1. Journey from Materials Management to Supply Chain Management

2. Supply Chain Management is… “Supply Chain Management is rapidly becoming the most important aspect of business success. Those who manage their supply chain effectively will flourish and prosper, those who don't may not be around in a few years.” Logistics/Supply Chain

3. Supply Chain Director Value Analysis Coordinator Supply Chain Manager Material Support Manager Supply Chain Operations Manager Linen Supervisor Distribution Conversion Process Review Development Construction South Addition Asset Tracking Capital Process (Dual) Improve Linen Quality GPO ReviewGPO (RFP) Peds ED Construction Inventory Reduction Contract Review Scrub Dispenser (↓Users/Usage) Value Analysis Implementation Value Analysis Policy Tier MaxDirect Delivery Contract Management System EMS Linen Program Vendor Policy & Credentialing VA Management (ongoing) Office Supply Conversion Low $ Items/ Inventory Mgmt ↓ Locally Negotiated Contracts Scrub Locker System Capitated Orthopedic Implant Program Premier ASCEND Management Forms Vendor Conversion Transportation Management Purchasing Restructure Linen Committee Restructure Surgical Suture and Case Cart Management Analytical Tool Implementation Mobile Inventory Management Senior Leadership Review Process Print Shop Review Supply Chain Management is… Priorities

4. Searching for a GPO A Group Purchasing Organization (GPO) review was performed to determine if the incumbent GPO still maintained the overall best value for St. Anthony’s Medical Center. With a Value Statement showing a 20% savings advantage over the nearest competitor, Premier was chosen over 4 other GPOs.

5. Searching for a GPO Comparison consisted of:  Estimated level administrative fee  Total administrative fees generated  Net cash distributions based on share back or equity build- up/stock accounts, or both  Total cash return  Value adds  Market basket savings/cost increases  Overall best value

6. Value Analysis Defined… Value Analysis is defined as a cross-functional objective evaluation used to improve and analyze the value of a product, system or service. The overriding goal of a Value Analysis program is to decrease cost while improving performance and/or quality. Value Analysis is effective because it is the analysis of both function and cost.

7. SAMC staff member requests new product SAMC Director submits Initiator & Vendor forms to VA Coordinator Director SCM assigns request to appropriate VA Team. Item specific to 1 dept and = or less than current expense Assigned to appropriate Team for review, investigation, trial, or termination Coordinat or finds forms complete? Item added to PMM and tracked for 1 year! YES NO YES NO YES Refer to trial flow chart Trial necessary ? VA Coordinator submits forms to Director SCM for review VAC approv es request ? NO YES Return from trial flow chart YES NO VA PROCEDURE Process Flow

8. Value Analysis Summary of Initiatives Value Analysis FY2008 Summary of Initiatives Initiating Dept Identified Annual Cost Savings Identified Annual Cost (Increase) Estimated Annual Cost Avoidance Breast Center Total $ 1,120.00 $ - Cath Total $ 4088.00 $ (175.50) $ - CCU Total $ - $ (4,280.00) $ - CCU/SICU Total $ - $ (94,397.84) $ - Central Supply Total $ 2,650.42 $ - Dietary Total $ 6,958.64 $ - Endoscopy Total $ - Health Info Mgmt Total $ 164,130.37 $ - Infection Control Total $ - $ (24,063.10) $ - Interventional Radiology Total $ 35,548.50 $ (45,525.00) $ - L&D Total $ - Labor & Delivery Total $ - $ (1,259.28) $ - Materials Mgmt Total$ 1,376,052.33 $ - $ 114,116.65 OR Total $ 2,128,399.04 $ (189,042.92) $ - Respiratory Therapy Total $ 5,443.08 $ (2,056.88) $ - SWAT Total $ 6072.98 $ (1,278.80) $ - Wound Care Ctr Total $ 22,616.73 $ (180.90) $ - Grand Total $ 3,753,080.09 $ (362,260.22) $ 114,116.65 FY08 NET SAVINGS/(IMPACT) Year to Date $ 3,390,819.87

9. Vendor Credentialing Purpose To provide vendors with St. Anthony’s Medical Center (SAMC) guidelines that define appropriate methods for access to SAMC and expectations of conduct. Through our Vendor Guidelines SAMC will seek to engage vendors in a partnership that provides the highest quality products at competitive cost effective levels.

10. Vendor Credentialing Guidelines  Patient care, patient privacy, and clinical staff activity is not interrupted or compromised.  Appropriate communication is established between clinical staff and supply chain staff regarding Vendor Representative interaction.  Vendor Representatives and Hospital staff make productive use of time while on campus.  Hospital privacy, operations and financial policies are respected.  Patient, associate, medical staff and representative safety are not compromised

11. Vendor Policy/Credentialing Vendor Category# of Vendors Sales Rep with access to OR/Invasive Labs Count618 Sales Rep with access to Patient Care Areas Count238 Pharmaceutical Rep/Manager with access to Hospital Count158 Sales Rep with access to Laboratories Count103 Service Technician with access to OR/Invasive Labs/Patient Care Areas Count97 Service Technician with access to General Hospital Grounds Count97 Sales Rep with access to Administration Offices/IT Count188 Distributor Rep with access to OR/Invasive Labs/Patient Care Areas Count63 Delivery Person with access to General Hospital Grounds Count23 Distributor Rep/Consultant/GPO with access to Administration Offices/IT Count49 Facilities Management with access to General Hospital Grounds Count33 Tissue/Bone Representative with access to OR/Invasive Labs Count2 Total Reps Registered in REPtrax1669