Latest / Speaking of Supply Chain / Diagnosing the Challenges of the Healthcare Supply Chain

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Diagnosing the Challenges of the Healthcare Supply Chain · Speaking of Supply Chain

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You're listening to Speaking of Supply Chain, a meeboch podcast. This is a
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show for logistics professionals looking to learn more about the latest innovations in supply chain.
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Each episode will feature a conversation on topics such as mitigating supply chain disruption
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and reducing risk, current automation trends, sustainability initiatives, and more. Let's
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dive right in. Hello, and welcome to Speaking of Supply Chain, where
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we explore trends, current events, and innovations impacting the supply chain and logistics
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industries. I'm your host, Ellen Wood. Today I am joined by Luca
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Young Koppolists. And you know what I should double check is that how we
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pronounce your name. That's exactly how you pronounced her name. It sounds like
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you got I don't know, maybe some friends who are Greek or something,
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because he nailed it. You know what, I love Greek food. Yeah,
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you've got a lot of Greek venues. I have. I have,
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and I watched My Big Fat Greek wedding way too many times when it was
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new. But anyway, today I am joined by Luka and Koppolis and he's
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going to share some of his insights into the difficulties supply chains of healthcare systems
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are facing right now and some of the ways that they're addressing them. Luca,
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welcome to the show. Thank you for having me. Ellen. I'm
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I'm a big fan of the show and I'm glad to be on this side
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of the microphone for once. So glad to be here. Wonderful, wonderful.
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So we have a very big topic today, but first let's take a
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moment, and I want to ask you what is something that you feel we
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could do in this day and age. We do a lot of virtual meetings.
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We're doing a virtual podcast right now. What's something we can do to
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improve the quality of virtual meetings? Have you thought of anything that could do
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it? Because I hate virtual meetings. Yeah, I think there's a lot
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of things that I hate about virtual meetings, and I think it's the part
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of the sort of meeting that separates or feels distinctly different from a real human
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experience or a real meeting, right And those are the spots to make improvement,
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because what we like about, you know, real meetings versus virtual meetings
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is there's something magic in the reality side of it. And I think two
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big parts would I would like to change in how we meet virtually in the
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future. Would be for one, I mean in a conversation, I don't
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have a mirror looking at myself every time I speak, and I think that
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for a lot of people it puts us into a place of like self consciousness
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or self reflection, when that's not the point of a meeting or a conversation.
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The point of a meeting or conversation is to absorb information from your counterpart
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in conversation, right, not to reflect on yourself and critique. Yeah,
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so I think that would be a cool thing. Right, is not showing
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the speaker to self instead, you know, focusing on the communication feedback from
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your audience or from your meeting team members. I think the other part about
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it is, you know, this idea of a virtual meeting, it's a
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discreete time on a calendar that you join and you're there for a moment,
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and you know it lacks the real part of like an office place or the
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building where meetings normally happen. I think sometimes the best ideas or the best
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conversations happen between meetings when it's not on the schedule, and when you know,
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coincidence and circumstance leads to, you know, a magical little moment where
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you realize something in a conversation, getting a coffee with someone. And if
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there's some way to let people, you know, feel like they can go
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over to their buddies or their work buddies desk and share an idea in the
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middle of the day without having it on the calendar, I think that would
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be a huge step forward for the virtual meeting space. But it's not up
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my industry, not your industry, So who knows. Maybe these are terrible
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ideas, Yeah no, but I agree with you one hundred I love being
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in the office. I'm obviously in our office today and I love being in
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the office to do exactly what you said to just walk over to a colleague's
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desk, Hey I had this idea, or I thought of something, you
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know, and spitball, or go grab a coffee to the water cooler.
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We have a fantastic office manager who make sure that our refridge is stocked.
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Was next, And you know that community of the office is something that is
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missing from the virtual and hybrid workspaces. And I think you're absolutely right,
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you know, looking at yourself on camera, I do it to myself too,
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but looking at yourself when you're in a virtual meeting is a distraction.
