The document outlines five critical strategies for improving healthcare e-procurement processes, emphasizing automation, compliance, and effective content management. It highlights challenges faced by healthcare purchasing organizations, such as inefficiencies and bloated item masters, and provides examples of successful implementations at UPMC and OSUMC. Key benefits include significant cost savings, increased contract compliance, and improved data management through strategic inventory practices.

1. Healthcare eProcurement Playbook:
5 Critical Strategies for Driving Real
Savings
Michael DeLuca Becky Walkinshaw
Director, Supply Chain Manager, Purchasing
Solutions & Consulting
Services

2. 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
2

3. We help healthcare providers
improve margins by driving
automation and interoperability in
their supply chain operations.

4. 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
4

5. Margin Killers…
Limited search functionality
Eroded 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
5

6. The Content Conundrum
Many
providers
have item
masters that
are bloated
and full of
items that are
non-strategic.
Savings
comes from
“right-sizing”
the item
master.
6

7. Pain: Poor Supplier Connectivity
7

8. Pain: User Experience…
How it Should Be…
8

9. How it is today…

10. Pain: Internal Services (waste)
Catering
Print
Telecom
10

11. 11

12. Systems
12

13. Michael S. DeLuca
Director, Supply Chain Solutions & Consulting Services
UPMC (University of Pittsburgh Medical Center)
PeopleSoft Enterprise Version 9.0

14. UPMC Snapshot
Revenues: $8 billion
Employees: 50,000
Hospitals: 20
Physicians: 5,000
Beds: 4,200
#330
14

15. 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

16. Right Size Your Item Master
Compliant Item Content Can
Reside Outside of Your
PeopleSoft Item Master!

17. Pain: Data Management
Item masters are bloated
and full of items that are
non-strategic.
Savings comes from
“right-sizing” the item
master.

18. How to Improve Data Management
3 Simple Rules for Item
Master Management
1. Asset Inventory
2. PAR Cart
3. Supports Strategic Process
(Billing, OR, EP Lab etc.)

19. Extend Your ERP!

20. UPMC’s Platform: Extending the ERP
eCommerce Capable Sites
Local Hosted Catalogs
•Drive UNSPSC or GS1 standards
•Built-in punchout price audit
Item Master Data
Internal Services

21. Learn the Google Lesson
User Interface, User
Interface, User Interface,
Dynamic Search!

22. Images & Product Specifications
VS.

23. Incorporate New Sources of Content

24. 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”

25. How A $8b 20-hospital system Drives Compliance and
Automation
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”
• 50% reduction in special requests
• 40% reduction in time dedicated to item master
management
25

26. Becky Walkinshaw
Manager, Purchasing
26

27. OSUMC Before eMarketplace
• PeopleSoft with eProcurement
• No punchouts
• Large Item Master
• Poor search capability
• No capability to highlight specific vendors

28. Transition to eMarketplace
• Removed low usage items from item master and
replaced with hosted catalogs in the marketplace
• Created shopping experience for requisitioners to
easily find items
• Leveraged punchout capability to connect to
Prodigo
• ProdigoMarketplace provided the capability to
load local vendor catalogs and spotlight specific
vendors specifically those used by the OR
• Uploaded the OSUMC Item Master to the
ProdigoMarketplace for better search feature

29. 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

30. 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
30

31. Q&A Session

32. Contact Information
Jack Colletti
412.370.7177 (direct)
jack@prodigosolutions.com
Visit: www.prodigosolutions.com