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Gartner for Supply Chain

Healthcare Supply Chain


Top 25 for 2022
Gartner Healthcare Supply Chain Top 25 for 2022

Healthcare supply chain matters. When done right, supply chains improve Superior supply chains deliver
the health of a community through enabling cost effective, reliable and on the business’s purpose
socially responsible delivery of products and services that impact patients. They don’t just push products; they understand
customer value, invest in demand management
The 14th annual Gartner Healthcare Supply Chain Top 25 ranks the 25 and promote innovation against ESG. The Gartner
leading U.S.-based healthcare supply chains. Supply Chain Top 25 is a renowned annual ranking
of the world’s superior supply chains.
Healthcare supply chain leaders can use this research to build more
From financial and corporate social responsibility
resilient and socially responsible supply chains, improve patient outcomes
data and community opinion, we identify,
and optimize costs. celebrate and profile companies demonstrating
excellence in supply chain management. Clients
The methodology for the 2022 ranking reflects growing supply chain use the peer benchmarks to make the business
maturity across the U.S. healthcare industry. Sixty percent of the ranking case for supply chain transformation and the best
is community opinion from a peer panel and a Gartner analyst practices to accelerate supply chain performance.

panel. Forty percent of the ranking is quantitative data comprising Quality See the Gartner Supply Chain Top 25 most
of Patient Care, Bond Rating and — for the first time — Environmental, relevant to your geography or industry at
gartner.com/en/supply-chain-top-25.
Social and Governance (ESG). Twenty-eight percent of the ranked health
systems received a perfect ESG score, and 60% received some credit.

This report excerpts from the Gartner Healthcare Supply Chain Top 25 for
2022 research. Gartner clients may access the complete research in its
entirety from gartner.com.

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Gartner Healthcare Supply Chain Top 25 for 2022

Key themes
Through Gartner Healthcare Supply Chain Top 25 research, we note what leading organizations
are focusing on, where they are investing time and effort, and what can be applied broadly. The
following three key themes rose to the top this year for leaders in healthcare supply chains.

2022 key themes

Aligning to increasing Sustaining and building risk ESG becomes a healthcare


financial pressure and resiliency capabilities supply chain imperative

Source: Gartner

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Gartner Healthcare Supply Chain Top 25 for 2022

Aligning to increasing financial pressure

This year’s research cycle highlighted increasing financial pressure more The push-and-pull on supply chains to drive cost savings while adding
than any other year in the history of the ranking. For many years, the themes service lines and increasing resiliency puts this area at the top of our
touched on cost and efficiency related to capabilities. But this year it’s themes list for 2022, and it doesn’t look to abate soon.
different: costs are higher and margins are decreasing.

The main reason comes from increased expenses associated with COVID-19
Take action on the 5 levers for supply chain cost optimization:
surges and a lack of COVID-19 relief funding that severely impacted hospitals
Download our guide to optimizing supply chain costs

 
and health systems through the first half of 2022, as noted by the American
Hospital Association in the pessimistic view envisioning over two-thirds of
hospitals operating in the red for 2022.

With most healthcare systems’ reimbursements staying relatively fixed,


senior leaders turn to the supply chain to find more efficiencies to ease
financial pressures.

The added pressure of inflation rates at 40-year highs, additional costs for
resiliency, and the need to invest in technology, people and processes for the
future have created a perfect storm. Many leading supply chains are finding
new ways to manage costs. Their focus is twofold: Holding off inflationary cost
increases and unauthorized surcharges from suppliers, while also pursuing
improved solidarity with clinicians to deliver lower-cost procedures.

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Gartner Healthcare Supply Chain Top 25 for 2022

Sustaining and building risk and


resiliency capabilities
In this world of changing financial realities, will health systems still pay for Leading health systems are building these capabilities while leaning into
risk and resiliency, or will they shift back to procuring the lowest-cost product broader industry initiatives supported by organizations like the Healthcare
regardless of everything else? Industry Resilience Collaborative. At the same time, they are
pressuring for more transparency from big strategic vendors like distributors
Healthcare supply chains have certainly seen trends shift over time from and group purchasing organizations.
service to cost and from invest to squeeze. But in this case, our research
shows that although cost saving pressures have reached high levels, almost
every leading health system is highlighting risk and resiliency planning and Start running your supply chain scenario planning exercises:
execution capabilities. Download our supply chain scenario planning guide

 
Health system supply chains have moved from the pandemic reaction in risk and
resiliency to the planning and investment phase. Gartner’s Hype Cycle for
Supply Chain Strategy puts supply chain resiliency at the height of inflated
expectations, the point at which hopes are highest just before reality sets in.