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I think my the biggest thing we could do to improve virtual meetings, and
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this is something that I learned very early on in my career when I was
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a restaurant manager, and that was when you have a meeting, have your
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meeting be where your feet are. Be here now. And I think a
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lot of times we're so busy or we're trying to cramp so much into our
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day that when we have a virtual meeting, we're just kind of phoning it
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in for lack of a better descriptor of that of just trying to multitask looking
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on your phone. You're getting dinged with other messages. Like virtual meetings need
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to be as dedicated in person attentions as if you were sitting across the table
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from somebody live. I think that makes all the difference. I couldn't agree
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more. Yeah, And I think we're really hitting the ends of the spectrum
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here right with the short virtual meetings as they stand now, or somewhere in
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the middle, right, Like they don't allow you to have the fully engaged,
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fully present conversation that you're talking about that you do get in a one
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on one conversation when the screens are away and the devices are down and you're
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looking someone in the eyes and communicating with them. And on the other hand,
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they fail to capture the you know, outside the screen experience or the
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full community aspect that can exist, you know, in the hallways, in
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that in between places of an actual workspace. So going in both directions would
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be a great accomplishment for the virtual meeting space. I think the other thing
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that could make meetings better is just blanket Every meeting has to have snacks,
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because you're going to get people who you know will talk more over food,
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or you know, we will go out with friends for dinner or drinks and
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talk for hours, and in meetings you can't get anybody to talk. You
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need some food, You need something to break the ice totally like an icebreaker
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question, exactly like an icebreaker question. All right, So now that we've
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done our icebreaker question and we're good and ready to talk, let's talk a
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little bit about the healthcare supply chain. So I read an article that you
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wrote last year about the COVID crisis and how it highlighted all of the things
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that were wrong in the healthcare supply chain, or maybe not all of the
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things, but it highlighted some of the big problems that existed previous in the
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supply chain and allowed us the opportunity to come back and fix it or change
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the way that we approach some of the things. So, what were some
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of the things that you saw in pre COVID or during that disruption that were
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the biggest problems? Yeah, for one, I mean one of the biggest
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problems that we see is that in healthcare supply chains are chains that are as
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strong or as weak as the weakest link. And that's because they are truly
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linear chains. Right. End users of these supplies typically will work with a
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singular supplier primarily. Right. Even big hospitals ninety percent of their spend is
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with one of these major distributors. Right, the major distributors that dominate the
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space are owning ten to thirty percent of the marketer of the end consumer spend,
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which is insane. We've got companies like McKesson who are doing three hundred
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billion dollars in revenue, right, companies like a Marisource Burgeon doing one hundred
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billion dollars in revenue, And all of this gets funneled into these sort of
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you know again, linear chains, and when McKesson has a shortage, when
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the major distributor has a shortage, who has impacted thousands, you know,
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maybe even millions of customers and healthcare businesses are unable to get the supplies they
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need, and that chain breaks because the one week link sort of fails.
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We fail to have diversity or a diverse portfolio of supply chains that could allow
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us to change from being you know, as as strong or as weak as
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the weakest link, to as strong as the aggregation of our entire sort of
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portfolio suppliers. I think a lot of other industries, you'll see people have
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multiple sources from which they can sort of shop or acquire supplies right that are
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interchangeable, right, and they go out and they bid each year right for
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different service providers to earn business in these supply chains. But it's not how
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it looks in healthcare. There is you know, the Federal Trade Commission in
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the United States is investigating a lot of these companies for antitrust violations and monopolization,
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and I think that makes us specifically prone and susceptible to impacts when there's
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a local shortage with the major distributor. You know, that is felt all
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through the supply chain and everywhere. And if people had more optionality, a
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diverse sort of palette of suppliers with whom they could work, plug in to
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those different sources interchangeably, right without effort, that that would be a huge
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difference maker to preventing the shortages that we not only saw during COVID but continue
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to see to this day. Yeah, diversification is always great in almost every
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setting. So I hear what you're saying about the diversification of suppliers. But
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why do you think the healthcare industry was so hesitant to adopt that practice previously,
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if other supply supply chains were doing it, if other businesses, if
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other industries had a more diverse supplier network and went out to bid more often
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on these things, because there simply weren't the distributors available, or was it
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too much of a headache to have to manage that process? Like what made
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healthcare so different that they weren't willing to adopt these practices before there was a
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problem. Did they feel like the distributors were solving you know, any number
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of problems and making it simpler by being a single source. I think that
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of course, humans are creatures of habit and when there are risks associated with
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change, we prefer to avoid those risks and we become even more so creatures
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of habit. And in the healthcare space, change or I guess the risks
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associated with change are ultimate. They are life and death. They are you
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know, at the greatest scale, you know, the greatest problems that I
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personally care about, right, like for my family and my loved ones.
