Case Study: Innovative Methods to Drive
Compliance, Automation and User
Adoption Across the Supply Chain
Michael DeLuca
Director, Supply Chain System & Consulting Services

The Environment
UPMC is a $7b IDN with 20 hospitals, 4000 beds, and
over 50,000 employees.
Profile: UPMC Supply Chain Organization
$1.8 billion spend
200 team members; centralized supply chain management organization
12,000+ active suppliers
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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Target Condition
Leverage eProcurement Investment to Drive
Adoption and Compliance
Maximize eProcurement Platform Adoption Across
the Entire Organization
Drive Lower Costs Through Compliant, Aggregated
Spend and Controlled Consumption
Develop Comprehensive Content Strategy That
Focuses Equally on Availability and Usability
Accelerate Supplier Onboarding – Weeks vs. Months
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Business Challenges
eProcurement Adoption/Compliance Lags
Healthcare eProcurement Must Facilitate Both Direct
(Inventoried/Stocked Hospital Items) and Indirect
Supply Chain Teams Focused on Maintaining 60K+
Item Master of Direct (Inventoried & Cart Replenished
Goods)
Up to 90% of Indirect Spend Non-Compliant (“Off
Contract”) or a “Special Request” Because Preferred
Supplier Content was Not Available/Accessible by
End-Users
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Supplier Enablement Requirements
Maximize Supplier Hosted Content While
Simplifying End User Shopping Experience
Reduce Number of Items Internally Maintained in Item
Master
Take the Pain Out of Item Master Management While
Maintaining the Control
Standardize and Simplify User Navigation/Shopping
Experience
Single UI to Access Item Master and Supplier Hosted
Catalogs
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Supplier Enablement Options
Pros and Cons
+ Buyer Controls Supported
- Cost Burden for Buyer and Supplier
Transaction Fees
Suppliers Must Connect to Multiple Networks
+ Enables Broader User Search
- Inefficient Search (One by One) and Lost
Control
- Heavy IT Involvement to Set-Up
+ Single UI, Single Cart Search of All Catalogs
(Stored Local and Supplier Hosted)
+ Full Buyer Controls – No Added Cost or
Complexity for Supplier Participation
UPMC Selected a Single Punchout eMarketplace to Aggregate Disparate Data Sources Into One View
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How it Works
Search agents scour your
Users connect from the ERP (or other) system to a single user contracted supply base in
interface, then search across multiple sources of CONTRACTED seconds, returning
content to build a shopping cart. Users then return to the ERP relevant, high quality
results.
system purchasing workflow.
Hosted content
(xls/csv files)
Supplier web
sites
Supplier
eCommerce Item Master files
Users log in
to the ERP
sites /
system and punchouts
connect to the
eMarketplace
to build a GPO sites
shopping cart The shopping cart is built in the
eMarketplace and returned back to
your ERP system workflow. The eMarketplace solution enables
you to harness the power of your
complex base of supplier content.
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Value Proposition
Providers Suppliers
Users now have a simple, familiar interface to source materials. •No transaction fees
They enjoy the enhanced shopping experience and save time on •Improved connectivity
their transactions. Focus is now on the primary mission: patient •Improved visibility
care.
•Rapid implementation
•More accurate pricing
Supply Chain can move toward world-class by improving
•Suppliers with
compliance, maintenance and automation. New supplier onboarding
is accelerated and A/P exceptions are minimized. Sourcing technology constraints
specialists / buyers now spend time on sourcing, instead of time- can now play in the
consuming (and expensive) transaction processing (e.g. special eProcurement space
requests, ad-hoc orders, calls, emails, etc.) •Small suppliers now
have the ability to play
CFOs drive more value from the ERP investment and now have on a level playing field
tangible savings and ROI to report due to increased spend under
with other suppliers
management, higher contract compliance and increased automation,
and a sourcing organization that is truly strategic.
CIOs have only one connection to maintain, not 5-25+ with traditional
supplier connections. Overall IT impact is minimal.
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KPIs Show Substantial ROI
Key Performance Indicator Improvement
Ease-of-Use
Search and REQ > PO Time 33% Less Time
Compliance
On-Contract Spend 60+% Less Maverick Spend
Efficiency
Automated Transactions 38% Automated – Lights Out POs
Cost to Manage Supplier 40% Lower FTE Cost to Maintain
Content
Ease of Use Key to Adoption, Compliance, and Efficiency
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The Future: Accelerate Benefit Capture
Continue Aggressive Push to Access Supplier Hosted
(and Local) Content Through Single eMarketplace
Punchout
Incorporate Services Into Marketplace
Add More Direct Connects Through Marketplace for
“Configurables” (Furniture, Clinical Equipment, Catering)
Leverage Content and Supplier Enablement to Drive
Back-End Procure-to-Pay Automation (ERS)
Segment Supply Base and Funnel Toward Appropriate
Automated Flowpath – Using the PeopleSoft SRM as the
Foundation
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• Contact
– Michael DeLuca
– delucams@upmc.edu
– (412) 647-0360
– Jack Colletti, Prodigo Solutions, LLC
– jack@prodigosolutions.com
– (412) 370-7177
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