CHRISTUS Health’s supply chain team shares milestones, mindsets that motivate success

CHRISTUS Health’s Ed Hardin, System Vice President, Supply Chain Management, for the Irving, TX-based regional integrated delivery network, shared with Healthcare Purchasing News his team’s attitudes and motivations behind what, how and why they do what they do with valuable insights on what helps them succeed.

HPN: What’s the secret formula that makes a leader in supply chain management? How does your department implement that secret formula?

HARDIN: 1. Relentless commitment to hiring the right people — attitude, cultural fit, skills, team-oriented, thought leaders, willingness and courageous to pushback — so that you surround yourself with others who’ll make you better — as in iron sharpens iron.

2. Do what you say you’re going to do. On the back of my business card it reads “because I said I would.” Through wisdom that comes from experience, I make fewer promises and commitments today than I did 10 years ago, but whatever I commit to or commit on behalf of the department, I make every effort to pull it off.

3. Transparency and authenticity with those I work for, those who work for me, and those I work with. This extends to our supplier community as well. This is most often exemplified in my putting things in context, believing that giving orders, while easy, doesn’t give others an understanding as to the why.

4. A healthy dose of tenacity.

5. Between our organizational values and Supply Chain Management (SCM) cultural tenets, there’s a good deal of underlying elements about ourselves that we need to convey, so I work purposefully and contextually to get these elements across to my team.

6. Live by the motto of giving others credit and committing to their success.

7. Finally, weave throughout our conversations the CHRISTUS Values of Dignity, Compassion and Integrity but make no mistake we value honest conversations here and we give license for others to do the same. CHRISTUS moved to make Fierce Conversations (http://www.fierceinc.com/programs) an integral part of our culture and it’s worked for us. While I deploy the above to varying degrees and varying degrees of success, these are representative of my personal values and what I value in my leaders.

The next big trend in healthcare supply chain management will be…[fill in the blank]. Why?

Tying our decisions to evidence, building that into our agreements, and holding one another accountable for realizing the benefits of that decision. I believe, though, this extends well beyond clinical decisions and applies to all decisions. Otherwise, what a supplier brings to the table is simply their unqualified position.

Some in the “C-suite” have criticized materials managers for being too technical and not strategic enough to “join their club.” Do you agree? Why?

Unfortunately, yes. But that’s changing dramatically for the good. I was a consultant for 18 years before coming back to the provider world, in part because those leading the Supply Chain and their bosses — usually a CFO — were getting smarter and more strategic. Still, we generally have a lot of great ideas but we’ve not performed the necessary due diligence to ensure they can become reality, nor do we do a great job of communicating the “ask” and the benefit. Again, though, we’re getting better.

How can consulting firms, distributors and GPOs contribute to the performance of your internal supply chain management expertise without overshadowing the department or usurping control?

First, if a third-party genuinely wants to contribute to my success then in all likelihood I’ve invited that third-party to do so. It’s a bit of irony, but in the off chance that my leadership “forces” a third-party on my department, then that sense of genuineness about the third-party goes way down. We generally work well as a team when we’ve done the inviting in, set the age and set the expectations. When third parties do the end-run in order to garner business with CHRISTUS, knowing full well that going through Supply Chain is the best path, we get put off very quickly.

What specific project did your department complete where you felt they didn’t live up to your expectations?

Historically, we depended upon our GPO for support when we probably should have been more self-reliant or, at the very least, taken a larger share of the responsibility. An example of that was deferring to them almost entirely for sourcing and contracting in the areas of purchased services and capital. Prior to 2013, at best we dealt with these areas in a disjointed manner, allowing our individual regions and even at the facility level to make decisions. Virtually no aggregation of spend took place, much Iess a cogent plan of attack. Of the things we do very well today, these areas probably took us the longest to develop a strategy around as well as to hire and develop the right talent to execute that strategy.

What specific project did your department complete where you felt they exceeded your expectations?

We have lots of success stories. Our environmental services and clinical engineering outsource companies, HHS and Crothall, who share Vendor of the Year honors with BD, have multiple stories about not just improving our organization, but also improving our supply chain, particularly in the way we’ve structured our value analysis efforts around procurement. These organizations are truly committed to our success and are high-performers themselves. When we identify these types of organizations at CHRISTUS, we say the supplier “bleeds purple” — our organizational color.

In your opinion, what is your department’s toughest administrative challenge? How might you solve it?

We live in a “what have you done for me lately world,” so what got us kudos last year, while continuing to perform that way, isn’t enough for this year. That’s the nature of our business, and frankly the upside is that this sort of environment keeps you honest and always pursuing continuous improvement. We do a great job of hiring the right people and investing in them. I’d say, on average, associates become more capable faster in our organization than other organizations I’ve seen when I was in consulting. The fact that we’re always challenged to one-up ourselves means that associates reach the proverbial “glass ceiling” faster, and it’s contingent upon myself and other leaders to reward great performance in ways other than promotion. Giving them opportunities for professional development, particularly sending them to conferences, as well as constantly stretching them with interesting work, is something we actively promote.