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So I think people fall into that trap in this space more than almost any
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other industry, this idea of if it ain't broke, you know, don't
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fix it, and we can get away with what's worked historically, and a
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change, even if it's going to save us, you know a lot of
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money or some future you know, from some future problem that we're not dealing
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with today, we don't need to make that change because it's just not worth
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the one percent or the point one percent risk. So when you talk about
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like diverse portfolios of suppliers and having optionality, right, that makes you more
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resilient, like Amazon is sort of the ultimate example of that, right.
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And in the consumer space, when it comes to my doritos, or my
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you know, toilet paper or you know, some office supplies. I'm okay
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with getting a different quality of gel pen or getting you know, something,
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taking the risk of building out a supplier network and working with different suppliers and
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potentially slightly longer lead times, or you know, whatever it may be.
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But when it comes to life and death, that is really the risk that
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that people take on. In the healthcare space, we just see a slower
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evolution. I mean, and it's not just in supply chains, right.
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You see the same thing with clinical trials, right of drugs and drug development.
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We see the timeline to approve a vaccine during normal times, when the
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outcomes are known and the risks are relatively low, those things take a long
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time. They take ten, fifteen, twenty years in some cases. Right,
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But when we talk about you know, COVID, they're rolling out vaccines
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within a year or two. Point is Adversity is often the parent of innovation,
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and it drives change where there otherwise wouldn't be changing. Sometimes something bad
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has to happen for people to realize, you know, that it's time for
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change. So I hear that the stakes are just too high, the stakes
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are too high, or they were too high to risk taking the time or
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making the effort to diversify. So Grapevine, which is your marketplace, takes
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away that risk. How Yeah, And we are not sort of like sometimes
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people call it like the Amazon of healthcare, right, and maybe one day,
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but that is not what we do today. We allow you to optimize,
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right, your spend across your existing trusted suppliers. Right, So it's
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more procurement software than it is is marketplace. But we layer that in some
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marketplace components, and you are right to sort of cause that. But the
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way that we sort of de risk diversification is the suppliers you currently work with.
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You type your credentials, you know, into Grapevine, your log in
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credentials. We reach out to let's just say, your McKesson profile, your
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Henry Shine profile, your Medline profile, your a marisource burgeon profile. We
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bring in all of your order history with your active pricing from each of those
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vendors, the ones that you know and you trust, right, the ones
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you already work with. Due diligence is already done. The due diligence is
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already done, right, So there is no risk at this point. There's
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literally no risk, all those options are now on one screen. The interesting
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thing is there's a huge overlap in the catalog offerings from your existing suppliers.
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So the first way that we're going to help you sort of save money or
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solve back orderes and shortages is by putting everything on a one screen. And
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when that McKesson product goes out of stock, when McKesson has a supply chain
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disruption and they no longer have their Becking, Dickinson or b bronze sort of
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needles in stock, right, we're able to as you sort of search for
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the product, as you try to click add to card on this sort of
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blocked back ordered mckessson item, will redirect you to one of your other trusted
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sources who has the same exact item at you know, but available, or
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if you add to card on the McKesson item because you've always ordered these items
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from McKesson just out of habit, right, we'll show you opportunities from your
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existing vendor network to switch and save the same item. But here's an opportunity
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to switch the same skew just from a different source and you'll save money.
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And by the way, it's one of the sources that you know and trust.