Each system is at a different stage, but many now have a fully staffed risk-
and-resiliency leader on par with functional leaders in sourcing, logistics,
clinical alignment and analytics. These systems are not only expanding the
scope of what resiliency means, but they are also aligning their supply chain
capabilities to that effort. Some health systems in our Top 25 have invested in
demand planning and forecasting capabilities and have initiatives focused on
building resiliency in their supply chain with the use of data, systems
and analytics.

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Gartner Healthcare Supply Chain Top 25 for 2022

ESG becomes a healthcare supply chain


imperative
Like risk and resiliency, some question the staying power of ESG initiatives in To that end, ESG is an important and increasingly critical component of
healthcare. But the time for intentional leadership in ESG from the healthcare the supply chain. We are seeing tremendous progress from the supply chain
supply chain is here and leading supply chains are at the forefront. Modern leaders in our ranking this year. Most are focused on this challenge, and all
Healthcare published the “ESG Healthcare’s New Imperative” and hosted an acknowledge that the path is not yet well worn. Still, our Fall 2022 Health
ESG summit this fall. Modern Healthcare’s focus on the topic means ESG is System Supply Chain Organization Design research indicates that only 22.4%
coming to your health system, if it’s not there already. of supply chain leaders say their supplier diversity program is “Mature” or
“Very Mature” and only 8.6% rate their environmental sustainability “Mature” or
Supply chain leaders have built, or are steadily building, these capabilities “Very Mature.” It takes time to get the data, align with partners for investment
so they can navigate upcoming challenges and opportunities. It will allow and seek new ways to make trade-offs between the components of ESG and
them to lead their health systems to a more inclusive environment, be the pressures of immediate cost reduction. We see that the imperative of ESG
effective citizens of the world and lead by example as one of the largest is good business and you can do right, while doing well.
employers in their regions as many health systems are.

Purpose-driven supply chains deliver value to stakeholders:


Download our blueprint for building the purpose-driven

 
supply chain

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Gartner Healthcare Supply Chain Top 25 for 2022

Supply Chain Masters lead the way


These Masters have attained top 5 composite scores in the Gartner Healthcare Supply Chain Top 25
for at least seven out of the last 10 years (2012-2022).

Mayo Clinic Intermountain Health


• Mayo Clinic has a consistently innovative supply chain that pushes its • Intermountain Health completed its merger with SCL Health,
peers to improve. It leads by example through a sustained effort of creating a supply chain organization that capitalized on the strengths
more than 20 years at the top, with many functional leaders topping of both legacy organizations and developed an integration plan that
a decade of tenure in their roles. fostered an elevated supply chain structure.
• Mayo Clinic committed $100 million over the next 10 years to equity, • Intermountain Health implemented autonomous drones to deliver
diversity and inclusion initiatives. prescription pharmaceutical products to the Salt Lake City metro
• It created a product information management platform that broadens area, reducing carbon emissions while increasing pharmaceutical
the number of SKUs that they have robust data on from 120,000 to adherence.
650,000. • It improved supply chain capacity and resource utilization through
procurement model learnings outside the industry.

