Achieving Cost-Savings, Quality Management and Efficiencies through Supply Chain Standardization

Challenge

With supply costs predicted to exceed labor costs by 2020, Intermountain Healthcare realized that it was time to bring a strategic focus to its supply chain management. The Salt Lake City-headquartered health system, comprised of 24 hospitals across multiple states, asked its Kem C. Gardner Supply Chain Center to examine the current procurement process and determine which system-wide procurement platform would drive standardization; thus, enhancing cost-savings, quality management and overall efficiencies.

Solution

Dustin Smith, Director of Central Support of Clinical Engineering, who had already been working with PartsSource’s offerings on a limited basis, met with the PartsSource team to further explore the benefits of the PartsSource Pro managed service platform. The team ran Intermountain Healthcare’s 2018 purchasing data through PartsSource Pro to demonstrate the substantial savings they could have achieved the year prior had they been using the leading decision-support procurement platform. The “dry run” also quickly revealed the highest performing vendors, as well as when it would have been appropriate to purchase from a vetted non-OEM vendor.

“Already, we have found the price points and savings delivered by PartsSource Pro to be valuable. We believe that, in the long term, additional value will be provided by not only the modified business workflows that reduce time spent sourcing parts, but also in the expanded visibility into the parts we are using.”

Dustin Smith, MBA, CHTM Director of Central Support, Clinical Engineering

“Like most healthcare systems, our clinical engineering department was spending hours on the phone with manufacturers, figuring out which parts were needed, determining whether to repair or replace, and deciding whether to go with that vendor or to repeat the process with yet another vendor,” said Smith.

“PartsSource Pro transformed the typical individual engineering purchases from a broad selection of vendors into a centralized and standardized process that is quicker, easier and leverages buying power for volume pricing. As a result, engineers can focus on their core responsibility of ensuring that equipment is taken care of and available whenever needed for patient care.”

Continued Smith, “No longer is selecting a vendor a matter of memory or emotions when it comes to decision-making; it’s now based on objective, vendor-specific performance and quality metrics presented by the platform’s built[1]in quality management engine. Also, vendors’ reliability metrics are tracked by PartsSource Pro, which means that we can trust the platform’s evidence-based decision support to identify the best vendors for optimal quality, performance and pricing for our needs.”

In approximately six months, Intermountain Healthcare saved an average of $25,000 per month. “We’ve saved ‘real dollars’ in parts procurement with PartsSource Pro while enhancing our quality management,” said Smith. “Everything related to parts procurement now flows through PartsSource Pro, producing substantial efficiencies for our clinical engineers, as well as increased uptime for our procurement and accounts payable staff.”

Added Smith, “We’ve also improved our cost structure when it comes to equipment repair because we can rely on PartsSource’s quality engine, which promotes utilizing non-OEM The Leading Provider of Medical Replacement Parts & Comprehensive Technology Solutions PartsSource, Inc. parts when it makes sense, generating even more savings.”

“We’re setting ourselves up for success in the future with PartsSource Pro’s quality information for parts procurement,” concluded Smith. “Next year, we plan to review a full year of the deep data analytics provided by PartsSource Pro, which will allow us to run inventory reports to better manage inventory storage and mitigate equipment downtime, thereby minimizing negative patient experiences and supporting revenue growth.”

“With PartsSource Pro, we have a toolset to do even more in the future with accurate data and analytics-derived insights for optimized parts procurement.”

Dustin Smith, MBA, CHTM Director of Central Support, Clinical Engineering