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What Suppliers Wish Hospitals Knew About Value, Quality, And Risk · Taking The Supply Chain Pulse

• 0:04
  SPEAKER_01: Hello and welcome to another episode of Taking the Supply Chain Pulse.
• 0:08
  SPEAKER_01: I'm Megan with Staynonch Company, and I'm here to introduce Stuart Wooster, who got his start with healthcare supply chain and is now employed as a supplier.
• 0:16
  SPEAKER_01: His experiences from both sides of the track is what landed him a spot on this week's episode.
• 0:20
  SPEAKER_01: Take it away, Fred.
• 0:23
  SPEAKER_00: Today we're going to talk with an old friend and colleague of mine, Stuart Wooster, who has gone to the dark side after several years in uh healthcare supply chain, and now he's working on a supplier side of the spectrum.
• 0:37
  SPEAKER_00: And I wanted to bring Stuart in today to sort of uh talk about what he's seen and what he's learned uh from a different perspective and also how um suppliers view providers and um you know what can we learn so that we can work to together better in the future.
• 0:56
  SPEAKER_00: Stuart, welcome.
• 0:57
  SPEAKER_00: Hey, thank you, Fred.
• 0:58
  SPEAKER_00: Appreciate it very much.
• 1:00
  SPEAKER_00: So you're in are you you're in Lewiston, Maine today, right?
• 1:04
  SPEAKER_00: Well, actually Brunswick, Maine, but yes, it's a lovely, lovely area.
• 1:08
  SPEAKER_00: Yeah, I'm sure it is.
• 1:09
  SPEAKER_00: Beautiful up there this time of year.
• 1:11
  SPEAKER_00: Do you have do you have you guys get black flies, don't you?
• 1:15
  SPEAKER_02: Oh, like yes, yes, we do.
• 1:17
  SPEAKER_02: Um uh if you're not used to that from the Midwest, like uh like I am, it's uh it's quite the adventure, uh unless you go to Canada for fishing, for instance.
• 1:24
  SPEAKER_02: But we have black flies that are a real thing.
• 1:27
  SPEAKER_00: We have midges, M-I-D-G-E-S midges, not midgets, midges.
• 1:32
  SPEAKER_00: And uh those things are little bugs, and they're out right now.
• 1:35
  SPEAKER_00: And god, you open your mouth and about a hundred fly in, you know, it's it's it's it's terrible.
• 1:40
  SPEAKER_00: We have them twice a year.
• 1:41
  SPEAKER_00: Uh in fact, one time years ago during the uh major league playoffs, they disrupted uh the Yankees pitcher Jabba Chamberlain because uh he couldn't pitch because of the midges.
• 1:53
  SPEAKER_00: So that's what we that's what we're dealing with now.
• 1:55
  SPEAKER_00: Other than that, everything's great.
• 1:56
  SPEAKER_00: So, Stuart, uh tell us a little bit.
• 1:59
  SPEAKER_00: I've I've known you now for over 20 years.
• 2:01
  SPEAKER_00: Uh so tell us a little bit about yourself, your background, where you've worked, some of the positions you've had, and where you are now and what you're doing.
• 2:09
  SPEAKER_02: Absolutely.
• 2:10
  SPEAKER_02: Uh again, like I mentioned mentioned before, started in the Midwest, actually went to work for a uh a biotech company, as I like to say, growing bacteria and viruses on purpose for vaccines.
• 2:23
  SPEAKER_02: Uh, so it was a really a good learning experience.
• 2:25
  SPEAKER_02: Uh, it was a division of Wyath uh for Dutch Labs, great people, great products.
• 2:30
  SPEAKER_02: Uh, learned a ton in the process and uh um had the opportunity to finish my MBA while there and uh the pivot into procurement.
• 2:39
  SPEAKER_02: It was one of those, I love the story.
• 2:41
  SPEAKER_02: It was one of those moments where at four o'clock on a Friday, the head of HR calls you up and, huh, whatever I broke, I'm sorry, I'll fix it.
• 2:50
  SPEAKER_02: But he was responding to a an old application I made for a procurement or purchasing agent role.
• 2:57
  SPEAKER_02: And I made my entree uh back then and and haven't looked back.
• 3:01
  SPEAKER_02: So it's a it was a neat learning experience.
• 3:04
  SPEAKER_00: Well, when I met you, you were at Iowa Health in uh Fort Dodge, Iowa.
