1. Supply Chain at Novant Health
Created and Presented by johnny zachery

2. Novant Health Overview
Statistics
Employees 25,135
Medical Centers 13
Total licensed beds 2,676
Outpatient Locations 485
Inpatients* ,819
Provider Appointments* 3.8M
Novant Health Overview

3. Novant Health Supply Chain Areas
Strategic Sourcing
Supply Chain Diversity and Inclusion
Supply Chain Finance
Supply Chain Administration
Supply Chain Operations and Logistics

4. Strategic Sourcing
Members of the strategic sourcing team develop and facilitate detailed sourcing strategies that reduce the total cost of ownership for contracted products and services throughout the system.
Each team member owns his or her specific category portfolio, and is involved in all phases of the category management process.
To achieve success, strategic sourcing works with diverse project teams that include physician partners, business owners, supply chain team members, and strategic vendors when negotiating and executing contracts on behalf of Novant Health.
Strategic Sourcing saves the organization millions of dollars each year through contract negotiations and managing vendor relationships

5. Supply Chain Diversity and Inclusion
The supply chain diversity and inclusion team oversees the supplier- diversity initiative for Novant Health.
They engage with system leadership, strategic sourcing and our vendor community to develop mutually beneficial partnerships with diverse suppliers, and incorporate them into our category review and bid cycles for products and services.
This team raises awareness with internal and external stakeholders, and works to expand our supplier network to include more businesses owned by women, minorities, veterans, and physically-challenged individuals.
Sometimes this team even alerts vendors that they qualify for diverse status and helps the vendor to become certified
They track key performance metrics, based on system-wide goals, and report our progress to leadership. Because of this team, we are able to ensure our vendor population mirrors that of our patients and communities.
Benefits: In addition to helping the vendor population mirror our patients and communities, using these suppliers gives the organization a competitive advantage and also grants the organization diversity spend

6. Supply Chain Finance BUSINESS INTELLIGENCE DATA INTEGRITY
The business intelligence team provides analysis of financial information regarding strategic sourcing contracts, physician compliance, diversity and inclusion spend as well as overall monitoring of supply expenses.
They use detailed scorecards and a dashboard tracking system to ensure Novant Health is receiving the maximum return on investment throughout the entire contract life-cycle.
DATA INTEGRITY
The data integrity team provides internal and external users accurate and consistent stored data, with standard rules and procedures, in order to accomplish the business decision needs of Novant Health.
-Value Add: Inaccurate data will lead a company to make incorrect decisions. Supply Chain Finance works to clean data entry and data retention to help data be accurate so supply chain can use the data to make the best decisions possible
-Example later in presentation

7. Supply Chain Administration
BUSINESS SYSTEMS
Members of the business systems team manage the item master for the entire system and create approved product catalogs for end user ordering. They confirm all items are coded correctly for appropriate charging, as well as ensure data is transmitted correctly via EDI transmissions.
CONTRACT ADMINISTRATION
Members of the contract administration team maintain the contract database for our customers so current, expired and historical contracts can be located as required. This team manages the day-to-day maintenance of our contracts and supports all of the strategic sourcing category portfolios.
NEW PRODUCT INTRODUCTION
Members of the new product introduction team work to provide a streamlined pathway for physician partners to bring new technology into the system. They appropriately vet each request to confirm there is notable benefit for our patients and staff, as well as ensure the clinical, financial and quality needs of the organization are being met.

8. Supply Chain Administration
PROCUREMENT
Members of the procurement team are responsible for the purchasing of goods and services for the entire health system, ensuring patient and clinical needs are met in a timely manner and at an affordable rate.
SUPPLY CHAIN CUSTOMER SERVICE
Members of the supply chain customer service team serve as a single point of contact for all of our internal and external customers. They offer direct telephone, or live chat support, and are able to address any supply chain related question or need. The data collected by our customer service team, allows supply chain leadership to identify training opportunities and areas of need within the system.
VALUE ANALYSIS
Members of the value analysis team provide the much needed clinical link between supply chain team members and clinical staff within each Novant Health acute care facility as well as our physician practices.
Supply Chain Administration provides great support to the organization.
-New Product Introduction and value analysis review new and existing product submitted by nurses and doctors to potentially bring new and better technology into the healthcare system.
-Contract Administration and Business Systems make sure that contracted items are in the Novant Health ordering system at the correct price with correct product information per the contract
-Procurement interacts with vendors and with hospital operations to make sure that patients have items that they need when the items are not on a contract. They also alert Strategic Sourcing and Contract Administration of new potential contracting opportunities for items ordered that are not on contract

