Knowledge Center

Learn how Baptist Health forged its traditional AP cost center into a cost savings driver.

The purpose of this paper is to share lessons learned and successes in contract management. Five years ago, Contract Management consisted of signing a few Letters of Commitment through our Group Purchasing Organization and trying to keep track of them in a three ring notebook.

The initial purpose for developing a socially responsible, closed loop supply chain was to enhance our environmentally sustainable practices by purchasing more responsible and locally sourced products.

This paper examines the journey that an organization travels to arrive at an outsource decision and the challenges that it should be alert to post contract. The Literature Review section provides a context for the recommendations offered in the case study illustration. The recommendations deliberately focus on providing proper governance and oversight during the operational phase after the contract has been awarded and is up and running.

A well-conceived strategic sourcing program starts with an analysis of the total spend or operating expenses of the organization utilizing an “ABC” analysis and category/spend segmentation matrix. This analysis allows for the prioritization of the “sourceable” or “manageable” spend as distinct from other expenses such as taxes, depreciation and interest for which different strategies should be effectively applied.

Dale L. Locklair, FAHRMM, CMRP Vice President of Procurement and Construction McLeod Health Florence, SC

The paper presents healthcare supply chain tools and strategies for navigating the Cost, Quality, and Outcomes (CQO) Movement, and explores new initiatives designed to advance the supply chain from a transactional program to a strategic contributor to organizational success.