• 3:08
  SPEAKER_00: Tell us about that.
• 3:10
  SPEAKER_02: Great place to be.
• 3:11
  SPEAKER_02: Um uh love it.
• 3:12
  SPEAKER_02: It was a great organization.
• 3:13
  SPEAKER_02: We uh we had a lot of fun, especially in supply chain.
• 3:16
  SPEAKER_02: We really learned a lot.
• 3:17
  SPEAKER_02: Uh moving from uh um uh what I would consider a cooperative health system to truly more of an integrated delivery network model, especially on the supply chain side.
• 3:28
  SPEAKER_02: We we really had a, I think, a good esprit de corps built there, collaborating uh between the senior affiliate hospitals.
• 3:34
  SPEAKER_02: So at the my role there as director of materials was to oversee purchasing and internal distribution, uh, the mailroom, and then eventually laundry distribution.
• 3:44
  SPEAKER_02: So it was a uh also a real eye-opener moving from manufacturing procurement uh of chemicals and and um um services, but primarily raw materials, to uh to to the finished good or the product side, which most of your audience completely understands.
• 4:02
  SPEAKER_02: You know, you're buying finished goods that coming in from a distributor or sometimes directly from the manufacturer, especially for the high-end materials.
• 4:10
  SPEAKER_02: But uh it's it's it was a always a cost conscious environment.
• 4:16
  SPEAKER_02: Value is really what we're driving.
• 4:17
  SPEAKER_02: And I create the value equation that I have used all my career, where value is the function of quality, service, and cost.
• 4:26
  SPEAKER_02: Quality, service, and cost, uh equal value, the whatever mix it is for that particular good or or service or commodity.
• 4:33
  SPEAKER_02: But we really uh during our times at Iowa Health, I think made made some good progress, making sure that uh that one patients were always cared for.
• 4:42
  SPEAKER_00: And two uh the let me ask you a question, and I'm I'm gonna get off this real quickly because you and I could talk about this for a whole day.
• 4:51
  SPEAKER_00: Um, did being a member of Iowa Health benefit your hospital to uh to have uh to have been uh the the question that the question that one of my colleagues here asked, and I just wrote an article about, is bigger better?
• 5:08
  SPEAKER_00: And my answer was no, better is better.
• 5:10
  SPEAKER_00: Best practices are better, bigger is not necessarily better.
• 5:14
  SPEAKER_00: And the reason quite honestly, since it's been so long ago and none of the people are still around, uh, I asked you this question in a loaded uh it's a loaded question because, in my opinion, having also been in that same uh IDN at that time, uh bigger was not better.
• 5:32
  SPEAKER_00: Uh you were doing a great job by yourself, but did Ford Dodge Hospital uh positively benefit benefit financially from its association with Iowa Health System?
• 5:44
  SPEAKER_02: I would argue that ultimately, yes, in the strategic perspective that was prevailing at the time.
• 5:52
  SPEAKER_02: Um did it truly put forward best clinical practices throughout the system?
• 5:57
  SPEAKER_02: I'm talking about Iowa Health.
• 5:58
  SPEAKER_02: No, because you should focus on what area hospitals are best in the purest form of that.
• 6:03
  SPEAKER_02: In reality, community hospitals, even the larger ones, need to be focused on community needs.
• 6:09
  SPEAKER_02: And so did we provide a good job for our community?
• 6:12
  SPEAKER_02: I guess you can go back to you know hospitalcompare.gov to answer that question.
• 6:16
  SPEAKER_02: But ultimately, if you would take your children, your family, your friends there, then the answer is yes.
• 6:24
  SPEAKER_02: And I consistently did.
• 6:26
  SPEAKER_02: Um, our my my daughter was born there, our daughter was born there.
• 6:30
  SPEAKER_02: Um later we moved back after her son was born.
• 6:32
  SPEAKER_02: So we had you know both kids went there.
• 6:34
  SPEAKER_02: We stayed by choice uh to for our health care there.
• 6:38
  SPEAKER_02: So I would say yes.
• 6:39
  SPEAKER_02: Um the the organization benefited.
• 6:42
  SPEAKER_02: Now, did it was it optimized?
• 6:44
  SPEAKER_02: No, no, it wasn't optimized.
• 6:46
  SPEAKER_02: Uh, did they you know maximum profits?
• 6:49
  SPEAKER_02: And I hate to say profits because it's healthcare, right?
