Shining a Light on a New Supply Chain in Ontario - PowerPoint Presentation

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Shining a Light on a New Supply Chain in Ontario

Toby O’Hara, HMMS

Derek Robertson,

TransForm

Toby O’Hara

GM

HMMSToby is General Manager of healthcare supply chain provider Healthcare Materials Management Services (HMMS) in London, Ontario. Prior to joining HMMS, Toby held positions at Baxter Corporation and Source Medical (Cardinal Health). Along with being a Board Member at HSCN, Toby is also a Board member at The Logistics Institute and holds a Professional Logistician designation (

p.Log

).

Derek Robertson

Vice President

TransForm

Derek Robertson currently serves as the Vice President, Business Development at

TransForm

Shared Service Organization (

TransForm

) a leading Shared Service Organization in South West Ontario.

Derek is a strategic leader with strengths in market analysis, consumer engagement, vendor relationship management and government affairs. Derek has demonstrated vision and commitment to excellence in Supply Chain management.

TransForm Overview

TransForm SSO is an innovative organization offering a broad range of services in the areas of:Supply Chain Services Information Technology/Information ManagementProject ManagementServicing the Erie St. Clair Hospitals(SWO):

Bluewater HealthChatham-Kent Health AllianceHôtel-Dieu Grace HealthcareErie Shores HealthCareWindsor Regional Hospital

TransForm Annual KPI’s

COST SAVINGS - $7.0MManaged Spend - $500M# Invoices Paid – 200K# Managed Contracts - 1471Regional Data Centre Uptime - 99.999%Requisition Efficiency - 99%4X GHX Canadian Provider of the YEAR

HMMS Overview

Based in London Ontario, est. 1997Full service Supply Chain provider for ownersBuffet-style Voluntary Collaboration throughout regionTransparent Cost-recovery fee for serviceServicing over 20 Hospitals and other Healthcare Service Providers

~240 employees at HMMS and within London hospitals

HMMS Notable Annual KPIs

Sourcing: >150

RFxs designed for collaboration. Active participant in Ministry VORs and GPO contracts

Contracts: >2,500 active contracts for compliance monitoring

Purchasing: >100,000 POs worth >$480 Million

Accounts Payable: >700 invoices paid daily worth $1.6 Billion

Customs: Close to border with research = 100’s of imports monthly

Inventory: >5,000 items for stockless replenishment including Cardiac items for Point of Use at LHSC and Pandemic

Warehouse: 3 buildings processing ~1.8 million orders

Analysis: Data rich! Centralized supply chain data for strategic planning

Systems:

AllScripts

(McKesson) ERP with interfaces to WMS and Cerner (HIS), other Hospital ERP systems and numerous corporate solutions

Distribution: Fleet of HMMS trucks driving ~300,000 Km including Renal home patient deliveries

Site Logistics: >900 Par Carts replenished by HMMS staff 24/7

Project Specifications

Phase 1: Stockless Cart ReplenishmentComplete by March 31, 2017Conversion should be invisible to hospitalsSame productsSame methodologyRespect all contractual commitments

Harmonization must be mutualPhase 2: Harmonize pricingAlign Regional Sourcing Strategy Align GPO participationPhase 3: Relentless pursuit of efficiencyExplore technological integration opportunitiesOptimize collaborative volumes for maximum value

Why??

Distribution Market Pressure served as catalyst to conduct a business as unusual exerciseCollaboration opportunities allow HMMS and TransForm to remove significant costs from the HealthCare systemEconomic arguments leverage mutual advantages of each SSO and therefore formalized a Collaboration and Service agreement between

TransForm and HMMS

June 1, 2016Collaborative Agreement authorized by Transform and HMMS

Jul 15/16 – Mar 16/19 Contract harmonization meetings with suppliers

Sep 19/16 – Dec 19/16 Technology for order processingDec 15/16

Go live item list confirmed by

TransForm

Jan 1/17 – Mar 31/19

Price reconciliation with suppliers

Jan 1/17

Collaborative Agreement with London Hospital Linen Services

Jan 31/17 Bluewater (Sarnia)Mar 6/17 Hotel Dieu (Windsor)Apr 3/17 Windsor Region (Ouellette site)

Apr 15/17 – Mar 31/19

Continuous improvement

Jul 6/16 – Jan 1/17

Notifications to industry

Sep 1/16 – Dec 1/16

Warehouse optimization

Nov 1/16 – Jan 1/17

Technology for financial transactions

Dec 1/16 – Feb 28/17

Inventory build for Go Live

Jan 1/17 – Mar 29/17

Finalize customer requirements

Jan 24/17

Chatham Kent

Feb 28/17

Erie Shores (

Leamington

)

Mar 20/17

Windsor Regional (Met site)

Apr 15/17 – May 31/18

Operational quality reviews

May 26/17

Bell Renal site (Windsor)

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contract with 3

rd

party provider expires

Jul ‘16

Aug ‘16

Sep ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

Mar ‘17

Apr ‘17

May ‘17

May ‘18

Mar ‘19

June 1, 2016

Mar 31, 2019

How we did it

Results

Results

TransForm

has realized savings of >$750,000/yr.HMMS gaining efficiencies

Region has benefited from enhanced use of GTINs throughout Logistics process

Price Reconciliation process improving

>175 to 18 monthly

Focus on 99% only

Benefits for all regional partners!

Southwestern Ontario continues to embrace voluntary collaboration for best value

We’re not done yet!

Continuing open and collaborative dialogue on additional efficiencies

Lessons Learned

Maximum effort should be spent on harmonizing contractsPrice reconciliation work is not value added work for anybody.You can never communicate too much.

No one sourcing agency has the best price consistently. Have a clean item master!Price exceptions/discrepant invoices create significant disruptionsInterfaces, although effective, are not as good as centralized systemsTracings for Price Reconciliation are different than tracings for GPO rebate calculations which are different than tracings for market analysis. Providers aren’t always set up to generate accurately.

People are key. We are fortunate to have some of the best!

Voluntary collaboration in the quest for maximum efficiency is happening in Southwestern Ontario. It can be done!

Questions?