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Gartner Healthcare Supply Chain Top 25 for 2022

01 02 03 04 05
Cleveland Banner Health Corewell Advocate Ochsner
Clinic Health Aurora Health Health System

06 07 08 09 10
AdventHealth UPMC BJC HealthCare Geisinger Baylor Scott &
White Health

11 Trinity Health 16 Scripps Health 21 CommonSpirit Health Turn the page to read excerpted profiles of the health
12 Northwestern Medicine 17 Mercy 22 Duke Health systems ranked 1-10. Gartner clients may access the
complete research in its entirety from gartner.com.
13 Stanford Health Care 18 Novant Health 23 Sentara Healthcare
14 Bon Secours Mercy 19 Ascension Health 24 Providence Health
Health
20 Allina Health 25 Sutter Health
15 Rush Health
01
Gartner Healthcare Supply Chain Top 25 for 2022

Cleveland Clinic
Cleveland Clinic attains the top spot in our 2022 rankings with the highest Supply chain was at the forefront of this state-of-the-art expansion,
peer and analyst opinion scores, based on several pioneering supply chain leading several critical initiatives like implementing ERP, spend
initiatives focused on supplier diversity, clinical integration, resiliency and management and inventory management systems at the main campus.
workforce optimization. It also adopted a new approach with supplier management that states
that supply chain is global, and requirements have been elevated to
Implemented a resiliency program for monitoring supplier fulfillment the suppliers to support the global footprint.
as well as a demand planning tool with bidirectional inventory
visibility with suppliers This year also saw Cleveland Clinic participate in the Diversity Equity
Inclusion (DEI) Supplier Accelerator Program. The heavy investment
showcased it supporting supplier diversity as a proactive business
Supply chain led critical initiatives like implementing enterprise
process with a goal of promoting diversity initiatives with lasting
resource planning (ERP), spend management and inventory
impacts on local economies.
management systems
Cleveland Clinic is also leveraging technology like RPA tools as
Leveraged robotic process automation (RPA) to improve employee part of a workforce optimization initiative designed to improve
and organizational efficiency while decreasing operational cost employee and organizational efficiency while decreasing operational
costs. Using AI, big data tools and system interfaces, Cleveland
This year, Cleveland Clinic implemented a resiliency program centered Clinic is also focusing on operating room supply chain efficiency
around planning and responding to supply disruptions. Through this so that clinicians can reduce touchpoints and maximize patient care.
program, it implemented a world alert monitoring system, an analytics
platform for monitoring supplier fulfillment and a demand planning tool
for bidirectional inventory visibility with suppliers.

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Gartner Healthcare Supply Chain Top 25 for 2022

Banner Health
Banner Health holds steady at the No. 2 spot in our ranking for the second In 2022, Banner leaned into collaboration with suppliers. One large
year in a row. Banner enters its third year in the top 5 on the basis of initiative involved Johnson & Johnson in Banner’s consolidated service center
strong analyst recognition, impressive peer recognition and achievement of (CSC). By jointly analyzing decision points and purchasing patterns, the two
reaching all three levels of ESG participation with the Healthcare organizations reduced their daily shipments by several hundred and further
Anchor Network. standardized on stocked products in the CSC versus one-off shipments.
Improvement was measured at 19%, driving service improvement and
Created a 20-year strategic plan to align to growth from $1.5 billion cost reduction.
to $12 billion
Banner also participated in a unique, local collaboration through a
program from the Arizona Coalition for Healthcare Emergency Response
Through collaboration with Johnson & Johnson, reduced daily
called “Statewide Eco-System Supply Chain Resiliency.” It was a response
shipments by 19% and reduced costs
to the pandemic and showed collaboration across health systems to better
serve the Phoenix community.
Banner Health’s “One Supply Chain” initiative provides a control-
tower view to align risk and resiliency efforts to total cost to serve For 2023 and beyond, the digital supply chain dominates Banner’s planned
and agility initiatives. A “One Supply Chain” initiative complements existing robust
operational capabilities to provide a control-tower view to align risk and
Banner leads by example. It shared the model for a 20-year strategic resiliency efforts to total cost to serve and agility. Watch this space for
plan at this year’s meeting of the Association for Health Care Resource inflight efforts around point of use, inventory management and service line
& Materials Management (AHRMM), chronicling supply chain’s growing analytics.
capabilities and importance, aligning to Banner's growth from $1.5 billion
to $12 billion in size.

