7 lessons on supply chain management from Intermountain's Richard Beach

Intermountain Health Care in Salt Lake City is widely known as a leader in supply chain — it was among the first round of health systems to implement its own self-distribution network a decade ago, and Gartner named it the No. 1 healthcare supply chain in 2016.

Richard Beach is one of Intermountain's supply chain leaders constantly working to improve the health system's logistics and procurement services. He serves as assistant vice president of logistics and materials management and has 38 years of experience in healthcare supply chain, all at Intermountain.

Mr. Beach recently shared his thoughts on Intermountain's approach to supply chain management with Becker's.

Note: Responses have been lightly edited for style and clarity.

Question: What has been the key to Intermountain's success with its supply chain?

Richard Beach: We have good support from senior leaders in the organization, including clinical leadership, who allow us to be innovative and apply best practices from the supply chain side. Leadership recognizes the value supply chain brings to helping the organization accomplish its mission. We've also focused on hiring people with good talent, skills and the motivation to move things forward.
Q: Do you have any advice for other health systems interested in implementing a self-distribution network?

RB: Do your homework! You need to have the right geography, dollar spend throughput, leadership support and talent. These are absolutely critical to successfully implement a self-distribution program. If any of those are lacking, you have to ask yourself the hard questions. It's definitely not for every hospital or system.

Q: Is Intermountain's Supply Chain Organization working on any new projects or initiatives?

RB: We make it a priority to continue learning everything we can not only about the healthcare supply chain and its best practices, but the global supply chain. We develop different goals based on these insights, most of which focus on creating efficiency, eliminating wastes and helping reduce costs whether it relates to sourcing, logistics, materials management, etc.

Q: Is Intermountain taking any measures to mediate high drug costs?

RB: Pharmaceuticals are almost always the biggest dollar spend when you break down supply spend. Our supply chain organization has partnered with the health system's centralized pharmacy group to explore a number of different avenues on the pharmaceutical side to limit this expense. We're looking at our contracting, along with how we can help each other from an inventory management standpoint, among other strategies.

Q: How do you collaborate with other health systems on supply chain?

RB: Most of our interactions with other health systems involve sharing knowledge and best practice. We get a number of people who want to come visit our supply chain center and see what we're doing. We follow a triple aim strategy to supply chain and one of those aims is to be a model. We have a strong passion and interest to share our knowledge with the healthcare supply chain continuum. In turn, we also learn from others, communicating on everything from sourcing and contracting to transportation and inventory management.

Q: What was the motivation behind Intermountain Healthcare developing its annual Supplier Awards?

RB: One of our strategies has been to develop stronger relationships with our primary core suppliers. Providing these awards is a way to help recognize the suppliers working with us. We're trying to foster a more collaborative relationship with our suppliers and avoid the viewpoint that they're just a company we buy products from. We envision a relationship where we can collaborate on best practices to find a win-win scenario that takes cost out of supply chain.

Q: What has been your proudest accomplishment in your supply chain career?

RB: Probably the implementation of our self-distribution model. It was a massive project that had tentacles reaching all over the place. I get a lot of satisfaction from what we've been able to do. Not from the new building housing our supply chain operations, but from the people and how we contribute to patient care. That is a strong passion of mine and this self-distribution model is all about the patient. Without the passion, we're just another supply chain.


More articles on supply chain:

Premier's new platform integrates supply chain analytics with clinical outcomes
A step-by-step breakdown of the FDA's drug approval process
Opinion: Letting CMS negotiate prices will limit seniors' access to drugs



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