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So at this point, again we've taken no risk. We're helping you
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solve backworders by optimizing your entire sort of supplier portfolio that you already know and
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work with if you happen to work with them, and lower costs by you
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know, directing to the smartest source. That's sort of you know, the
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first month of using Grapevine for most healthcare businesses. But where we start to
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introduce some risk or some things that you know, increase diversification rather than just
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sort of optimization, is by introducing you to new suppliers or recommending substitutes beyond
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the exact matches that I've already talked about. Right, so we'll say,
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hey, you know you've been buying this from these suppliers. There's opportunities to
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switch and by the same item from again one of your trusted suppliers. But
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how about working directly with the manufacturer? Now? Do you want to work
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directly with the manufacturer because they use Grapevine two and they can connect with you,
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they're compatible to work with you. You don't need to play through a
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middleman and a markup. You don't need to deal with the markup or the
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backwards. Why don't you switch directly to the spire so we actually allow healthcare
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businesses or hospitals to unlock, you know, new suppliers and build out a
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more diverse portfolio through the grapevine. Okay, so it's not necessary saoroughly changing
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suppliers or even going out to market for new suppliers. It's just having all
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of the information in one place, so that procurement person, that manager of
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that healthcare system is able to make better choices based on availability and you know,
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potentially if they have budget issues, you know, based on cost or
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based on speed of service. You know, how many times do those aspects
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come into it? Rather than just this is easier to go shopping and order
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our supplies. I would say that if someone obviously, if someone works with
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a single supplier, there's not much Grapevine can do to lower the cost or
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solve your problems if you work with multiple suppliers. Right, just working with
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two suppliers, you're typically spending like way too much with one supplier and not
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making the great decision. Grapevine allows you to make sort of the smartest decision
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at the point of purchase. Every time you purchase, for every single product,
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and by just doing that with two suppliers, we see savings of about
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thirty percent on your monthly or annual spend. Again, no introduction of new
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suppliers. Just by optimizing across like two suppliers savings of about thirty percent and
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a reduction in back quarters by about fifty percent. Right, so there's a
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huge impact just by sort of optimizing. Take that a step further, right,
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you fold in more suppliers, the savings go up. We introduce you
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direct to manufacturer options, the savings go up. In our sort of greatest
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use cases, where someone goes from working with one supplier to like let's say
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eight or nine, we see savings of up to eighty five percent on their
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overall spend on supplies. And that's with a combination of sort of switching to
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smarter sources for the exact same products, but also folding in sort of similar
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or clinical substitutes for new products. So one of the things that you mentioned
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in the article was that you know, some of these these best practices and
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optimized workflows are what are going to, for lack of a better word,
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heal the supply chain for these these industries. Does this diversification fall under one
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of those best practices that using only a single source is not going to be
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the best use of their time and effort and budget because they're missing out on
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too many opportunities. Yeah, I think that is definitely, definitely a huge
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part of it, and both for the purpose of savings but also the purpose
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of solving backwarters. If you have five, six, seven different sources to
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shop similar or even the same exact products, right the odds that like and
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think about it as as in a consumer experience, like the odds. If
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you go to CBS and they're out of stocking the toilet paper you like,
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and then you go to Dwayne Read and then you go to Walgreens and you
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go to like six other places, someone's going to have what you need.
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Right, So having different sources for the same supplies isn't just a way to
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optimize costs and lower your spend, but it's also a way to prevent backwarters.
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To make sure that Nissians have the supplies they need, the implants they
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need to perform surgeries. You're not just you know, saving money for these
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businesses, You're actually making sure that procedures can happen on time, making sure
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the supply cause that is stocked when physicians and patients need you know, that
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injectable, that drug, that whatever it may be. And that is a
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huge part of the solution, you know that that we solve and it's a
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big part of mending the supply chain. Through diversification, we can lower the
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cost of the United States to spend on these healthcare supplies by I believe more
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than fifty percent, And while doing that, you can lower the frequency of
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backworters shortages that actually occur in the healthcare space I think by like sixty seventy
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percent. So, yeah, mending the supply chain has to do with costs,
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it has to do with backwaters, and those are two of the problems
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that we sort of attack with with grape time. Well, and something else
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that you had had mentioned to me was that the inefficiencies cause medical goods to
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move forty times slower than other industries. Is that true? Yeah, And
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we've got all sorts of like mathematical models that help explain it. But what's
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causing that. I'll give you like an anecdote, because I think anecdotes are
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easy to understand then explain to you at least in the podcast format. If
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this was, you know, some charts we're circulating, it might be different.
