As the healthcare industry evolves, and with the challenges brought on by the pandemic, Supply Chain leaders and their teams have had to rethink their priorities to meet the needs of the clinicians, physicians and patients they serve and support.  Strategic Sourcing and strong contract negotiation is a critical piece of this necessary evolution as many healthcare organizations are struggling financially.  Supply Chain leaders will find that without a strategic plan to improve and enhance their sourcing and contracting processes, they will fall short of meeting their financial and organizational goals.  

10 critical factors to optimize your Strategic Sourcing process (though we can argue that these are just the tip of the iceberg):

1. Set structure, goals, objectives and team expectations
   • Coaching, educating, mentoring and empowering the team helps achieve this key factor for success
   • Structures where leaders are “working leaders” and have their own individual goals will drive trust, respect and value across the team; not everyone can be a Vice President and the VPs need to know and understand the work required for the work at hand
2. Data, Data, Data-clean data and the ability to easily pull the data needed for your initiative, is a beyond critical for success
3. Embrace Technology and Artificial Intelligence-technology continues to expand and improve, failing to incorporate new technology into your process will stagnate the organization and your associates (i.e. contract management tools/database, benchmarking tools, analytic platforms, etc.)
4. Implement a Risk Management Plan-ensures the team has a plan when things go of track
5. Foster strong communication, collaboration and engagement with clinical leaders and physicians-absolutely the most important factor within healthcare Strategic Sourcing when standardization is necessary and inevitable for financial viability
   • Implement a formal Governance Structure that includes Executive Leadership, Physicians, etc. that will expedite and streamline when challenges and obstacles get in the way of progress
6. Develop strong supplier relationships-suppliers are valued partners within healthcare and by collaborating and sharing organizational goals, you will avoid a supplier management or health system management situation, where time is wasted creating alignment after the fact
   • Understand the goals of your supplier partners’ organizations to look for and capitalize on goal alignment
7. Utilize templates, standard tools and specific KPIs-eliminates the need to explain documents, presentations, etc. and allows the team to meet expectations more easily and efficiently (RFP templates, contract templates, analytic templates and processes, presentation templates, etc.)
8. Implement a standard methodology for creating a robust pipeline of initiatives and projects
   • How are you determining what categories, services lines, etc. you are going to target?
   • Look at areas of high spend, high potential savings, high Price Index, area of significant change to the market, etc.
9. Emphasis the importance of continuous improvement and adapting to changes in the market to ensure the team can pivot quickly as needed (i.e. natural disasters, pandemics, supply disruption, strikes, weather, etc.)
10. Continuously monitor and improve the process and evolve as the industry and organization changes

Enhancing these processes, and addressing the critical factors required to optimize the strategic sourcing process will ensure strong performance for the healthcare organization’s sourcing and contracting goals, which ultimately impacts financial goals.  With these critical factors in mind and an expectation to be innovative and competitive within the healthcare industry, Supply Chain teams will be on the right path to financial and organizational success.