Transparency, diversity and short supply chains: Texas Health Resources sets its sights
The Dallas-Fort Worth Area Health System has used the pandemic to increase supply chain transparency and add technologies to increase the diversity of its supplier pool.
Shaun Clinton is one of the few supply chain leaders who can admit he didn’t run out of personal protective equipment during the early days of COVID-19. Texas Health Resources staff were able to continue using new PPE, while maintaining clinical protocol. Once the supply chain team determined that there was enough product available and in the pipeline chain, they wanted to be transparent about what was available and usage statistics, explains clintonSenior Vice President of Supply Chain Management for the Dallas-Fort Worth Region Health System.
“I’m a big proponent of shortening supply chains for critical items,” he says, which came in handy during the early months of the pandemic. Texas Health already had a partnership with Prestige PPE manufacturer Ameritech, located outside of Fort Worth. The health system was getting them 100% of their N95 respirators when the pandemic hit, along with a good chunk of their isolation gowns. In January 2020, Clinton sat down with the company and said “we know this is probably the biggest one we’ve been talking about in a long time. What’s it going to take me to gain control of the supply chain on some critical PPE and continue our partnership with you?”
Getting enough PPE was important to Clinton, who is responsible for all centralized purchasing for Texas Health, a system with 25 acute hospitals and about 30 outpatient surgery centers, 15 imaging centers, 18 urgent care facilities and 250 medical practices.
Clinton didn’t want to be beholden to long supply chains, one of the reasons for the Prestige Ameritech partnership. It was not a protectionist program, he said, “It’s just a practical reality. The shorter the supply line, the easier it is for me to manage it.” In May, Texas Health was among 15 health systems, plus Premier, to take a minority stake in Prestige Ameritech, committing to purchase a portion of the ventilators for the next six years. Early in the pandemic, Clinton supplemented orders for N95s with purchases from other companies, as well as isolation gowns from another nearby source.
Create transparency with a dashboard
The pandemic accelerated Clinton’s goal of making Texas Health’s supply chain more transparent. Supply chain transparency is difficult for several reasons. First, it is difficult to explain to people what the supply chain is. “I live in an esoteric world. I can’t even explain to my parents what I do for a living,” he says. Until COVID, supply chains were taken for granted. “Nobody really dives deep into supply chain unless you’ve made it your career.” This means that supply chain staff need to explain what it is, so people can understand why it is impacting the healthcare system.
The second reason transparency is difficult is that the supply chain is opaque. It is difficult to know where an end product is made, let alone go back to know the source of all the components that make up the end product. “People are looking to the Far East to be economically viable in the supply chain,” he says. When products are made far away, it is more difficult to be transparent.
To show the healthcare system what essential supplies they had on hand, what they burned daily, and how many days they had on hand, Clinton’s team developed a dashboard. They’ve since expanded the list of included items, showing available days and availability of those items to 30, 60, and 90 days, and sometimes beyond. “We’re in the middle of a tough 18-24 month period due to external factors impacting the global supply chain,” he says, “so we have to be very transparent there.”
The dashboard, created by its staff and updated automatically, is consulted by many teams, from senior management to materials management, who make decisions based on the dashboard. At first, some staff thought the health system needed 200 days of inventory. Translating this into storage needs, people realized that there was no 10-story building available to store everything. “Part of transparency is saying, ‘Here’s what you need, and how much is it, and can you store this on site?’ Or, ‘If you want more, you’ll have to find a place to put it,'” he says.
Some supply chain staff may fear transparency, while others may question decision-making and performance. But “being opaque causes more angst than being transparent,” says Clinton.
Technology has also helped Clinton pursue her goals of increasing supplier diversity, equity, and inclusion (DEI) efforts. Although DEI has always been important to Texas Health, he says, over the past 18 months they realized they could do more. He sees DEI as a top priority, “making sure what we do with vendors represents our community as a whole.” It’s not just about providing excellent health care, but also about creating fair and equitable opportunities for all members of the communities they serve, he says.
In the past, Clinton and other Texas Health supply chain professionals struggled to find more diverse suppliers. “I just didn’t know who you were and what company you were in,” he says, leading staffers to ask vendors they knew to provide paper tenders. They created a flowchart of their procurement process and realized that suppliers didn’t know how it worked. They codified it and started using an online auction tool, allowing them to reach a wider audience. “Now we don’t just deal with people we know,” he says. They also created a diversity dashboard to track goals by month and by category, instead of just using Excel.
Texas Health has found its biggest opportunity to increase diversified spending so far in purchased services, such as using window cleaning companies or pool cleaning companies for their fitness facilities. They also favor the use of various subcontractors in construction projects.
Data and supply chain trends
Clinton finds the data useful for benchmarking. There are plenty of opportunities, he says, to benchmark against other health systems, but standardizing the data is difficult. “I can look at my peers and see how they’re doing. But if they’re all shit and I’m just the best shit,” that doesn’t help Texas Health, he says. However, there are many opportunities for comparison between Texas Health entities, to see if they are using the right amount of supplies based on the census, for example. “I have to meet Texas Health goals. That’s why I look through our system, make sure we’re always improving.”
Macroeconomic trends in the global supply chain are a “total disaster,” he says, and that’s impacting Texas Health. He likens it to playing a game of whack-a-mole. “Every day is something different,” he says. He sees the future including artificial intelligence and machine learning to create faster demand signals, which will allow him to make the best supply decisions.
As the world emerges from the pandemic and enters an endemic phase, Clinton also sees a well-managed healthcare supply chain as a competitive advantage, just as it has happened in some other industries. As the supply chain normalizes, it should remain highly visible to senior management. “It will encourage everyone to become more transparent.”
Deborah Abrams Kaplan is a staff writer for HealthLeaders.