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Gartner Healthcare Supply Chain Top 25 for 2022

Corewell Health
At No. 3 in our ranking is Corewell Health, an organization formed from the At the same time, Corewell expanded its supplier diversity program by
merger between two large health systems (Spectrum Health and Beaumont establishing an internal impact sourcing governance committee. The
Health) in Michigan. Corewell now operates 22 hospitals and 300 committee is tasked with creating a playbook for the sourcing team,
outpatient clinics and employs more than 59,000 caregivers. In early 2022, the increasing spend on diverse suppliers and building supplier diversity
newly merged health system went through a significant organizational redesign dashboard metrics and reporting capabilities.
effort to create the Corewell supply chain team under new leadership.
The supply chain leadership team continued to lead risk and
resiliency initiatives across the industry as one of the founding members
Implemented a systemwide value analysis program focused on
of Health Industries Research Companies. It developed a demand planning
evidence-based decision making and clinical standardization efforts
tool, a supplier risk analysis tool and an early warning score algorithm to
track backordered items and better prepare the health system.
Grew its supplier diversity program by increasing spend on
diverse suppliers and building supplier diversity dashboard Corewell also implemented a systemwide value analysis program
metrics and reporting capabilities focused on evidence-based decision making and clinical standardization
efforts. The organization has a robust pipeline of initiatives for 2022
Robust pipeline of future initiatives, including achieving and 2023 that includes group purchasing organization (GPO) conversion,
sustainability goals achieving sustainability goals, implementing technologies to support the
integration and building a centralized distribution center.

Since the merger was announced in 2021, Corewell supply chain was
selected to participate in Wave 1 of system integration, where they
served as early adopters of new processes and technologies. Corewell
continues to expand on the integration by implementing a single instance
of ERP and electronic health record (EHR) systems.

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Gartner Healthcare Supply Chain Top 25 for 2022

Advocate Aurora Health


Advocate Aurora Health rose five spots in our ranking to fourth, cracking Advocate Aurora Health is tackling improvements in the pharmacy supply
the top 5 for the first time. The organization improved in three areas of the chain. In 2022, it used a technology-enabled hub-and-spoke model for
ranking: Quality of Patient Care, Peer Opinion and Analyst Opinion. It also central pharmacy distribution to target both service improvements and
garnered full credit for the new ESG component with the Healthcare Anchor an inventory reduction of $500,000.
Network. We have documented its mature CSC capabilities across all product
Concerning ESG, it was one of the original signers of the Impact Purchasing
lines, and we expect that the alignment to maximum value and agility will
continue across the enterprise. Commitment last year. President and CEO Jim Skogsbergh has a message that
represents the organization’s commitment to these efforts: “Advocate Aurora
Health is focused on taking tangible action to spur economic vitality and
Implemented a new service line integration model to add value create positive change. Supporting minority and women-owned businesses
in multiple areas and for increased alignment with clinicians through our local supply chain purchasing efforts is an important step to
address health inequities."
Reduced inventory through a hub-and-spoke model for central With a potential merger with Atrium Health on the horizon, the organization’s
pharmacy distribution revenue and complexity are poised to increase. This large health system will
likely lean heavily on its own supply chain maturity, plus that of Atrium. The
Committed to ESG as an original signer of the Impact Advocate-Aurora merger in 2018 spanned primarily across two contiguous
Purchasing Commitment states, while the new entity will cover six noncontiguous states end-to-end
and have $27 billion in revenue.
This $14 billion health system aligned to the theme of changing economic
realities after the supply chain’s recently added service line integration model
put the department in the position to add value on multiple fronts. The model
listens to clinicians and aligns appropriate supply chain responses, plus it
features single-instance ERP.

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Gartner Healthcare Supply Chain Top 25 for 2022