9. Supply Chain Operations and Logistics
SUPPLY CHAIN TECHNOLOGY and TRAINING
Members of the supply chain technology and training team provide IT support and training for logistics, warehouse and hospital operations teams.
CAPITAL ASSET REDEPLOYMENT SYSTEM (CARS)
Members of the CARS team manage the general storage of capital assets for Novant Health and work with various business owners throughout the system to ensure each asset is redeployed, donated, recycled or scrapped according to policy. The CARS team also works with local organizations to coordinate the donation of medical supplies, giving communities around the world a chance to utilize obsolete or unused product.

10. Supply Chain Operations and Logistics
HOSPITAL OPERATIONS
The “face” of supply chain. This team is responsible for maintaining appropriate supply levels in all areas of our acute care facilities, as well as managing the ordering, receiving and delivering processes for all incoming products and equipment.
NOVANT HEALTH LOGISTICS CENTER
Members of the Novant Health logistics center team work to ensure all system facilities have ample resources at their disposal, and are able to efficiently acquire inventory items at the lowest fiscal cost during both normal operating and emergency situations. This team provides value- added, centralized receiving and distribution services across the entire system footprint.

11. Novant Health Logistics Center (NLC)
Overview
Built in 2006, expanded in 2009
Approximately 100,000 sq. ft. facility
Includes warehouse, conference rooms, and office space
Distribute to 13 hospitals from North Carolina to Northern Virginia
Distribute to 300+ physician clinics primarily through 3rd party couriers
Volume:
$130 million of stock & non-stock annually: 4,600 SKUs
7 – 10 trailers per night depending on order volume
Average of 7,200 lines per night (Orders picked)
Ranges from 5,000 to 9,500 lines
28,000 – 31,000 lines per week depending on census
Information Technology distribution
Almost all IT equipment is either stocked at or passes through the NLC

12. Novant Health Logistics Center Inventory Team- Ordering Stock Items
How does a logistics center buyer decide what to order and when?
Major vendors have designated order day(s)
Large, local vendors are typically ordered 3 or 4 times per week.
Non-Local vendors are typically ordered once a week.
All smaller vendors ordered based on item velocity.
Item Velocity Report- Central tool used by logistic center buyers.
Provides information such as average daily usage, quantity on hand, open order quantity, order multiple, min/max order quantities, and much more. (IC 12 Info)
Guides buyer in deciding what items and what quantities to order.
Minimum and Maximum Inventory Levels
One month maximum supply for most items
If maximum equals one month, then minimum (re-order point) is typically two weeks of inventory on hand
Items from local vendors with an excellent fill rates are sometimes lower. Items from distant vendors are sometimes kept above one month.
Min/Max is adjusted based on historical trends and/or order allocations.

13. Examples of Supply Chain’s Value to Novant Health

14. Hospital Ops Min/Max Project for Inventory Levels
What is a minmax? The Min-Max is the simplest method of inventory control. This changes us from an emotional feel to an analytical viewpoint. Based on a given historical span of time – the average daily usage determines the maximum and minimum inventory level.
Current Order Trend
-This Min/Max was happening at our Novant Health Logistics Center but not within our acute care facilities
-Current order trend is very volatile. The “red line” is the goal. Smooth out the order pattern.
What are the MMC’s/ORC’s doing on Thursday’s and Monday’s

15. Hospital Ops Min/Max Project for Inventory Levels
Benefits to the Organization
Allows facilities to regulate their ordering pattern and not be swamped entering in orders on certain days while doing nothing on other days
Regulates orders that buyers in procurement send to the suppliers
In time, nurses in the hospitals grow more comfortable with the amount of product that they see on the shelf and worry less about stock outs
Saves money for Novant Health with less overnight and second day orders from nurses overreacting when they see what they feel is low stock for products
Better manage Materials Management Coordinator’s/Operating Room Coordinator’s labor and time
Reduce replenishment trips by about 15-20%.
Increases rate of on-time deliveries to the facility and decreases Avg $/line

16. Contract Administration Pricing Discrepancies as % of PO Lines*
% of Matched Lines with a Cost Message
*Data listed in six month increments from creation of Contract Administration department,
with the exception of December 2015, which is included to show anticipated trend into 2016.
Total PO Lines
NOTES:
-Since creation of the Contract Administration Department in January 2013, pricing discrepancy as % of Purchase Order lines shows a declining trend.