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But our first business and our foray into this space was actually, and
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yeah, I guess, without going too into our origin story, college dorm
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room. Friends, we are stuck in our dorm room as COVID sort of
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breaks out. My mom's a nurse, my dad's a scientific researcher. We're
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hearing about these supply chain shortages and supply chain for really the first time in
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our lives from our dorm room, and we want to help. So we
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start aggregating information data from import records and FDA licensed databases, basically looking at
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the entire portfolio of options to say, okay, who has these supplies coming
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into the United States that we can connect to healthcare workers in need? Right,
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and we connect some dots, We help out my mom my, you
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know, loved ones that that that that we care about, that we wanted
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to keep protected through these scary times, and that was that that was our
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start. Now to answer your question. Shortly thereafter, we end up getting
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a call from one of these major medical distributors, right, and they want
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to purchase the supplies that we've been you know, distributing to their to their
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customers. Right. They didn't they clearly didn't understand what was going on.
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How much did you buy? Yeah, they ended up buying several million masks.
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Within our first eighteen months, we did twenty million dollars of sales to
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major distributors, right, and we got to see exactly how these supply chains
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worked on the supply sect, right. So we were feeding the beast,
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if you will, feeding these major distributors that serve you know, huge portions
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of the of the medical you know, the medical market. And what we're
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seeing is we're shipping truckloads of these supplies, like sing products to centralize they
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call them like centralized dcs or distribution centers, right, which is like they
22:06
got like three or four of them throughout the country. From there, they
22:08
take the supplies, they break down the supplies, they shotgun it out to
22:14
you know, all their different locations. Now their northeast regional location, not
22:18
the central DC, but the regional DC ends up having a local shortage.
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So what do they do. They shotgun more supplies from their centralized DC or
22:26
from one of the other regional disease and they move it there. Right,
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So we get this crazy flow of materials where when we say forty times faster,
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like what am I comparing that flow to, which may sound standard for
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a lot of industries and commodity spaces, like the alternative and the most efficient
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use case is sending it not first to our warehouse and then to the centralized
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these not and then you know, through all these different shipments, but sending
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it directly from the source in the United States that has it the place where
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it's either imported to and stocked right directly to the end user if that is
23:00
possible. And for a lot of these wholesalers or importers or manufacturers, they
23:03
don't have the capabilities of breaking it down to consumer scale, you know,
23:08
like a single box or a single case, and sending it directly to Then
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they don't have the logistics manpower, they don't have the you know, warehousing
23:15
staff, they don't have it's not worth it. They don't have the profit
23:18
margin, right because that's the whole point of a distribution center is to to
23:22
take something that's in a large format, break it down into smaller formats and
23:27
supply the orders. So I guess kind of the question there is doesn't that
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increase the cost overall, because all of these logistic you know, activities have
23:38
to take place before you can ship it directly to the to the user who
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needs it. And that's a great point. It should increase the cost.
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And that's sort of the second part of when we've been talking about Grapevine in
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the context of like the customer or the healthcare procurement person for most of our
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conversation today. But we also have built a full suite of technology that we
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hand directly to that first importer or the first sort of stock owner of these
24:03
products in the United States. So to enable a manufacturer to work directly with
24:07
an end user right and make a profit without incurring all these additional costs.
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We have our own sort of magic sauce that we do that allows them to
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tap into end consumers for really the first time. And most of our sort
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of manufacturer importer partners in the Grapevine network use exactly that they didn't previously have
24:27
the ability to sell to end consumers because it was to cost intensive. But
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now with Grapevine, they're able to do it effortlessly, without any thought,
24:34
without any labor, without any extra costs. It can basically happen Okay,
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So doesn't that just in turn make you the middleman distributor. Yeah, that's
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that's a fair point, and it's a good question in a way. Yes,
24:48
but we don't incur the costs that the middleman. So let's like actually
24:52
talk about So, for one, our markup is three percent across the board,
24:56
right, which is significantly. We take the whoever's selling it and it
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gets marked up three percent. That's it. There's not a distributor in the
25:04
United States that marks up something only three percent from there. Why because shipping
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it to your es centralized DC is going to cost you what five percent depends
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on the product line, but maybe maybe five to twenty percent, depending on
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what the product is and how heavy it is and how much the product comes.