Ochsner Health System


Ochsner Health System takes No. 5 in this year’s ranking. This health system The New Orleans-based Ochsner also advanced its resiliency initiatives by
has expanded significantly in the past three years and now operates 47 building collaboration tools with key suppliers to monitor critical products
hospitals and 300 clinics. To support this expansion, Ochsner’s supply chain and services. Throughout 2022, it continued using the supply warehouse it
completed a modernization initiative that included new technology, software built during the pandemic to deal with product shortages and various supply
platforms, tools and workflow process improvement. disruptions in PPE and other critical supplies. SafeSource Direct, a joint
venture between Ochsner and Trax Development, completed construction
of two plants that are being used to manufacture PPE. SafeSource Direct
Invested in an analytics dashboard and a procedural tool that
is now producing hundreds of thousands of nitrile gloves every day.
reduced the amount of manual analysis
Ochsner also focused on a supplier diversity initiative by developing and
Built out collaboration tools with key suppliers to ensure stock implementing tools to track diverse supplier spend and ensure diversity
of critical products and services; joint ventured with SafeSource spend reporting is available. The organization also joined End Drug Shortages
Direct to manufacture PPE Alliance, an industry group focused on resolving issues related to
pharmaceutical drug shortages.
Developed tools to track diverse supplier spend and ensure As a large health system in one of the main hurricane regions, Ochsner
follow through developed a risk and resiliency program for inclement weather planning.
This involved creating secondary sourcing strategies and identifying
To deal with supply challenges, Ochsner invested in analytics dashboards suppliers for critical needs like fuel, potable water, generators and medical
that provide direction on cost reduction opportunities based on supply surgical supplies.
cost. The health system made a large investment in a procedural tool that
reduced the amount of manual analysis.

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Gartner Healthcare Supply Chain Top 25 for 2022

AdventHealth
AdventHealth jumped up four spots in our ranking to No. 6 this year. This Over the past three years, this $17-billion, 52-hospital health system has
represents AdventHealth's second year on the list based on strong bond strengthened alignment between supply chain strategy and enterprise
ratings and quality-of-patient-care scores along with rising peer opinion. goals. Using an approach across the core areas of people, products,
AdventHealth scored points in ESG as well. process and technology development, AdventHealth's supply chain has
made great strides and shown leadership in the profession.
Developed and aligned supply chain strategy to the goals of On the operating front, it is leading a systemwide clinical engineering
AdventHealth showing leadership in the profession initiative to centralize and standardize the efforts of 50 independent
hospitals into a single, cohesive approach. Process savings and bulk-buy
Leading a systemwide centralization and standardization effort that leverage, along with improved asset management and product life cycle
will yield dramatic savings management, will yield an eight-figure savings and five times the ROI.

Lastly, illuminating the theme of cost pressures, the supply chain at


Targeting $85 million in savings over the next 18 months AdventHealth is targeting $85 million in savings over the next 18 months
through more direct alignment with the value analysis team and the
CMO’s office.

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07
Gartner Healthcare Supply Chain Top 25 for 2022

UPMC
UPMC rose one spot to seventh this year, strengthening already high peer UPMC has maintained a CSC for medical products and an independent
and analyst opinion scores. UPMC’s sustained top leadership remains solidly warehouse for pharmaceuticals for over a decade now. People — along
aligned to the health system’s goals, even as the organization has grown to with strong clinical sourcing alignment — are key assets in UPMC’s
$24 billion with clinical operations and collaborations in Italy, Ireland, China, supply chain. Its analytics specialists and dedicated supply chain
Kazakhstan and the United States. transformation team deliver traditional and nontraditional value through
to innovative projects.
Uncovered nontraditional value through innovative projects such
The organization’s key focuses include: “Rebranding Supply Chain:
as maintaining a CSC for medical products and pharmaceuticals
SCM 1.0,” optimizing supply chain operations; “One Supply Chain
for over a decade
Mindset,” assigning a single contact for all locations; reenvisioning
the value analysis process; and reducing the number of committees
Reenvisioned the value analysis process, increasing agile
from 33 to eight, a major shift for UPMC.
decision making
UPMC also has big initiatives underway for leveraging RPA in supply
Implemented RPA for supply chain and improvements to asset-life chain, improving resiliency for medical and pharmaceutical products,
management in biomedical engineering centralizing 340B management across the system and improving
asset-life management in biomedical engineering.