17. Contract Administration Pricing Discrepancies as % of PO Lines
Benefits to the Organization
A decrease in pricing discrepancies means that accounts payable can pay invoices on time
On time payment yields less orders that supplier withhold from Novant Health
On time shipments allow hospital operations to get the products that they need so that the doctors and nurses can help patients

18. Supply Chain Finance Miscellaneous Charge Reduction
Possible reasons for increase to $60,000,000 for 2013:
-NPI not tight
-Not on EPIC (EPIC forced someone to look at these as we have to have correct charges to enter into EPIC system and bill patients)
-No dedicated resource (Contract Administration started Team focused on miscellaneous charges which helped to decrease)
CY2012
CY2013
CY2014
CY2015
Annualized CY2016
$ 36,255,732
$ 61,156,512
$ 26,091,564
$ 14,522,251
$ ,420,732

19. Supply Chain Finance Miscellaneous Charge Reduction
Benefits to the Organization
Able to appropriately bill patients
Greater reimbursement for the hospital
Helps department have a more accurate number for determining future years’ budgets
Allows supply chain finance to track surgeon cost per case to be able to give feedback to surgeons and specific hospitals

20. Cardiology Pod- CRM Project Background
A group that included members from supply chain as well as medical personnel coming together to make a decision on a product category
Team- Strategic Sourcing, Contract Administration, Supply Chain Finance, Business Systems, Hospital Operations, Novant Health Logistics Center, Physicians, Nurses, and Procurement
Team came together to discuss best products and process for the CRM (Cardiac Rhythm Management aka Pacemaker) program
This enabled physicians and supply chain to be on the same page from the start of the process

21. Cardiology Pod- CRM Project Process
The team narrowed down a large amount of vendors and diverse CRM products to three approved vendors and a no more than a few approved devices per each CRM category
Called these approved devices “workhorse” devices
Item Set Up Process
Strategic Sourcing negotiated contract term and conditions and pricing with the suppliers and got the items on contract
Contract Administration loaded contracts and contract information into the contract database and sent the item information and pricing to Business Systems
Business Systems loaded the items into the product catalog
The Supplier sends the product to the Novant Health Logistics Center (NLC)

22. Cardiology Pod- CRM Project Process
Item Ordering Process
Once the product is set up, the Novant Health Logistics Center (NLC) places a bulk order to the Vendor who sends product to the NLC
When a Physician has a CRM case, the Nurse tells the Operating Room Coordinator (ORC) which products the Physician needs for the upcoming case
The ORC places an order for the items through the online ordering system
Since the product is stocked at the NLC, the NLC receives the order and ships products to the hospital
The Materials Management Coordinator (MMC) receives the product at the hospital loading dock and makes sure that the products gets to the appropriate department for the case

23. Cardiology Pod- CRM Project Process
Item Use and Tracking
The CRM products are used on Patients by the Physician
The usage data is tracked by Supply Chain Finance to make sure that the Physicians are staying compliant to what they agreed to and to make sure that we are meeting the Vendor’s volume commitments (if we were to agree to, for example, an 80% commitment level for workhorse devices
If there is a clinical reason that a doctor needs to use a device that is not a “workhorse” device, i.e. the patient’s condition calls for a different specialty device, the doctor can go outside of the workhorse device with no penalty

24. Cardiology Pod- CRM Project Results
Vendor and SKU reduction
Increased Patient Safety
Tighter reign on what CRM products are being ordered and used in facilities
Cost Savings
Able to show chosen vendors that our usage would increase with them so able to negotiate better pricing on the pacemakers
Able to get a bulk buy discount on top of the lower pricing because stocking product at the Novant Health Logistics Center(NLC) and ordering in large quantities each time
Save on shipping costs as the NLC can ship products out to facilities next day and deliver to multiple facilities along the same route
Full organizational collaboration from sourcing the product through the use and tracking of the product