The Dallas-Fort Worth area health system used the pandemic to increase supply chain transparency and add technologies to increase diversity in its vendor pool.
Shaun Clinton is one of the few supply chain leaders who can admit to not running short of personal protective equipment during the early days of COVID-19. Texas Health Resources staff was able to continue using new PPE, while maintaining the clinical protocol. Once the supply chain team determined there was enough product on hand and in the pipeline chain, they wanted to be transparent about what was available and usage statistics, says Clinton, the senior vice president of supply chain management at the Dallas-Fort Worth area health system.
"I'm a huge proponent of shortening supply chains on critical items," he says, something that came in handy during the early months of the pandemic. Texas Health already had a partnership with PPE manufacturer Prestige Ameritech, located outside Fort Worth. The health system was procuring 100% of their N95 respirators from them when the pandemic hit, along with a good portion of their isolation gowns. In January 2020, Clinton met with the company and said "we know this is probably the big one we've talked about for a long time. What's it going to take for me to basically take control of the supply chain on some critical PPE items and further our partnership with you?"
Procuring enough PPE was important for Clinton, who is responsible for all Texas Health's centralized purchasing, a system with 25 acute hospitals and around 30 ambulatory surgery centers, 15 imaging centers, 18 urgent care facilities, and 250 physician offices.
Clinton did not want to be beholden to long supply chain lines, one reason for the Prestige Ameritech partnership. It was not a protectionist agenda, he says, "This is simply a practical reality. The shorter the supply line, the easier it is for me to manage." In May, Texas Health was among 15 health systems, plus Premier, to acquire a minority stake in Prestige Ameritech, committing to purchase a portion of respirators for the next six years. During the early part of the pandemic, Clinton did supplement N95 orders with purchases from other companies, along with isolation gowns from another nearshoring source.
Creating transparency through a dashboard
The pandemic accelerated Clinton's goal to make the Texas Health supply chain more transparent. Supply chain transparency is difficult for several reasons. One is that it is hard to explain to people what the supply chain is. "I live in an esoteric world. I can't even explain to my parents what I do for a living," he says. Up until COVID, supply chains were taken for granted. "No one really dives deep into supply chain unless you've made it your career." That means that supply chain staff must explain what it is, so people can understand why it impacts the health system.
The second reason transparency is difficult is because the supply chain is opaque. It's hard to know where an end product is manufactured, let alone backtracking to know the source of all components making up the end product. "People look to the Far East to be economically viable in the supply chain," he says. When products are produced far away, it is harder to be transparent.
To show the health system what critical supplies they had on hand, what they burn through on a daily basis, and how many days on hand they had, Clinton's team developed a dashboard. They have since expanded the list of included items, showing the days on hand and availability of these items at 30, 60, and 90 days, and sometimes beyond that. "We're in the middle of a tough 18 to 24 months stretch because of external factors impacting the global supply chain," he says, "so we need to be very transparent there."
Senior Vice President of Supply Chain Management Shaun Clinton/Photo credit: Texas Health Resources
The dashboard, created by his staff and updated automatically, is viewed by numerous teams, from top executives to materials management, who make decisions based on the dashboard. In the early days, some staff members thought the health system needed 200 days of inventory on hand. When translating that into storage needs, people realized there was no 10-story building available to warehouse everything. "Part of being transparent is saying, 'Here's what you need, and how much that represents, and can you store this on site?' Or, 'If you want more, you will have to find a place to put it,'" he says.
Some supply chain staff may fear transparency, as others may questioning decision-making and performance. But "being opaque causes more angst that being transparent," Clinton says.
Technology has also helped Clinton further his goals to increase supplier diversity, equity, and inclusion (DEI) efforts. While DEI has always been important to Texas Health, he says, over the past 18 months they realized they could do more. He sees DEI as a top priority, "making sure that what we do with suppliers represents our community as a whole." It's not just about providing great healthcare, but also creating fair and equitable opportunities for everyone in the communities they serve, he says.
In the past, Clinton and other Texas Health supply chain professionals had a hard time finding more diverse suppliers. "I simply didn't know who you were and what business you were in," he says, leading staff members to ask vendors they knew to provide RFPs on paper. They created a flowchart of their sourcing process, and realized that suppliers didn't know how it worked. They codified it and began using an online bid tool, allowing them to reach a wider audience. "Now we're not just dealing with folks we know," he says. They also created a diversity dashboard to track goals by month and by category, instead of just using Excel.
Texas Health found its biggest opportunity to increase diverse spend so far in purchased services, such as using window cleaning companies or pool cleaning companies for their fitness facilities. They are also prioritizing the use of diverse subcontractors in building projects.
Data and supply chain trends
Clinton finds data helpful in benchmarking. There are plenty of opportunities, he says, to benchmark against other health systems, but it is hard to normalize the data. "I can look at peers and see how they're doing. But if they're all crappy, and I'm just the best of the crappy," that doesn't help Texas Health, he says. There are plenty of opportunities to benchmark across Texas Health entities, though, seeing if they are using the right amount of supplies based on the census, for example. "I have to meet the goals for Texas Health. That's why I look across our system, make sure we're always getting better."
Macro trends in the global supply chain are an "utter disaster," he says, and that impacts Texas Health. He likens it to playing a game of whack-a-mole. "Every day it's something different," he says. He sees the future including artificial intelligence and machine learning to create faster demand signals, which will allow him to make the best procurement decisions.
As the world climbs out of the pandemic and moves into an endemic stage, Clinton also sees a well-run healthcare supply chain as being a competitive advantage, much like has happened in some other industries. When the supply chain normalizes, it needs to remain highly visible to senior leadership. "That will encourage everyone to become more transparent."
Deborah Abrams Kaplan is a contributing writer for HealthLeaders.
Shorten the supply chain by partnering with an on-shore vendor for critical items.
The purchased services area can increase vendor diversity in the local community.
Making information transparent can help with planning at all levels, and calm fears in those who want to hoard supplies.
By allowing online bids, health systems can reach more diverse vendors.