Judy Webb-Hapgood brings her clinical and military experience to UW Health supply chain work.

Judy Webb-Hapgood did not set out to work in supply chain. This nurse's winding and complicated career path ultimately led her to be named system vice president of supply chain and support services at University of Wisconsin (UW) Health System in September 2021. Given that she came from another large academic setting, the University of Oklahoma (OU), she was surprised what a huge change it was, she says. Getting to know the UW Health System, where she oversees supply chain for about 85 clinics and seven hospitals, mostly in the greater Madison area, wasn't easy.

"You have to be cognizant of the culture," says Webb-Hapgood. "You have to try to understand not only your leadership, but everyone's uniqueness. Every campus has a personality."

An unconventional path to supply chain

Webb-Hapgood planned to stay in nursing after finishing her studies at OU Health Sciences Center. As a new graduate, she was a first responder at the Oklahoma City bombing site in 1995, working a triage station. "As a brand new nurse, you think you’re going to change the world. I wanted to be out there making a difference," she says. Webb-Hapgood later followed in her father's military footsteps. She joined the Air Force as a nursing officer, signing a four-year contract but staying for 20 years.

It was in the miliary that Webb-Hapgood gained experience in leadership positions. She was named the Air Force's medical contingency planner after 9/11 for part of Southern California, and later moved to Washington, DC, acting as chief of staff to the Air Force surgeon general. Later she worked for the secretary of the Air Force, and subsequently became a military hospital administrator. During the war in Iraq, she began doing medical procurement domestically, to cover for those who were deployed. Finally, this was her start in supply chain. "I did too good a job, and took over almost all the medical contracting," she says.

After moving 15 times in 20 years and wanting to raise her three daughters in one place, she retired from the Air Force. But obviously Webb-Hapgood didn't retire for good. She took an entry level contracting job in the private sector for a payer. "I liked contracting. It's fun to negotiate," she says. Webb-Hapgood's portfolio grew and she began negotiating more complicated contracts. Then she was offered her dream job, moving back home to Oklahoma to be in charge of procurement for all OU campuses. "I really got to work across a large scope," she says, including buying and selling aircraft and working with athletics. "I was doing contracts that generate money rather than paying."

One highlight was negotiating with Fortune 500 companies on a regular basis. "It was like Christmas if you could go back to the president of the university to say, 'Hey! Look what I got for us!'" She planned to stay at OU and had to be convinced to interview for the UW Health role when a recruiter came calling.

"As much as I loved the academic operational side, I missed interacting with doctors and nurses, and getting them what they need to take care of the patients," Webb-Hapgood says. She now oversees the health system's supply chain, including contracting and sourcing, supply chain analytics, process improvement, and clinical quality value analysis. She also oversees support services, including culinary and dietary services for inpatient and outpatient, mailroom, transportation, courier services, sterile processing, and health technology management.

Pictured: Judy Webb-Hapgood is system vice president of supply chain and support services at University of Wisconsin Health System. Photo courtesy of University of Wisconsin Health System. 

Taking a broader view and focusing on partnerships

Given the supply chain disruptions that occurred with COVID-19, Webb-Hapgood notes that the environment is now incredibly volatile, changing almost daily. "I read auto manufacturing articles," she says. "Those items used to never truly affect the healthcare supply chain." But now things like chip shortages can impact health systems. "You now have to know what's happening in supply chain outside your purview and keep up with it."

Webb-Hapgood is also tracking the ports and doing a better job staying in close touch with vendors and other partners. "We're working closer with them than we ever had to before," she says. She works with her distributor, Medline, on port issues, when supplies need to be diverted to a different port then trucked to Chicago and Madison. "We are coordinating and talking through that and reassuring my providers that we are mitigating or putting emergency plans together," she says. The supply chain didn't do that before the pandemic. "Working closely with partners is not a luxury anymore. You have to if you're going to survive and have flexibility."

A forced reset for processes

The pandemic forced the supply chain out of its fixed ways. Previously, processes were always done a certain way. "The pandemic pushed us to reevaluate our processes," she says. The supply chain teams got complacent or stagnant, thinking inventory would just show up. There were no back-up plans. The pandemic encouraged the supply chain to get creative, she says. If a part couldn't be procured, the supply chain team looked into making it on campus.