• 6:52
  SPEAKER_02: Because focusing on reducing people's pain and suffering.
• 6:55
  SPEAKER_02: But ultimately, the CEO there taught me this phrase I picked up from him, if there's no margin, there's no mission.
• 7:02
  SPEAKER_00: No margin, no mission.
• 7:03
  SPEAKER_00: Yep, that's one of the old one of the oldest phrases around.
• 7:05
  SPEAKER_00: But what you pointed out, I think, is really interesting because what I heard you say is that because of the resources of Iowa Health coming from Urbendale and Des Moines, um, you were able to ensure the continued success and meaningfulness of a community hospital, as perceived by the members of the community in Fort Dodge.
• 7:28
  SPEAKER_00: Is that fair enough?
• 7:29
  SPEAKER_00: That is.
• 7:30
  SPEAKER_00: That is.
• 7:30
  SPEAKER_00: And that's important because there are a lot of a lot of uh uh community hospitals are just completely gone now, and uh many others have been absorbed and and turned into something other than a community hospital.
• 7:43
  SPEAKER_00: And and in each of those cases, at one time, those hospitals were the lifeblood of the communities that they served.
• 7:51
  SPEAKER_02: Exactly.
• 7:52
  SPEAKER_02: That's that's very true.
• 7:53
  SPEAKER_02: Large frequently the health systems are the largest employers, largest private employers in a state or region.
• 7:59
  SPEAKER_02: So it it's important to look at them as an economic engine, not just a health service provider.
• 8:05
  SPEAKER_02: Yep.
• 8:06
  SPEAKER_00: Yeah, that they and them and the schools probably are the two biggest employers in smaller communities generally.
• 8:12
  SPEAKER_00: So after Iowa Health System, you moved up to the big city, went to Milwaukee and worked at Aurora, and then after Aurora, you got your you got a big bump and moved to Lewiston, Maine, where Muhammad Ali knocked out Sonny Liston back in 1966, I think.
• 8:29
  SPEAKER_00: Like how's it and and uh and you started running supply chains.
• 8:36
  SPEAKER_00: Uh and uh your um your experience and uh and being a full full boar supply chain leader, uh, how was that for you?
• 8:46
  SPEAKER_02: It has been a wonderful ride.
• 8:50
  SPEAKER_02: Um the the excitement is has never left.
• 8:54
  SPEAKER_02: The the challenges have only shifted.
• 8:56
  SPEAKER_02: Um I would tell you, and there was between um uh uh Milwaukee and and Maine, there were some interim positions that uh was very eye-opening uh on the East Coast primarily because what I really learned is in healthcare, same battle, difference of code.
• 9:13
  SPEAKER_02: And it's it's it's really, really true.
• 9:15
  SPEAKER_02: The people who are involved in in healthcare, especially supply chain, their hearts are you could pick up conversation, and I know Fred, well that's not easy.
• 9:22
  SPEAKER_02: You Fred talks to everybody, but you could pick up a conversation with anybody who's been there for any length of time, like you've known them for years.
• 9:29
  SPEAKER_02: And that's just the way it is in people our line of work.
• 9:33
  SPEAKER_02: Um move making the move back to manufacturing has been interesting in different ways.
• 9:40
  SPEAKER_02: It gave me appreciation for some of the quality elements of materials that I always found odd in hospital supply chain management.
• 9:48
  SPEAKER_02: Why aren't we seriously considered concerned about the the the lot traceability of products coming in the door?
• 9:56
  SPEAKER_02: Now, you could say, yeah, we got the G10 and all the tracking ability now that the software that was that was developed and be able to trace it.
• 10:04
  SPEAKER_02: But the from an from a proactive standpoint in hospitalcare, we don't really track that.
• 10:11
  SPEAKER_02: We rely on the manufacturers and the FDA does too, for good reason.
• 10:14
  SPEAKER_02: Because in the manufacturing site and the company I work for currently, quality is absolutely number one.
• 10:20
  SPEAKER_02: Probably if it's if it has a moment of hesitation, it's behind safety of our employees.
• 10:26
  SPEAKER_02: Safety is top notch, quality is also top-notch, and we take concerns and variances very seriously to the point that some of our suppliers don't send us Christmas cards anymore.
• 10:38
  SPEAKER_02: But they're in reality, you know, we it's it's up to us.
