Mercy Health Redefines Supply Chain's Role in High Quality Healthcare through New Strategic Logistics Partnership with Medline

Bold thinking, collaboration leads to 21 percent reduction of SKUs, streamlined procurement process in less than a year

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Jun 18, 2018, 12:29 ET

NORTHFIELD, Ill., June 18, 2018 /PRNewswire/ -- Medline today announced early outcomes of a strategic partnership with Mercy Health, the largest health care system in Ohio, designed to complement the system's bold new approach to supply chain, savings and delivery of care. Over the course of the advanced logistics agreement, Mercy Health is expected to realize more than $100 million in cost savings from both product standardization and process improvement initiatives. In the partnership's first year, the focus on product standardization already has eliminated nearly 2,000 SKUs, a 21 percent reduction.

Mercy Health, the largest Health system in Ohio, established a strategic logistics partnership with Medline that led to a 21 percent reduction of SKUs and streamlined procurement process in less than a year.

Logistics Enables Success
At its peak, nearly 32,000 people in the Mercy Health organization could order supplies. Implementing a centralized purchasing model led to Mercy Health identifying just three buyers per facility. Additionally, as the primary medical-surgical supplies partner, Medline consolidated Mercy Health's distribution hubs servicing the system to two, down from 14, prompting greater visibility into process, spend and savings.

"Logistics is the enabler. If we can control the physical movement of goods, we can help manage variation," says Dan Hurry, chief supply chain officer at Mercy Health. "We are driving toward future state in supply chain. Medline delivers superior supply chain logistics expertise and is eager to take this journey with us."

"This is a hands-on relationship designed to challenge the norm," says Rob Brandt, market sales director, Medline. "Our teams are co-creating value by identifying new ways to drive greater standardization and impact care. This can be seen through storeroom redesigns, bringing product from dock to unit to ensure clinicians have the right product when they need it, and even re-imagining how non-traditional goods like physician preference items can move in a traditional logistics manner."

Forging Toward Future State
While most medical-surgical products run through traditional health care supply chains, physician preference items (PPI) can make it complicated to standardize due to variations in use and procurement. A 2017 Health Industry Distributors Association (HIDA) Acute Market Survey revealed only 19 percent of all PPI currently are purchased through distributors. To navigate the new landscape, Mercy Health is collaborating with Medline and other manufacturers to launch a dynamic and consolidated PPI logistics model beginning in the third quarter of 2018.

"A lack of standardization can drive up cost when it comes to supply chain inefficiencies," says Hurry. "Health care is behind other industries that already consolidate logistics faster. When Mercy Health thinks of supply chain and standardization as connected, we optimize supply chain across our system and increase overall quality of the services we provide."

See how Medline and Mercy Health are working together to improve patient care through supply chain solutions at https://youtu.be/QNWDr9BIP5c.

Medline's vertical business model as both a manufacturer and distributor delivers cost savings to IDNs like Mercy Health so health systems can optimize their supply chain while increasing quality of care. Learn more at https://www.medline.com/pages/supply-chain/.

About Medline
Medline is a global manufacturer and distributor serving the health care industry with medical supplies and clinical solutions that help customers achieve both clinical and financial success. Headquartered in Northfield, Ill., the company offers 550,000+ medical devices and support services through more than 1,600 direct sales representatives who are dedicated points of contact for customers across the continuum of care. For more information on Medline, go to www.medline.com or http://www.medline.com/social-media to connect with Medline on its social media channels.

About Mercy Health
Mercy Health is the largest health system in Ohio and one of the largest health systems in the United States, employing more than 33,500 employees in Ohio and Kentucky. The system operates about 450 health facilities, including 23 hospitals, eight senior living communities, five hospice programs and seven home health agencies. In keeping with its mission, Mercy Health provides about $1 million per day in community benefit services. Mercy Health is a founding member of Health Innovations Ohio, which focuses on providing health services that result in higher quality, better health and greater value. For more information, visit www.mercy.com.

SOURCE Medline