While the early days of COVID caused health systems to fend for themselves to survive, the second round of COVID allowed systems like UW Health to look around and help others, including partners, small suppliers, and other hospital systems. They worked with a local Madison-based coffee vendor that was experiencing trouble with shortages and inflation. The vendor said they needed to raise their prices as a result. Webb-Hapgood asked how UW Health could help. To keep prices down, the coffee vendor wanted to purchase beans in bulk but needed warehouse space, which was hard to find and not affordable. Only needing enough for a few pallets, Webb-Hapgood offered them space in UW Health’s new warehouse.

When she was at OU, Webb-Hapgood offered help to community hospitals 100 miles away. "We had enormous buying power. They couldn't get anything," she says, and what they could get was more expensive than what OU was paying. Webb-Hapgood started a consortium so smaller facilities could piggyback on OU's buying power. That increased OU's volume and drove pricing down even more. It was a win-win.

Little projects can make a big difference

Webb-Hapgood is trying to make ordering easier for staff members. One laboratory found the process to order regents they used daily or weekly time-consuming and cumbersome. Someone would place a requisition, get it approved by multiple people, then finally order it. The process was delayed if someone was out of the office. The supply chain team worked with the vendor to get SKUs for the regular orders, including for bundled items, so that when the lab wanted to place its regular order, it could happen in one click. The team included IT and accounts payable staff on the project. "The entire lab department thought we were the greatest thing since sliced bread," she says, and they now get these supplies in 48 hours.

"We have to remember that there are staffing shortages everywhere. All staff is being asked to do more with less," she says. By making it easier to order, and having it delivered directly from the vendor to the clinic, bypassing the warehouse, "imagine the time I've given back to staff," including the transportation and warehouse teams.

"As a nurse, I used to hate supply chain," says Webb-Hapgood. "Now, I look back and laugh that I'm in supply chain."

Calvin Wright leads the cancer center's supply chain efforts, which also includes ramping up use of technology and data analysis to better support high reliability care.

Resiliency planning is an exercise all health systems should have done before the COVID-19 pandemic, but it is especially important now. MD Anderson Cancer Center, based in Houston, continues to engage in this process, with scenario planning and involvement in a healthcare industry resilience collaborative that works with suppliers on end-to-end supply chain resiliency. That includes understanding where manufacturers' plants are located. The health system can develop backup plans in case of disruptions in places such as China or Puerto Rico, temporarily losing some suppliers.

With the potential for hurricanes in Houston, this type of planning is important. "At any time, one of our suppliers could be knocked offline. We need to put things in place to allow us to continue to provide care," says Calvin Wright, MD Anderson's chief procurement officer, who oversees the entire supply chain.

MD Anderson is unique as a facility treating mostly immunocompromised patients. While all health systems clamored for personal protective equipment (PPE) during the early months of the pandemic, MD Anderson felt the need acutely. They were already contracting for masks with a historically underutilized business in Texas, a company that received a lot of attention during the crisis. At the time, the company was only selling to a few hospitals, Wright says. Though the mask crunch ended, "we've stuck with them because we felt it was the right thing to do. Some other suppliers were cheaper because they were manufacturing offshore." MD Anderson did not invest in the manufacturing company as some other large health systems did, but the cancer center continued showing its support through purchase orders. "I think we will start to invest in suppliers where we think it's appropriate. We do with efforts in pharmacy," he says.

Technology challenges at a large health system

Prior to joining MD Anderson in 2018, Wright worked at a health system with 23 hospitals and 26,000 employees. But these hospitals were small or medium-sized. In comparison, MD Anderson has one hospital with 743 beds and 23,000 employees. Its five outlying clinics are also large. "We're full most of the time," Wright says, and the system's annual gross patient revenue is $10 billion. "You don't find many hospital organizations like that."

During COVID, Wright's team put together dashboards to show inventory of days-on-hand for vital PPE. They also held daily briefings across the organization. Now that the crisis is over, the supply chain department is focusing on its operating model and technology. "People, process, and technology. We have to align all those components if we're going to be effective," he says. They hired a consultant to help them start this modernization process, which includes information systems upgrades.