• 10:41
  SPEAKER_02: We're the first line of defense.
• 10:42
  SPEAKER_02: Well, manufacturers are, I suppose, but we're the first line of defense in bringing all the products together in a quality way.
• 10:48
  SPEAKER_02: You can't build quality in after the fact, it's got to be there from the beginning.
• 10:52
  SPEAKER_02: And I'm very proud, that's a non-negotiable for me.
• 10:55
  SPEAKER_02: I'm very proud to work for this organization because we take it very, very seriously.
• 10:58
  SPEAKER_00: Well, that's interesting.
• 10:59
  SPEAKER_00: You know, I you said something that I was thinking about this morning.
• 11:02
  SPEAKER_00: You know, when you get old, you just walk around, thoughts jump in your head.
• 11:06
  SPEAKER_00: And and one of the things that I thought about was I know that I started out long before you did in healthcare in a much simpler time, a much simpler time.
• 11:16
  SPEAKER_00: But we we reposed all our trust in the suppliers.
• 11:21
  SPEAKER_00: We we uh we thought that uh suppliers were going to do things right.
• 11:24
  SPEAKER_00: So we expected American hospital supply, for example, to get our stuff to us when we ordered it.
• 11:30
  SPEAKER_00: We didn't have it, we didn't have any we didn't have any system cardinal for the rest of us.
• 11:36
  SPEAKER_00: I know.
• 11:37
  SPEAKER_00: Uh I remember that.
• 11:38
  SPEAKER_00: I said that on purpose just so that uh but but and it worked.
• 11:43
  SPEAKER_00: I mean, and it worked.
• 11:44
  SPEAKER_00: And our job then was transactional.
• 11:48
  SPEAKER_00: It was never operational, it was never strategic, it was just transactional.
• 11:52
  SPEAKER_00: Get what the doctors want, order it, and make sure it gets there on time.
• 11:56
  SPEAKER_00: And it was much simpler because number one, all the most of the places were community hospitals, so there wasn't the great complexity that exists now.
• 12:05
  SPEAKER_00: And number two, those guys are good at what they did at that time.
• 12:08
  SPEAKER_00: And and uh in recent years, there have been more and more and more disruptions.
• 12:14
  SPEAKER_00: And and you know, whether it be weather related, whether it be geopolitical, uh, whether it be uh financial within the healthcare industry itself, uh, to the point where now healthcare, if now healthcare supply chain leaders are expected to know something about supply chain and to lead supply chains.
• 12:34
  SPEAKER_00: So you came out you came out of the supply chain leadership role at a time when that was getting more and more important and went into a um uh a supplier.
• 12:46
  SPEAKER_00: Can you pronounce the name of your company?
• 12:48
  SPEAKER_00: Because I don't pronounce it correctly correctly.
• 12:50
  SPEAKER_02: Absolutely.
• 12:50
  SPEAKER_02: It's Mönlika.
• 12:52
  SPEAKER_02: It's Swedish.
• 12:53
  SPEAKER_02: Uh and it's actually a town in Sweden called Mönlicka, it's outside of Gothenburg.
• 12:58
  SPEAKER_02: That's where the town the company has origins.
• 13:01
  SPEAKER_00: Well, I'm glad I asked because I would have screwed that one up.
• 13:04
  SPEAKER_02: There'll be a quote there.
• 13:05
  SPEAKER_00: So, what differences have you seen from working in the caregiver side and what you discovered when you've gone back?
• 13:14
  SPEAKER_00: I mean, you started out in biotech, but now you've gone back into a tell us what tell us what your company does, just for many people that might not know.
• 13:21
  SPEAKER_00: And what difference have you seen, though, when you've entered in there as to how your company perceives A, the supply chain, and B, the interrelationships or the interactions with the customers?
• 13:32
  SPEAKER_02: Absolutely.
• 13:33
  SPEAKER_02: Um, my company first, uh, it's a med tech company, uh, makes medical devices.
• 13:39
  SPEAKER_02: Uh, the the division I work for is the biggest of the four.
• 13:42
  SPEAKER_02: It is uh advanced wound care.
• 13:43
  SPEAKER_02: Now there's some basic wound care in there, but what we produce primarily is some of the advanced wound care.
• 13:48
  SPEAKER_02: How advanced wound care is different than basic wound care is a moist wound.
• 13:51
  SPEAKER_02: What we discovered 60 years ago as a species is that that moist wounds heal faster.