What is your department’s toughest operational challenge? How might you solve it?

We are so geographically spread, and historically we’ve been culturally different. The challenges with the latter are slowly diminishing, but the fact remains is that there’s a lot of miles between facilities.

What are your top three priorities for the remainder of 2016 and for 2017?

1. Implementation of supply formulary “lockdown” in our ERP system for those supplies that are sole source.

2. Operationalizing the Microstrategy Supply Chain Management performance dashboard to the facilities.

3. Selecting and converting to our new GPO. Even if that means staying with Vizient we are willing and able to change our current way of doing things to best maximize that relationship.

How does the CEO view your department? Does he or she see it as a strategic function or a support service? What resources can the department count on and will they come every year — and not just in response to clinician complaints?

I’m certain our CEO views this as a strategic function as CHRISTUS does not stand up Vice Presidents unless they are performing something positive, beneficial and strategic for the organization. With that said, Supply Chain Management reports to the System CFO, and our discussions and efforts are always done in the context of our function both as a strategic one — essential for the long term success of the organization — as well as tactical — providing immediate benefit to the bottom line.

A great portion of our work with clinicians is with nursing, and they are tremendous advocates for SCM. The same can be said of our physician leaders. I’ve heard repeatedly that SCM is a quite different animal than it was prior to 2012, and that’s attributed to our very active and intentional outreach to them, including a commitment to their being the decision makers. That commitment on our part has done more to garner their support and respect than anything else.

What are some practical, common sense ways that supply chain managers can keep patient satisfaction in mind as they’re performing their duties?

We do several things. First, we consciously listen for value propositions from our suppliers where patient satisfaction is the top 1 to 3 value-adds for the product or service they’re selling. Second, quality and outcome questions are always a part of our value analysis discussions. Admittedly, quality and outcome aren’t patient satisfaction, but poor quality or a poor outcome will usually translate to poor patient satisfaction. Third, wherever we instinctively believe that a product (e.g., beds) or service (e.g., food) will affect patient satisfaction beyond quality or outcome, we’ll incorporate patient preference in the discussion. Our recent bed standardization initiative included patient satisfaction criteria as we were allowed to pilot the manufacturers’ beds in patient care areas.

If you could change one C-suite and clinical (physician/nursing) perception of your department, what would it be and why?

From a C-suite perspective, an understanding that value means more than price. From a clinical perspective, SCM cares about value of which price is simply one component.

How can supply chain managers collaborate with other departments and professionals and convince them that their decisions are based on the financial health of the organization and not in denying them quality products or dictating patient care as the clinicians might tell the CEOs?

We give them every reason to believe that they’re in the driver’s seat when making a decision. Our role before the decision is to coordinate and facilitate the discussion with the right personnel and facts; our role after the decision is to execute. In between there is the decision, which they get to make. All that being said, we hear less of this today than three years ago but, when a clinician or any senior leader points to SCM as only caring about price or, worse yet, we aren’t allowing clinicians to make the decision, I personally jump on that and respectively remind them of how a decision was made. I will not allow others to interpret our intent or to incorrectly explain how a decision was made. We vigorously defend our approach and, in turn, deliver on clinical decisions.

How important is supply chain management for an organization during a recessionary and recovering economy?

I get asked this frequently, albeit in a different context. That is, what is SCM doing as a result of the Affordable Care Act? I’d answer by saying that we’ve always been focused on cost management and so that aspect of what SCM does is not terribly different. Where we have changed is in our expectations of performance and around the need for evidence. That being said, I don’t see us letting off the gas pedal anytime soon. Admittedly, this is one of the best years for SCM, and we continue to work just as hard. Perhaps the implication of the question is whether we’d be willing to lower our standards around decision making when the need for cost is greater. I don’t believe that but I’d probably make certain that the majority of the initiatives we did undertake had some financial benefit associated with them.

What advice do you have for professionals outside of healthcare wanting to enter into the field of healthcare supply chain management?

There’s always room for good people, and it’s an industry that needs good people to face the challenges that we’re experiencing. Don’t get frustrated by the seemingly dysfunctional nature of healthcare in general or healthcare supply chain specifically. Appreciate the history, culture and financing of healthcare and you’ll being to appreciate the industry even more. Finally, healthcare professionals, while a kinder, gentler breed, are generally passionate about helping others and that plays out in how we work together. So if that’s not your thing or making money drives you, you’re probably in the wrong business.