Wright says they are also looking at different skillsets when hiring staff members, to ensure they are aligned with this operating model. They will hire more analysts trained in data and visualization tools and predictive analytics, which came in handy during the pandemic. "They will have to be more analytical, use more technology," he says, as the executives prefer charts and other visual aids. As more technology is integrated into the operating model, its supply chain will increasingly be technology-driven.

The department will also focus on the process, demand planning, and how supplies are delivered. That includes changing how academic faculty and physicians send demand signals to the supply chain. The data will be used to determine the best time to replenish supplies, when they have enough on hand for surgery, procedures, and patient care. Technology will also help them continue to improve predictability in operations, concerning supplies and services.

"We have to work smarter," he says, as supply unpredictability is difficult to manage. "We're keeping up, but it takes an hour meeting with a multidisciplinary group every time we have a supply issue." They use manual efforts such as phone calls to discuss how many patients are scheduled and match this up with days-on-hand for inventory and expected delivery dates. "We feel we can do that more seamlessly."

The MD Anderson supply chain department is also evaluating the feasibility of building a consolidated service center (CSC). It would be the center of supply chain operations to modernize its supply chain and would include services such as medical/surgical distribution, distribution, regular/specialty pharmacy, some food distribution, and blood donor operations.

Wright would also like to implement a CSC warehouse management system to connect inpatient and research operations to send demand signals to the supply chain. This would use predictive analytics to anticipate supply needs for the upcoming weeks. It would also help with scenario planning, ensuring smooth operations if there is a delay in delivering needed items. "We will build that technology and process into our new operating model and make sure we have the people able to do that."

Partnering with clinical operations

The supply chain team is increasingly partnering with the clinical operations teams to support high reliability care, with an emphasis on providing safe care in all areas. "We partner with our clinical operations team to mitigate as much risk around supplies as possible," Wright says. That includes paying particular attention to expired and recalled supplies. His understanding is that MD Anderson gives more chemotherapy than any other health system in the country. The supply chain team works with the clinical team to eliminate or decrease the number of chemotherapy spills and has developed unique products with manufacturers to help prevent spills.

While the MD Anderson supply chain used to be transactional, they have made it more strategic in its partnership, using metrics to measure success. The organization has a daily readiness briefing that covers staffing issues to supplies to serious safety events, with each major segment of the organization reporting.

Departments such as diagnostic imaging, radiation oncology, pharmacy, procedures, and therapeutics report on a high level if they have what they need, then dive deeper into issues such as contrast media, where there has been a global shortage. They may discuss solutions, such as clinicians developing practice changes to reduce utilization. The department will also share when contrast shipments are arriving and discuss how many patients are scheduled who need contrast. "It helps give the supply chain department breathing room, so if we miss a delivery, we're not in terrible shape." Dashboards also help monitor the situation. "In my 30 years of experience, I have never seen a supply chain as integrated into operations as at MD Anderson," Wright says.

A broader look at DEI

Wright's biggest passion, he says, is using his responsibility and role to improve the economic well-being of the communities MD Anderson serves through diversity, equity and inclusion (DEI). "It goes beyond supplier diversity to economic inclusion, especially for underserved communities," he says. He began doing this in a previous role at Mercy Health in Ohio. When relocating the Mercy Health corporate offices, Wright's CEO challenged him not just to look at suburban neighborhoods, but to consider placing the office in an underserved community. The office with 1,000 employees ultimately moved to an economically depressed area that was 90% African-American, with a median family income below $30,000. Mercy Health spent 25% of the construction dollars with local minority and woman-owned businesses. "We didn't create many new jobs; however, 1,000 people had to find homes to live in and places to eat lunch every day."

He follows the mission of the Healthcare Anchor Network, in building more inclusive and sustainable local economies. "The premise is that healthcare organizations are normally the anchor of a lot of the communities they're in, but they're not optimizing their spend in a way to help the neighborhoods," he says. Directing spend toward local vendors creates opportunities that lead to jobs, health security, and caring for families. Allowing a local vendor to process laundry sounds simple, he says. But the laundry service employs 15 to 20 people who now have a salary, health insurance, and don't show up to the hospital needing their care written off. This can improve the hospital revenue stream as a result.

