prodigo webinar series: your eprocurement playbook: 5 must have strategies for driving real savings

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Healthcare eProcurement Playbook:5 Critical Strategies for Driving Real 

Savings 

Michael DeLucaDirector, Supply ChainSolutions & ConsultingServices

Becky WalkinshawManager, Purchasing

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5 Key Strategies

E-Enable your Requisition-to-Pay Process

Implement a Content Management Strategy

Create a Platform for Compliance

Drive Automation

Uncover New Savings Opportunities

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We help healthcare providers

improve margins by drivingautomation and interoperability in

their supply chain operations.

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How Healthcare Purchasing Really Works

4

Suppliers -Not Approved

Purchasing

Dept.

AP

ManualInvoices &Payments

ManualP.O.

ManualInvoices &Payments

PaperRequisitions

Paper Disbursement Requests

Location

Purchasing

ERPsystem

ApprovedSuppliers

Healthcare purchasing organizations struggle with waste and

inefficiency and are slow to adopt enabling technology.

Users are frustrated;search is slow and

cumbersome

Contractcompliance

eroded by roguespending

Automation isnon-existent

Poor dataquality; no datastandardization

Matchexceptions result

in extensiverework

Opportunity

ERPsystem

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Margin Killers…

Limited search functionalityEroded contract compliance

Large volume of AP exceptions = rework / waste

Excessive special order volume

Poor item-level detail

Not leveraging supplier technical capabilities / resources

Not maximizing local contracting

Minimal or no automation

Manual processes = unnecessary FTE costs and waste

Excessive Purchase Order-to-Supplier transaction time

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The Content Conundrum

6

Manyprovidershave itemmasters thatare bloatedand full of

items that arenon-strategic.Savingscomes from“right-sizing”the item

master.

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Pain: Poor Supplier Connectivity

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Pain: User Experience…How it Should Be…

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How it is today…

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Pain: Internal Services (waste)

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Catering

Print

Telecom

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Systems

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Michael S. DeLucaDirector, Supply Chain Solutions & Consulting ServicesUPMC (University of Pittsburgh Medical Center)

PeopleSoft Enterprise Version 9.0

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UPMC Snapshot

Revenues: $8 billion

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Employees: 50,000

Hospitals: 20

Physicians: 5,000

Beds: 4,200#330

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UPMC’s Supply Chain Environment

Spend Managed: $1.8 billion

Team: 200 team members; centralized supply

chain management organization

Suppliers: 12,000+ active suppliers

Volumes:

Process 4,000+ purchase requisitions per week

Receive 1.1M packages per year; central distribution

center

Manage over 600 point of consumption material carts

(avg. 172 items per cart)

Process 70,000+ invoices per month

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Right Size Your Item Master

Compliant Item Content Can Reside Outside of Your PeopleSoft Item Master! 

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Pain: Data Management

Item masters are bloatedand full of items that arenon-strategic.

Savings comes from

“right-sizing” the itemmaster.

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How to Improve Data Management

1. Asset Inventory

2. PAR Cart

3. Supports Strategic Process

(Billing, OR, EP Lab etc.)

3 Simple Rules for ItemMaster Management

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Extend Your ERP!

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UPMC’s Platform: Extending the ERPeCommerce Capable Sites 

Internal Services Item Master Data 

•Drive UNSPSC or GS1 standards

•Built-in punchout price audit

Local Hosted Catalogs 

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Learn the Google Lesson

User Interface, User 

Interface, User Interface,

Dynamic Search! 

d f

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Images & Product Specifications

VS.

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Incorporate New Sources of Content

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Deploy Best Practice Processes

•Close down non-controlled, non-compliant P2P flow paths

•Incorporate eCommerce language into contract templates

•Incorporate internal service operations (Print, Catering,

Telecom etc.)

•Use of pop-ups/forms/websites to capture strategic

information needed for order (Serial #, Lot # etc.)

•Think “Lean”

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How A $8b 20-hospital system Drives Compliance and

Automation

• $3M in estimated annualized hard-dollar savings

resulting from improved compliance and

automation

• 40%+ increase in contract compliance

• 100% e-Enabled (all requisitions originate via

eprocurement) with 40% of all purchase orders

fully automated or “touchless”

• 50% reduction in special requests

• 40% reduction in time dedicated to item mastermanagement

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UPMC Purchase Order Transaction Productivity (Annual)

Results to date:

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Becky WalkinshawManager, Purchasing

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OSUMC Before eMarketplace

• PeopleSoft with eProcurement• No punchouts

• Large Item Master

• Poor search capability

• No capability to highlight specific vendors

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Transition to eMarketplace

• Removed low usage items from item master andreplaced with hosted catalogs in the marketplace

• Created shopping experience for requisitioners toeasily find items

• Leveraged punchout capability to connect toProdigo

• ProdigoMarketplace provided the capability to

load local vendor catalogs and spotlight specificvendors specifically those used by the OR

• Uploaded the OSUMC Item Master to theProdigoMarketplace for better search feature

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OSUMC after eMarketplace

• Reduced item master from 40K SKU’s to 21K SKU’s in 6

months due to local catalog hosting

• New suppliers and new contract data can be added in

less than 30 minutes with no technical resources• New punchout vendors are connected to the

ProdigoMarketplace and on boarded by Prodigo

• Streamlined “bill only” process to reduce time spent on

PO creation• Orders from eMarketplace generate a PO automatically

once approved, removing the buyer from the process

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RECAP: 5 Key Strategies

E-Enable your Requisition-to-Pay Process

Implement a Content Management Strategy

Create a Platform for Compliance

Drive Automation

Uncover New Savings Opportunities

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Q&A Session

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Contact Information

 Jack Colletti412.370.7177 (direct) jack@prodigosolutions.com

Visit: www.prodigosolutions.com