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And then the actual warehousing costs that you incur of owning the wares that's
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another five percent. And then shipping it directly to the end user. We
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may call it free shipping as far as the customer is concerned, but we're
25:30
still paying for shipping. So if our take rate as the middleman or the
25:33
distributors, you know, three percent, let's say we're still marking it up
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twenty five, thirty, forty percent to cover the costs that we've incurred for
25:41
shipping and warehousing along the way. And the more that we can enable I
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guess end users to easily, effortlessly and without any cost work with these sort
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of manufacturers and vice versa, the better off we are. And that isn't
25:56
to say, or that isn't to say that there is no place for There
26:00
is a place for distributors. That's what I'm trying to say, and I
26:03
see it. I think a little bit differently than at least the way the
26:07
distributors of the healthcare industry, you know, operate, But they offer a
26:11
whole suite of services that are very important to end users, whether that's financing
26:17
right, allowing people to take on net terms so manufacturers can keep production.
26:21
The end users pay later, you know, the manufacturers need to be paid
26:25
now. So bridging that gap, the customer support and customer service, like,
26:29
the relationships and handholding like, those things still exist, and they still
26:33
exist in the grapevine space. We've got a whole different school of users that
26:36
are resellers. But the resellers do not need to have a warehouse. The
26:40
resellers don't need to bring it in to a physical warehouse. They don't need
26:42
to incur costs of warehousing, picking, packing, shipping right like grapevind does
26:48
that, and it allows these resellers to work directly with manufacturers and focus on
26:52
their core competency as a distributor as a reseller, which is often PO financing
26:57
and customer management, customer relation to management, customer support. And yeah,
27:02
I think they have a very important place. I think it's just a different
27:04
place than is shaped out in the healthcare space today. So we're solving a
27:08
lot of inefficiency and back orders. But you had mentioned that larger hospital systems
27:18
or healthcare systems experience a significant number of back orders on a regular basis.
27:26
How much can we actually change that and make sure that you know, these
27:30
these materials, that these products are available to those healthcare systems, because you
27:36
know, like like we said at the beginning, the stakes are so high.
27:38
Yeah, yeah, I mean we can impact it hugely, and not
27:44
just through Okay, you've gotten a back order, here's an alternative source that
27:48
has it in stock ready to ship. It can get to you by tomorrow.
27:49
Right Like that part I think is a sort of clear cut solution to
27:53
the problem. But you still are waiting an extra day or two for the
27:56
product it just now comes instead of in a month, in like whatever,
28:00
three additional days. So not great, imperfect, but does cut back on
28:06
the amount of time that you're stuck empty handed. We do one step better,
28:08
and we're in the pre We haven't yet launched this, but I'm pretty
28:11
excited about it, and this is the first time I'm talking about it actually
28:15
publicly. We study promises made by your supplier partners. Right, if someone
28:19
says, we're reading in all this information when you link a supplier, this
28:23
is in stock, this is low stock, this is whatever on back order,
28:27
this is and there's tons of different sort of stock statuses we call them
28:30
from each of the different each of the different suppliers. But we read in
28:33
all that information, we tell you, and we are analyzing actively. We
28:37
tell you, you know, how often your supplier holds true to the information
28:42
they presented to you when they actually purchase and for example, this supplier maybe
28:47
ten percent of the time. And we're using machine learning and predictive analytics to
28:51
do this, right, We study all the historical stock statuses and then the
28:55
amount of time that it actually takes to deliver after they promise you at the
28:57
point of purchase that it's going to be three days. Does it actually come
29:00
in three days? It does it take ten days? Right? And we
29:03
look at the difference between what their promise was at the point of purchase and
29:06
what the actual delivery times were where there were they said it wasn't going to
29:10
be backward and it ends up being backwarder. And we use that information to
29:14
predict and warn you of your dangerous or untrustworthy suppliers. So these this supplier,
29:18
You've got ten products you know, in this order that are going out
29:22
to supplier one, but heads up, one in six products is usually on
29:26
backworter from the supplier, even though they say it's not, so we're you
29:30
know, and it usually and on average it takes fifty percent longer. So
29:33
we're using machine learning and predictive analytics to try to warn you of problems before
29:37
you place your order and really at the point of purchase, so you can
29:41
make smarter, better, smarter and better decisions about which suppliers you work with,
29:45
getting any insights into you know, the accuracy, honesty, and productivity
29:51
of the supplier network that you build on grape fund, so you know,
29:55
we're talking about obviously these these suppliers, these producers, these disturbut and I
30:00
know one of the other big challenges here is just the you know, to
30:06
your point when when it comes to the amount of time to deliver that product.