As a state-owned institution, MD Anderson must report on its goals for historically underutilized business programs to the state comptroller's office. The cancer center will spend $4 billion in construction over the next few years, and it is trying to direct a lot of that money to historically underutilized businesses. It also allocates $1.7 billion in nonlabor spend each year.

"I believe that if you really improve the economic well-being of the community, it improves everything, including the social determinants of health," he said.

Part of the supply chain team since 2005, Mark Welch continues improving and innovating, from high tech drones to low tech relationship building.

Editor's note: This article appears in the September/October 2022 edition of HealthLeaders magazine.

Mark Welch has been on the Novant Health supply chain team since 2005, and he was able to make several changes such as lowering procurement staff turnover and achieving higher savings levels after rising to the senior vice president of supply chain role in 2015. Welch continues juggling a number of initiatives while overseeing the entire health system’s supply chain functions, with more than 800 locations, including 15 hospitals in North Carolina.

Here are five ways that Novant Health is innovating its supply chain.

1. Supplier diversity

Novant’s supplier diversity program is not new – it's been around since 2006. But it received a boost in the past few years after adding an executive-level position to oversee it. "It took from 2006 to 2019 to surpass $1 billion in expenses with the supplier diversity program, which seems like a long time but is actually pretty good," Welch says. They have already crossed the next half billion mark, which took around three years. This year, they will likely spend $180 million with diverse suppliers.

Sourcing managers have goals for supplier diversity spend for tier 1 suppliers, which are direct suppliers. Team members speak to outside organizations such as the Latino Chamber of Commerce or Black, Asian, veteran, and LGBTQ business resource groups (BRGs) on how they can support Novant's diversity sourcing efforts. Last year, they asked the BRGs to each recommend several vendors that Novant could use.

One reason for the growth in spend is that Novant no longer requires vendors to serve the entire health system. This allows Novant to use smaller regional vendors, which can help build the businesses. Novant also asks their vendors to report their tier 2 spend, if they know it. "What good does it do the community if we have a tier 1 supplier who doesn't use diverse suppliers?" Welch says. He wants the Novant suppliers to also help grow the business community.

This approach isn't just altruistic. Novant hopes it engenders consumer loyalty to the organization. "With our demographics, it makes sense," he says. "The majority is the minority in most of our markets. We try to represent the population that we serve."

2. Changing delivery patterns

About 80% of Novant's inventory is stock items and most goes directly to the warehouses. Some specialty nonstock items that aren't typically carried in the warehouses due to low volumes such as knee implants may go directly to the hospitals. Novant is starting to bring a higher percentage of all supplies through the warehouses, both stock and nonstock, to free up the congested hospital loading dock area. The loading docks also receive food, mechanical parts, office supplies, and other items. "There are just too many people running around and things are not being handled correctly," Welch says. Plus, there is a lot of employee turnover in this area. "It doesn't stop. It's like water dropping on the forehead, it's torture in my mind," he says.

He wants to organize it for better flow, providing a sense of calmness for those in delivery and receiving. This won't necessarily reduce staff numbers, but some might be transferred to the warehouse, and they will all enjoy their jobs better. "They can structure their day differently," Welch says. By creating a more controlled environment for product handling, Novant can better track products, receiving, tagging, and deliver them to the floors.

He also slowed the order frequency to decrease the constant deliveries and stress levels. With the Amazon mentality, staff members were frequently ordering small quantities of items based on clinician demand, overwhelming the staff. "Stop ordering stuff and it will stop coming in," Welch says. "We were creating our own problem." They have three-, five- or seven-day periodic automatic replenishment (PAR) systems for stock items. "Now, we just have to build that in the formula on our reorder points." Nonstock items might now take an extra day to receive, but they have not received complaints from the end users. Making this change was initially a hard sell, but it's worked out. Even Amazon has switched, so that Amazon Prime deliveries are not necessarily guaranteed for the next day, he says. Amazon realized it was efficient to do this, he says.

3. Value-based thinking

Welch went from a priced-based mentality when working with vendors to value-based thinking. "It's what we can we do within our supply chain channels to reduce cost to have better value," he says. He commonly asks vendor sales executives about their goals and how they get rewarded, whether it's based on revenue, profitability, or a product line. In turn, he tells them how he's compensated, based on savings and quality. The sales executives are often surprised Welch shares this information. He then tries to work with them to make their sales goals while doing what is best for Novant. "You can be open and transparent with your vendor community, and they'll give you a win."