• 14:00
  SPEAKER_02: So Manluk has developed a a uh dressing that uh allows for rapid healing, it allows for prevention, which is equally important, uh, as healthcare understands, especially from you know never events.
• 14:13
  SPEAKER_02: Um but it allows for protection of new skin.
• 14:16
  SPEAKER_02: It's a really excellent dressing.
• 14:18
  SPEAKER_02: I hope you never need our products, but if you do need something for advanced woman care, Menlika is what you want.
• 14:23
  SPEAKER_02: That said, it's very expensive, but not on a per use basis.
• 14:27
  SPEAKER_02: And I study that objectively from the last formal hospital-based value analysis project I was involved with prior before, long before I knew it was coming to uh to Menlika, um, did a comparison between uh Manlika and a competitor.
• 14:42
  SPEAKER_02: And while the per use cost at that time, five years ago, was more expensive, the marginal cost was lower because you used less of them.
• 14:50
  SPEAKER_02: So that's all part of the value analysis process in healthcare.
• 14:53
  SPEAKER_02: We're all used to that.
• 14:54
  SPEAKER_02: But the patient, the harder stuff to measure, patient outcomes, faster healing, less pain, better patient compliance, it's all right there.
• 15:03
  SPEAKER_02: If it's easy to use, it's it's uh safe and less uh less pain involved, so it's good.
• 15:08
  SPEAKER_02: So you got you got a wound care division, you've got the ORS division, operating room supplies, which is uh custom kits.
• 15:14
  SPEAKER_02: Oddly enough, Malika is the largest custom kit manufacturer in Europe.
• 15:18
  SPEAKER_02: Um and uh dressings, drapes, gowns uh can come to the US, primarily not uh uh kits though, to the US.
• 15:26
  SPEAKER_02: And then there's the uh antiseptics division, you may have heard of HIBACLENS, and then uh surgeon gloves, which is the first exposure I had when you and I were at a uh an IDN function.
• 15:40
  SPEAKER_02: I think we were in Cedar Rapids for that one, weren't we?
• 15:43
  SPEAKER_02: Looking at surgeon gloves, which were crazy expensive, but very popular amongst surgeons for the tactile experience.
• 15:50
  SPEAKER_02: So it's uh bottom line, better outcomes for the clinicians, make make for happier clinicians, and ultimately less ulcers for supply chain leaders in healthcare.
• 16:00
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• 16:27
  SPEAKER_00: So getting back though, what difference have you seen uh in how the supply chain is regarded and how it operates from the supplier side versus the uh provider side?
• 16:38
  SPEAKER_02: Sure.
• 16:39
  SPEAKER_02: Uh provider side, uh it's it's it's I would consider still more transactional, uh more GPO dependent.
• 16:47
  SPEAKER_02: Of course, the larger IDNs will go after higher and higher amounts of spend and bring that in in-house and manage that themselves.
• 16:53
  SPEAKER_02: And they should.
• 16:54
  SPEAKER_02: There should be a threshold where you let your GPO, your group purchasing organization run with it.
• 16:59
  SPEAKER_02: Um, whereas in manufacturing, we have that to some degree.
• 17:04
  SPEAKER_02: Um there's category managers to help with certain uh multi-factory or multi-region uh suppliers, so it's better coordinated, better leveraged with visibility of the numbers and the usage and the authority.
• 17:20
  SPEAKER_02: Um, we tend to be more intimately familiar with the manufacturers, right?
• 17:26
  SPEAKER_02: Because we're buying all the components, putting it all together.
• 17:28
  SPEAKER_02: And when there's a problem with a lot or a production process or printing on a uh on a uh a label, uh you have to work with suppliers and partner with them to get it done.
• 17:40
  SPEAKER_02: Every supplier has their issues, you know.
• 17:42
  SPEAKER_02: The distributors, oh, it's a manufacturing error.
• 17:45
  SPEAKER_02: Well, come to find out that typically those distributors will allow for deliveries from certain manufacturers one time a week.
• 17:51
  SPEAKER_02: And if they miss the window for whatever reason, uh either timing or logistics problems or maybe you know, payment issues, uh, then suddenly they're a week out or two weeks out or whatever it is.
• 18:02
  SPEAKER_02: And so it's not necessarily a manufacturer back order issue.
• 18:05
  SPEAKER_02: It could be a lot of steps in that supply chain.
