The document summarizes a discussion on improving healthcare supply chain operations through eProcurement strategies. It identifies three key components of a winning strategy: 1) improving data management through item master management, 2) driving automation through eProcurement and touchless transactions, and 3) appointing an eProcurement MVP. The discussion provides examples from UPMC of realizing cost savings and other benefits through improved compliance, reduced exceptions, and rapid supplier enablement using these strategies.

1. January 9, 2010
Moderated by:
Jack Colletti - CEO, Prodigo Solutions
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2. Learning Objectives
• 3 key components of a winning eProcurement strategy
• How you can cut costs by reducing special requests and match
exceptions
• How you can rightsize your item master and automate content
updates
• Where the savings are "hiding" in your supply chain operation
• Why telecom expense management needs to be a top priority
• How you can get supplier punchout connections enabled in weeks
(not months)

3. Prodigo Solutions is focused on
helping healthcare providers to
drive interoperability and
automation their supply chain
operations.

4. Panelists
Michael DeLuca Brian Bichsel Max Rothwell
Director, Supply Chain Director, Material Systems Manager, MMIS
Solutions & Consulting
Services
Becky Walkinshaw
Manager, Purchasing
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5. How Healthcare Purchasing Really Works
Healthcare purchasing organizations struggle with waste and
inefficiency and are slow to adopt enabling technology.
Manual
Invoices &
Payments
Suppliers -
Not Approved AP
Paper Disbursement Requests
ERP
system
Purchasing ERP
Dept. system
Paper
Requisitions
Location Manual Approved
Purchasing P.O.
Suppliers
Contract Match
Users are frustrated; Poor data
compliance Automation is exceptions result
search is slow and
eroded by rogue non-existent
quality; no data
in extensive Opportunity
cumbersome standardization
spending rework
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6. Pain: Data Management / Standards
Many
providers
have item
masters that
are bloated
and full of
items that are
non-strategic.
Savings
comes from
“right-sizing”
the item
master.

7. Pain: Poor Supplier Connectivity

8. Pain: Internal Services (waste)
Catering
Print
Telecom

9. Pain: User Experience…
How it Should Be…

10. How it is today…

11. Select Clients
Solutions
Consulting Services
ProdigoDNA™

12. Pain Points = Opportunity for Savings
• Poor contract compliance  waste
• Data Management and item-level detail is poor
• Minimal or no automation
• Manual processes = unnecessary FTE costs and waste
• Large volume of AP exceptions = rework / waste
• No Single User Interface  many “one off” connections
• Punchout pricing is inaccurate; no way to audit
• Excessive Purchase Order-to-Supplier transaction time
• Heavy reliance on GPOs  minimal local contracting

13. Pain: Resource Constraints

14. Presenter
3 Key Components of a
Winning eProcurement
Michael DeLuca Strategy
Director, Supply Chain Systems &
Consulting Services
UPMC

15. What the CFO Wants…
PO Transactional Productivity
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16. What the CFO Wants…
Procurement’s Cost (or Investment)
Procurement cost as a percent of spend
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17. Component 1:
You Must Improve Data Management
3 Simple Rules for Item
Master Mgmt
1. Inventory
2. PAR Cart
3. Supports strategic process
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18. Data Management – Best Practice
A Platform for Driving Automation
eCommerce Capable Sites
Local Hosted Catalogs
•Drive UNSPSC or GS1 standards
•Built-in punchout price audit
GPO Catalogs
Item Master Data
Cancer Internal Services / Specialized Processes
Item Center
Item
master Pharmacy
master Ops

19. Don’t Let Your ERP/MMIS
Platform Hold You Back
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20. Driving Rapid Supplier
Enablement
Brian Bichsel
Becky Walkinshaw

21. UPMC Marketplace Growth
Enabling Marketplace Suppliers Drives Compliance and Efficiency
June 2007: UPMC implementation
2008: UPMC grew significant supplier connections
2009: Ecosystem of content keeps growing = significant savings, automation and user adoption
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22. Component 2:
You Must Drive Automation
•E-Procurement
•Lights Out Transactions
•AP Transactions
2010 Resolution: 30% of all PO activity
= Lights Out!
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23. Case Study: Real Results
Results to date:
UPMC Purchase Order Transaction Productivity (Annual)
• $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”
• 40% reduction in special requests
• 40% reduction in time dedicated to item master
management
• 35 suppliers on-boarded in 24 months

24. The Drive for Automation
Max Rothwell

25. Component 3:
You Must Get an MVP
 Accountable for Results
 Process Focused
 Technology Savvy
2010 Goal: Promote (or hire) Your
“E-Procurement MVP” in Q1
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26. Recap: Learning Objectives
 3 key components of a winning eProcurement strategy
 How you can cut costs by reducing special requests and
match exceptions
 How you can rightsize your item master and automate
content updates
 Why Telecom Spend needs to be a top priority
 Where the savings are "hiding" in your supply chain
operation
 How you can get supplier punchout connections enabled in
weeks (not months)

27. Contact Info
Jack Colletti
412.370.7177 (direct)
jack@prodigosolutions.com
Visit: www.prodigosolutions.com