By giving a requested discount, Welch might agree to ask his sourcing team to promote their product to grow the company's market share, if it's a good fit. In turn, he wants the sales executives to go back to their company's pricing committee and fight for Novant's ask.

Welch also promises the vendors contract integrity. He will agree not to ask for contract changes while it’s in effect, and he will then ask for a lower price up front. Some health system executives will ask for discounts soon after a contract is signed, if another vendor offers a lower price. By sticking to his commitment, Welch gains trust and a better relationship.

4. Turning supply chain staff into SMEs, and clinicians into advocates

Before Welch took over as the top supply chain leader, about half of the 10 sourcing managers would leave each year. That was because they would constantly be taking over new service lines or product categories, learning them, trying to identify savings, and then getting switched to a different one. Now the sourcing managers have portfolios such as cardiology, and they become and remain subject matter experts. He hasn't lost a sourcing manager since, other than to promotions or other internal moves.

Welch then introduced the physician leaders to the sourcing managers to form a relationship. "Now, we have a physician partner in every one of those service lines," he says. When a physician is trying to buy supplies that aren't on contract, the sourcing manager can ask the physician leader to talk to the doctor about it. The supply chain team also shares data with physicians such as the cost of supplies per case, using physician names. They started off doing it anonymously, but the physicians asked for the identities. "They know who they're competing against, if they're competing," Welch says. They also ask what they need to do to lower their costs, which can lead to a preference card discussion. The physicians ultimately make the supply decisions based on data.

Welch created a clinical variation reduction team to look at how variation affected spending. He worked with the chief medical officer (CMO) to assign different physicians to the team, and they created a strategy based on data. With 1,800 affiliated physicians, they have plenty of talent to choose from for the teams. There is risk in reducing the number of vendors. While there's the potential to save millions in one category, eliminating a vendor could result in physicians leaving if they can't use their preferred products. This can lead to a revenue loss instead of savings.

Welch may involve the CMO to deliver the message when making higher stakes vendor changes, especially for doctors who are not employed by Novant. The CMO can explain that even if the hospital savings don't benefit the doctor, the hospital buys capital equipment for them, keeps the doors open, and saving money is the right thing to do for the community. He shows how the savings will be spent to benefit clinical care.

Drone delivery

Novant just announced it is beginning to use long-range drone deliveries to deliver products from its Kannapolis, North Carolina, distribution center. It is working with drone company Zipline. They're doing research on drone capabilities and how the service can help the health system. "The issue is you have to get beyond the visual," Welch says. "Zipline is now able to do longer distances and not have a visual during the entire flight, not having someone watching the entire time."

Novant conducted a pilot project in 2020, and the health system received Federal Aviation Administration approval for contactless delivery of personal protective equipment and emergency supplies. They plan to use drones now to deliver specialty medications to patients.

Building a system-wide approach to supply chain operations requires data, technology, and good vendor relationships.

Motz Feinberg started his new vice president of supply chain role at Cedars-Sinai at an interesting time: June 2020, a few months into the pandemic. He not only had to jump in during the PPE crisis, but also as Cedars-Sinai was evolving as a larger, more connected health system.

"I was brought on to build out the health system-wide capability," Feinberg says, overseeing the end-to-end supply chain for four primary hospitals with more than 2,000 beds, and a medical network of more than 200 physician offices and 14 ambulatory surgery centers. Feinberg's team is charged with strategic sourcing to deliver patient care to all facilities and units, responsible for analytics, contracting, analysis, logistics, and warehousing.

While he came from Kaiser Permanente, Feinberg's prior experience was outside of healthcare, managing supply chains in industries ranging from aerospace to confections. "The supply chain in healthcare is probably where supply chain was in other industries 20 years ago," he says. "It hasn't matured at the same rate because there wasn't a need to."

The pandemic provided that need, and health systems nationwide pivoted quickly to meet the demand. "Across healthcare, we're all here for the same mission: to ensure patient care," he says. To keep eyes on the mission, Feinberg shares an aerospace analogy with staff: aircraft on the ground (AOG). When a plane is grounded and needs repair, it can't make its flight schedule or production delivery date until that repair is completed. The occasional missing parts cause a delay, and aerospace staff scramble to make sure that AOG is taken care of, he says.