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Gartner Healthcare Supply Chain Top 25 for 2022

BJC HealthCare
BJC HealthCare jumps five spots from last year’s position to No. 8 in our 2022 BJC HealthCare showed innovation with its master data management
ranking. This is the eighth time in 13 years that this $6 billion, 15-hospital and use of GS1 Standards as the backbone for operational efficiency
system has appeared in the ranking. The supply chain team at BJC HealthCare in transactions and improved financial performance. It engaged in
(branded as Supply Plus) focused on supplier relationship management in strategic improvement initiatives in cost per case, clinical variation,
the last year with an emphasis on the common goal of building resiliency supplier rationalization, workflow optimization and lean operations.
and aligning incentives with suppliers. Most noteworthy was the implementation of a CSC during the pandemic
that continued to produce results in the last year through improved supply
availability, lower system inventory cost and improved service levels.
Improved financial performance and operational efficiency through
a master data management system Top priorities for this year included initiatives focused on data
management for better insights, cost savings opportunities, demand
Implemented a CSC that continues to produce results yearly through planning and data sharing capabilities.
improved supply chain availability, lower system inventory cost and
BJC HealthCare also improved data standardization through strong
improved service levels
collaboration with clinicians that helped improve efficiency of clinical
operations, decreased disruptions in product availability and improved
Decreased disruption in product availability with data standardization patient care.
and strong collaboration with clinicians

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Gartner Healthcare Supply Chain Top 25 for 2022

Geisinger
Geisinger comes in at No. 9, jumping seven spots in this year’s ranking. The In the last year, Geisinger continued its focus on strategic partnerships
system continues to lead in supply chain innovation and patient-centered and deployed new initiatives with suppliers to achieve its strategic vision
supply chain. of caring for patients and communities with a customer-focused supply
chain organization. Geisinger partnered with Medline to implement a
shared-risk quality program. This program had a supply chain component
Partnered with its main distribution partner to implement a shared
that involved a complete supply chain redesign to drive down costs and
risk quality program and to drive down costs
improve efficiency in logistics services.

Focused on data management through tools that analyze procedure It has focused heavily over the years on data standardization
cost per case to drive efficiency and has been a proponent of GS1 Standards for driving efficiency in
supply chain. Geisinger continued its focus on data management and
Rolled out unique device identifier (UDI) adoption systemwide to insights with the implementation of a tool that leverages data from
eliminate manual data entry and ensure accurate charge capture ERP and EHR systems to analyze procedure cost per case.

Geisinger completed implementation of a long-term initiative focused


on UDI adoption. It started with a pilot within the cardiac catheterization
lab and expanded to all operating rooms and has now become a
foundational capability to ensure 100% elimination of manual data entry
and accurate charge capture of all supplies and medical devices.

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Gartner Healthcare Supply Chain Top 25 for 2022

Baylor Scott & White Health


Baylor Scott & White Health comes in at No. 10. It is a large health system, with The health system built a demand-planning dashboard internally that
more than $12 billion in revenue, 50 hospitals and 750+ clinics. Over the years, projects supply chain demand projections based on census and historical
this health system has invested heavily in supply chain talent, technology and data. The dashboard was used during the pandemic response and is now
processes. It has also implemented several initiatives focused on master data used for monitoring and allocation of supplies to every hospital within
management, spend analytics, point-of-use data capture, risk and resiliency the system.
response, and organizational structure improvements.
According to its Gartner Power of the Profession™ Supply Chain Awards
submission, Baylor Scott & White Health’s supply chain department
Built a demand-planning dashboard that has helped monitor consolidated and transformed the organizational structure with 300
allocation of supply across the system resources into one team. This initiative focused on building a structured
talent management process to focus on skills and resources and providing
Consolidated and transformed a team of 300 resources into one a path for career advancement. They state that “the success of this
structured team with paths for career advancement organization structure transformed the team to create a collaborative,
process-improvement, lean-focused group of committed individuals
armed with skills and experience to drive improvements in our systems,
Implemented a modern procure-to-pay system and standardizations
processes and results."
that have led to cost savings and increased collaboration
This new organization structure’s successes were the implementation
of a modern procure-to-pay system, standardization initiatives that have
led to cost savings and enhanced collaboration with clinical staff. These
initiatives were all led and driven by the supply chain operations leaders
promoted from within the health system.

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Gartner Healthcare Supply Chain Top 25 for 2022

Actionable, objective insight


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on supply chain management:

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supply chains apart from competitors. disruption-tough supply chain. your supply chain operating model. of supply chain crisis evolves.

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