• 18:09
  SPEAKER_02: But whereas when I was in healthcare, I would rely on my primary distributor and some of the uh uh the individual relationships for the the physician-specific items.
• 18:20
  SPEAKER_02: Uh here it's it's uh there's a lot of people to touch base with a lot of data points to manage uh in terms of the supplier, the vendor master file, which we have recently, recently two years ago, opted to maintain that as an add-on to our ERP system.
• 18:36
  SPEAKER_02: And just a lot of activity with that.
• 18:38
  SPEAKER_02: But uh, you know, I for one am looking forward to AI taking more of that responsibility because it's just a lot of administrative tasks.
• 18:46
  SPEAKER_02: But so a lot of, I guess ultimately working closely with your suppliers, knowing who they are, at least the big ones, you always, you know, 80% of your time on 20% of the suppliers.
• 18:57
  SPEAKER_02: Pareto had it right from the get-go, but uh um it's knowing who they are and how they operate.
• 19:04
  SPEAKER_00: Well, is it fair to say that um you can't afford not to pay attention where you are?
• 19:09
  SPEAKER_00: And I'm not saying that healthcare doesn't pay attention.
• 19:15
  SPEAKER_00: What I'm saying is you have two actual supply chains.
• 19:17
  SPEAKER_00: You have the you have the supply chain that that comes to you with uh with the components needed to produce your products, and then you have the supply chain that pushes the finished product out to the out to the people that are buying your products.
• 19:30
  SPEAKER_02: Absolutely.
• 19:31
  SPEAKER_00: So on on the first side, uh you have to pay assiduous attention to these guys because if they if you don't have things, it interrupts the manufacturing process.
• 19:41
  SPEAKER_00: And on this side, you have to pay attention because if you don't have tight relationships, uh the stuff doesn't get where it's going and you lose customer trust, if you will.
• 19:50
  SPEAKER_02: Is that fair?
• 19:51
  SPEAKER_00: Correct.
• 19:52
  SPEAKER_02: That's very true.
• 19:52
  SPEAKER_02: Interestingly, in at least in our organization, where I'm as used to having full control over every product movement in healthcare, not the case in man in this organization.
• 20:02
  SPEAKER_02: Everything inbound is really in under my purview.
• 20:07
  SPEAKER_02: Um, outbound, not so much.
• 20:09
  SPEAKER_02: Now, when there's problems with outbound, do I get involved?
• 20:11
  SPEAKER_02: Sure.
• 20:12
  SPEAKER_02: But there's only so much I can facilitate, I can I can influence, I can suggest, and I guess that's true for any leader, but you you work together to overcome obstacles because ultimately, at the end of the day, it's about bringing products together and getting them to the end user to accomplish your mission.
• 20:31
  SPEAKER_00: So you'd say that your uh your your chief focus is on the manufacturing side of the equation, and the other side would be transportation and logistics, which when you were in healthcare was taken care of by the distributors, if you think about it.
• 20:45
  SPEAKER_00: Uh they got the stuff to you, you know.
• 20:47
  SPEAKER_00: Um, and um the one thing that I always thought of, uh just since I've been at St.
• 20:54
  SPEAKER_00: Ange, was that when I was running supply chains, I was always dealing with the sales team of the of the supplier.
• 21:02
  SPEAKER_00: I never dealt with uh uh supply chain uh folks.
• 21:06
  SPEAKER_00: You didn't even know they had them.
• 21:08
  SPEAKER_00: I mean, I I had them, but it never dealt with them.
• 21:10
  SPEAKER_00: Um that how how do you guys how do you folks look at the people who purchase your how do you how do you interact with customers is what I'm uh trying to get at.
• 21:20
  SPEAKER_02: Well, we do have a patient advisory board or customer advisory board of clinicians, in our case, uh wound and ostomy care nurses, right?
• 21:28
  SPEAKER_02: Um that that can give feedback.
• 21:30
  SPEAKER_02: Um interestingly, we're gonna have a uh a virtual customer care visit tomorrow morning, actually, Eastern, eight o'clock Eastern time, for our whole division to to take part in, to help educate the internal folks at Melika.
• 21:43
  SPEAKER_02: I'm in a unique position, right?
• 21:44
  SPEAKER_02: I was in healthcare.
• 21:45
  SPEAKER_02: I understand that world.