In the hospital, the patient is the AOG. Missing supplies mean delayed care, and the need for these supplies is daily, not occasional. "We need to make sure we are doing everything to take care of them so they are not in the hospital longer than they need to," he says.

The scramble to ensure available supplies creates a different dynamic in healthcare, he says, one allowing the organization to innovate quickly. With supply chain problems "in other industries, the only thing you risk is revenue loss," while in healthcare the patient is at risk.

Looking at the big picture

The Cedars-Sinai supply chain's top priority is to "feed the beast," Feinberg says. If the hospital needs are not met, the supply chain team is not doing its job. "This whole process we developed, and the supporting infrastructure, data, and communications paths, they're all about ensuring we're feeding the beast."

He relies on guiding principles for his health system's supply chain transformation. That includes putting service at the forefront of every team member action, including emails and phone calls. It means leveraging data-driven decisions, and developing teams that can use these technologies and tools. The team should always deliver results and add value from a supply chain perspective. "It's not always about saving dollars," especially in this pandemic age, he says. It's now also about supply assurance. Lastly, the goal is to assure that supply across the entire medical network. This addresses the strategic goal of leveraging the system's scale and becoming a unified health system from a supply chain perspective.

Pandemic lessons

Like many health systems, early in the pandemic, the media narrative focused on PPE, which only included a few dozen items. "The reality is there were over 200 different supplies [to treat COVID-19 patients] we had to secure early on that were not just masks," he says. The department is currently managing 20,000 to 30,000 individual items to support the health system, which is difficult in the currently challenging global supply chain.

Just before Feinberg arrived, Cedars-Sinai began reassessing and changing how they are using their logistics network and warehousing capabilities. They began transitioning from a bulk distribution model to a low unit of measurement (LUM) model right as the pandemic hit. This allowed the them to initially turn their warehouses into PPE storage. Some of those stockpiles remain, as California passed a law regulating how much PPE a hospital must maintain.

The LUM approach shifts inventory risk to the distributor, but it also means the health system lacks control over this inventory. Cedars-Sinai began sharing the warehousing space as a system-wide resource for back-up supplies. "It's not a hybrid [inventory] model," Feinberg notes, "but it's for all the high-risk items we're identifying." Compared to pre-COVID, the volume of these high-risk items has quadrupled, but the warehousing allows them to mitigate the LUM model risk by retaining their own inventory back-up. "It became a way for us to proactively manage the global supply challenges that are still with us."

Technology and visibility for inventory planning

During the pandemic, the Cedars-Sinai supply chain department developed several predictive models to proactively identify potential at-risk supplies. This allows them to source products sooner, to ensure patient care. "That model helped us maintain fill rate levels in partnership with our key suppliers," Feinberg says. If items are potentially unavailable, the staff can look elsewhere in their network or with other vendors. The staff looks at the signals daily, but built the algorithm rules so individuals can look at a few hundred of the most important supplies, rather than thousands of items daily. "That's still four to five times more than we were dealing with before the global supply chain challenges came to the forefront," in summer 2021, he says. "Before that, things were manageable with fairly simple tools."

Feinberg's department developed dynamic interactive dashboards to show spending across categories, departments, and vendors. This provides a better understanding to source things differently, and shows potential opportunities to consolidate spending across the health system. The technology also includes graphical tools showing fill rates and lead times. This can be used across all vendors to automatically show which supplies may have refill issues, so the staff doesn't have to scramble.  

In addition, Cedars-Sinai adopted a concept common in retail: collaborative planning, forecasting and replenishment (CPFR). "That process is about taking an even longer view so you are helping your suppliers and distributors to better plan their inventories," he says. In general, the health system maintains little inventory in the care facilities. Some systems have their own warehousing, but they do not cover everything needed. Since distributors carry most of the inventory, it's vital to have accurate processes and data sharing to help the vendors plan, so they can better serve the health system.

While it's hard to find many positive things about the pandemic, as a supply chain professional Feinberg is encouraged that people now know what the role does, and they are listening. "Historically supply chain has not been and never will be at the forefront of healthcare," he says, "but it's gotten a lot more attention."