The Proposal

Edition: March 2009 - Vol 17 Number 03
Article#: 3143
Author: Graham Garrison

The possibilities are limitless - and therein lies the challenge. Durham, N.C.-based Duke University Health System includes three acute care hospitals with approximately 1,500 beds/hospice, home health services, multiple urgent care facilities and physician specialty outpatient clinic/total purchasing volume of $1.5 billion when you add the non-labor spend for Duke University. Its patient care services are always in demand and its research and training are in the upper echelon of health systems in the United States. As such, staying on track with procurement involves sourcing "everything from basketball shoes for athletics to orthopedic implants," says Jane Pleasants, assistant vice president, procurement and supply chain management for Duke University and Duke University Health System.

So imagine the additional task of procuring supplies and resources for an expansion to Duke's Main Campus Hospital to the tune of around $700 million. The health system also applied for a CON with the state of North Carolina for a $250 million expansion of its cancer center in 2008.

Fortunately, Pleasants is well suited for the job, with prior experience as director of procurement at the University of Rochester and Strong Memorial Health System, preceded by 10 years at Vanderbilt University as associate director of procurement, before joining Duke in 1999. Her current responsibilities include procurement and contracting for non-labor spend, warehousing and logistics, overseeing an enterprising-wide SAP strategic materials management system, and overseeing strategic cost-reduction initiatives.

Recently, Repertoire asked Pleasants about what goes in to a capital expansion from the supply chain perspective, what vendors can do to get in the game - and probably most importantly - what vendors can do to maintain a healthy relationship with a health system.

Repertoire: First off, what's the status of the addition to the main campus hospital?

Jane Pleasants: Planning is continuing for this project and we are, obviously, monitoring the trajectory of the current financial environment.

Repertoire: For the supply chain, what goes into this kind of massive project?

Pleasants: We will develop a "bid calendar" for the entire project so that both vendors and key Duke stakeholders will know when sourcing teams will be formed. It's my experience that vendors are always concerned that the decision will be made without having an opportunity to propose. While we are still only in the planning process for this project, developing a bid calendar will ultimately help us manage the workload.

Repertoire: Do you get an increase in calls from possible vendors?

Pleasants: We do get increased calls. However, at the appropriate time, we will plan to share the bid calendar with the vendors so they will understand the timing of decisions.

Repertoire: New projects or not, what does quality customer service from supply partners look like to you?

Pleasants: The best supply partners are those that are as anxious to serve you as they were when they wanted to make the sale. The best of all worlds for a person in my position is to have best price, great service, and happy internal customers!

Repertoire: How should vendors approach a health system like yours?

Pleasants: I always recommend that the local sales representative first meet with the sourcing managers and find out the timing of the bid cycle (when contracts come up for renewal) for their particular product so they can be prepared when the time comes to participate in that bid. When the time comes to propose, be prepared to put best price forward and to differentiate your product from the competitor's. Make appointments with sourcing managers well in advance so that sufficient time can be set aside for the sourcing manager to give full attention to the vendor's presentation. Time is a resource that we never have enough of - so make the meeting really count. If a vendor is able to articulate why their product will be safer for patients and/or cost less - it will be more likely that their product will be considered. Changing vendors comes with some cost to the health system, so there has to be a compelling reason to change.