30:10
You know, oftentimes they are coming from Asia. Is near shoring or
30:15
on shoring of some of the production of these things. Is that starting to
30:21
become larger in the healthcare supply industry. I know, it's a big topic
30:25
across multiple industries. The tech industry is really big right now looking at on
30:30
shoring. There's a lot of production looking to you know, come back to
30:34
the US in North America. Is that also happening in the healthcare space.
30:40
Absolutely, it's It's definitely happening in the healthcare space both in like the number
30:44
of FDA licenses issued to manufacturers each year increasing domestically decreasing in certain countries,
30:51
right as far as like Grapevine's roll in it. We exclusively work with supply
30:56
partners, whether those are the resellers we talked about, or the manufacturers or
31:00
importers, people that have stock domestically in the United States. So this is
31:03
an onshore project We're focused on exclusively connecting you to suppliers that can deliver something
31:11
you know, within a two week, not internationally you know, I by
31:14
sea or air freight, but like have the product in a US warehouse,
31:18
and that's that's our core competency is marrying the end user to the best possible
31:23
suppliers that have real stock you know, in the United States and inserting you
31:29
know, middlemen and resellers distributors in the places that are necessary to marry the
31:33
two ends of that supply chain. Our supply chain starts in the US and
31:37
it ends in the US. Fantastic, So any other success stories. So
31:45
I've read a lot about your company. I've read some interesting things on LinkedIn
31:51
that you've shared about innovation and creativity. What is a story or a case
32:00
study or an end user a client use case that you can share about Grapevine
32:07
that would be your commercial like the best case scenario or like a fantastic story
32:15
about your clients and your product. Where I'm torn and answering this question is
32:20
there are the non corporate you know, family or physician groups that own like
32:24
a number of you know, dermatology practices or oncology practices, and there are
32:30
real people you know, those are the ones that really move my heart.
32:32
But then there's the ones that with the more impressive numbers, the institutes that
32:36
are public companies with hundreds of locations spending millions of dollars, and we cut
32:40
that spend, you know, by fifty percent. So I'll let you pick
32:43
onen. Do you want to hear more about the family touch and warm the
32:45
heart or the you know, the big numbers, flashy numbers, or we
32:50
can do both. Yeah, let's do both, okay for sure. So
32:55
one example, then I'll start with the number one example is the Oncology Institute
33:02
of Hope and Wellness. They're a public company. There's doctic there is TOI
33:07
and they've got something like eighty oncology practices or clinics across the United States that
33:14
serve, you know, cancer patients and give cancer treatment. They also do
33:20
you know, clinical research to try to come up with and bolster the arsenal
33:24
of oncology drugs and therapeutics that are available to their patients and so on.
33:29
Before working you know, with Grapevine, and they were and this is all
33:34
public information because again they're a public company, but before working with Grapevine,
33:37
their spend was in the millions they were working with and had registered with a
33:42
number of suppliers, but about ninety eight percent of their spend was with one
33:45
supplier because of the convenience of ordering on a single screen and not having to
33:50
deal with multiple reps, multiple contacts and whatever. We bring them into Grapevine.
33:52
Within month one, you know, they're saving about twenty percent on their
33:57
supplies and redirecting you know, that almost full pie with one supplier to a
34:01
healthy proportional number of suppliers that are actually earning the business, you know,
34:06
every single day. But from there we help register them with both new GPOs
34:10
and new suppliers. Now they're working with I think like twelve suppliers. They've
34:15
cut their spend by almost fifty percent, and if it all goes well in
34:20
June, they'll be above fifty percent. They don't spend more than you know,
34:24
thirty percent of their their million dollars spend with any one supplier anymore.
34:29
Right, every month, they're healthily diversified pie of different opportunities, and when
34:34
they get a backwater, they don't notice the product goes off there, like
34:38
the product goes on backwater from supplier one, who's got the best price.
