaching the limits of our existing distribution center," he admitted. "We are actively making changes to increase our immediate capacity and investigating various alternatives to modify our distribution model to support the increasing demand and growing geographical footprint. We also have recently reinstated productivity metrics so there are now clearer indicators for when we need to add resources to the front line in order to support the organic growth and expanding services provided by Supply Chain Services."
Bonno highlights other ways they are driving product standardization and SKU reduction activities in the distribution center.
"While these are not always sexy large dollar savings contributors, they do provide operational efficiencies and service level improvements by eliminating redundant SKUs, freeing up space, and consolidating demand," he noted. "We approached our distribution center SKU standardization effort as a Supply Chain Operations team project. We formed several teams comprised of hospital site leaders and members of our distribution center staff. We created a project objective, developed a baseline, created a scorecard to measure results, and met regularly to drive accountability across the teams and to update progress.
"We identified opportunities for standardization by analyzing utilization across our hospitals," Bonno continued. "We focused on slow-moving items and those items that were being issued from the distribution center to only one or two specific facilities. We also used UNSPSC product categories to link similar products together to help identify alternatives. Because of the culture of stewardship and standardization that the STARs program helped to create within Piedmont, and because of the existing relationships that the supply chain hospital teams have built at their facilities, we were able to successfully work with the clinical end users to review alternatives, drive standardization and eliminate SKUs in the distribution center.
"We have challenged the overarching philosophy for stocking items in the distribution center," he added. "This has resulted in both items being added to and items being removed from the distribution center channel. We want to ensure that bringing something through the distribution center is actually adding value for the organization and not just creating additional product touch points and waste through unnecessary inventory." HPN
There is more to the story online:
* www.hpnonline.com/piedmont-supplychain-milestones-mindsets/
* www.hpnonline.com/suppliers-ignitereinforce-piedmonts-winning-ways/
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