34:42
So the whatever it is they're focused on, sub out the product, the
34:45
new product appears for them. They're redirected, and it's simple. They don't
34:49
even see products that are on backwater because the backworters solve themselves before they even
34:52
place the order. That is, you know, by the numbers where we've
34:55
saved them to date more than six hundred and fifty thousand dollars. They started
35:00
basically in January of this year and they've saved six hundred and fifty thousand dollars
35:05
through through the through the year to date, so that is a huge use
35:07
case. Again, it's close to it's like forty nine percent savings and a
35:13
lot more resilience, and that's that's, by the numbers, one of the
35:16
greatest accomplishments we have to date. They've recycled that money right into serving on
35:22
college patients, saving lives, and that's been something that that I appreciate and
35:27
am happy to see. As far as like the heartfelt stories, yeah,
35:30
I'll talk about sort of doctor Joshua Whitees and Dermatology Associates of Rochester. This
35:37
is really, you know, one of our earliest big wins. He's a
35:40
dermatologist in Rochester, New York. I think in the case that wasn't clear.
35:45
And he has like four or five offices right in in Rochester, from
35:52
like a medspa to uh, you know, most surgical center to a we
35:58
whatever, standard dermatology practice and maybe even like a clinical research lab. And
36:01
it's it's for small locations, maybe you know, twenty physicians, sixty employees,
36:07
and yeah, they're doing great service in a community you know that needs
36:10
it. They're one of the top providers in both bring cutting edge tech and
36:15
sort of solutions in the healthcare space to dermatology patients. And again we met
36:21
him early on in person. We're able to make the visit up to up
36:23
to Rochester. We saw their spend you know, with a single supplier.
36:28
We help them unlock four new suppliers. And it's a similar story, right,
36:34
But the difference is like the impact, right, this is these smaller
36:38
physician owned medical practices are struggling to say afloat as private equity has been gobbling
36:45
up, you know, all these private practices. You see less private practices
36:49
probably wherever you are listening or tuning in from there's less private practices and the
36:52
big hospital from the big city nearby probably bought the private practice that you used
36:57
to go to. If it's not the big hospital, then it's private equity
37:00
buying it out, and it's getting a new brand that's more familiar that you'll
37:02
see all through the neighboring towns and neighboring cities. Right the little guys have
37:07
been struggling to compete and stay afloat in a time where this conglomeration effect is
37:14
sort of taking place. And we'll see how the conglomeration, you know,
37:17
or the consolidation plays out in the long term. And it's it's really not
37:22
my place to say, you know, if it's good or bad for society.
37:24
I do know that generally costs go up for patients as these things get
37:28
consolidated. Generally, the quality of care goes down. The owner who had
37:32
a stake in performing for his patients, you know, that fades away,
37:37
he sells out, he starts going on vacation, and he loses touch.
37:39
So like, these are anecdotes I hear from our doctors. But you know,
37:44
saving and again it's it's saving something like forty fifty percent, but saving
37:49
forty fifty percent for doctor Joshua Whites and Durham, Rochester. Is the difference
37:52
between right like, struggling to go to stay in business and having a killer
37:58
year and being able to get an extra pair of hands, rate a medical
38:00
assistant, or see more patients, or keep the office open on this day.
38:05
Right Like, the impact is something that we can see, we can
38:07
feel. We both see it in the patients and how they appreciate it.
38:12
The owner is the doctor who is the one that opens the supply cabinet and
38:15
feels and sees the shortage and feels like screwed. Right Like, It's not
38:21
corporate guys and ties saying like, Wow, good job, We've saved a
38:24
lot of money. It's real people. It's real patients. And the ones
38:30
who feel, you know, feel what grape Vine's doing are the same people
38:32
that remind me of my mom and dad. Right so those are the ones
38:37
that move me and really keep me motivating and go fantastic. Well, I
38:42
think that brings us to the end of this episode. Thank you Luca so
38:46
much for sharing about your company and your platform and the struggles that the healthcare
38:53
industry is facing right now trying to deal with their own supply chains. Any
39:00
of our listeners out there have a topic or suggestion for what we could talk
39:05
about next time on the show, we'd love to hear from you. If
39:08
you'd like to be a guest on the show, like Luca, we'd love
39:12
to hear from you as well. You can email me anytime at podcast at
39:15
meboch dot com. As always, thanks for listening to Speaking of Supply Chain.
39:20
If you've enjoyed the show, please rate and review us on whatever podcast
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and be sure to tune in next time. Thanks Anan. Meeboch Consulting is
39:38
one of the largest and most globally recognized supply chain consulting, engineering and advisory
39:45
firms. For nearly fifty years, we've helped clients achieve supply chain excellence and
39:49
sustainable competitive advantage across the entire spectrum of the supply chain by delivering improvements and
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