• 21:46
  SPEAKER_02: I know the pains and and uh um and and the the pleasures of it, but the most of my peers do not.
• 21:54
  SPEAKER_02: So if the more this company is trying to raise that bar by helping everybody understand better why it is we're doing what we're doing, not just a patient example, but talking to the customers of of the products.
• 22:05
  SPEAKER_02: So if that's good.
• 22:07
  SPEAKER_02: Um I would I would think that that for the most part, people all want to do a good job, but it's up to us to educate them.
• 22:16
  SPEAKER_02: And that's as true as you know within the purchasing function at healthcare as it is in manufacturing.
• 22:23
  SPEAKER_02: At the end of the day, uh, you my responsibility is in this role is to ensure that uh the proper goods and services are delivered on time at the right cost and right quantity uh for the organization to meet its needs.
• 22:36
  SPEAKER_00: Okay, so given the current state of uncertainty and disruption that's out there, and um are you planning uh to make any uh changes and in anticipation of upcoming events?
• 22:49
  SPEAKER_00: Uh, how is the present uh uncertainty affecting your company?
• 22:56
  SPEAKER_02: Well, I'd like to say I have a direct line to the White House, but I don't.
• 22:59
  SPEAKER_02: Um I think uh there's always going to be uncertainty.
• 23:03
  SPEAKER_02: We didn't start the fire, as Billy Joe likes to say.
• 23:05
  SPEAKER_02: And it's just about trying to read the tea leaves and navigate through.
• 23:10
  SPEAKER_02: During COVID, when I was in healthcare, and prior to the COVID hitting, I said, you tell me the disaster, I'll give you the plan.
• 23:17
  SPEAKER_02: But what I learned from that is your core products, your core services, your core needs, you always have to have uh a plan B for everything.
• 23:26
  SPEAKER_02: So we have been working on dual sourcing or localized sourcing localized being in a from a global sense, anything in North America, um, trying to bring products in and getting them validated for use.
• 23:40
  SPEAKER_02: You would think that inkjets and inkjets is inkjet.
• 23:43
  SPEAKER_02: Nope, not the case.
• 23:44
  SPEAKER_02: So it there's a lot of complexity on our side to make sure that happens.
• 23:48
  SPEAKER_02: It's all it takes time, it's it's expensive, but we're doing that.
• 23:53
  SPEAKER_02: We just got final approval for parametric release on sterilization from a second chamber for a company.
• 24:01
  SPEAKER_02: If I said the name, you'd know them, um, in Atlanta that we uh can can can release our sterilized products from.
• 24:09
  SPEAKER_02: And that's taken like 18 months to get done.
• 24:11
  SPEAKER_02: It's just it's just challenging.
• 24:13
  SPEAKER_02: Everybody's running lean, uh, but we got it done.
• 24:15
  SPEAKER_02: So it's being on top of all the things that could come your way, knowing who your your sources are, having dual sources, managing your raw material inventory levels as needed.
• 24:27
  SPEAKER_02: Um tariffs, uh I I personally treat them like a tax.
• 24:31
  SPEAKER_02: We don't know if they're gonna be here long term or not.
• 24:33
  SPEAKER_02: So what you know, we are taking steps to to to become more sophisticated in terms of uh foreign trade zones.
• 24:40
  SPEAKER_02: Um then that is going live as we speak.
• 24:44
  SPEAKER_02: So there's but that's not tariff related, it's just it hopefully we'll have some some ultimate help with duties long term, which I think financially will be.
• 24:52
  SPEAKER_02: In fact, I pretty confident it will.
• 24:54
  SPEAKER_02: But kudos to our finance team for heading that one up.
• 24:58
  SPEAKER_02: Um, I get just knowing who your supplies are, knowing your options are, and being flexible.
• 25:05
  SPEAKER_00: But so you're but you're what you've told me is that your your company is uh alert to that stuff that's going on and you're trying to uh uh plan and react proactively so that you minimize any surprises that may occur.
• 25:19
  SPEAKER_00: Is that fair?
• 25:20
  SPEAKER_00: Correct, correct.
• 25:21
  SPEAKER_02: And and when you do that, be prepared.
• 25:24
  SPEAKER_02: I encourage everybody to do that.
• 25:25
  SPEAKER_02: If you haven't done it, make sure you have that lined up.
• 25:27
  SPEAKER_02: Be prepared for having your finance team push back because when you deleverage yourself from a supplier, your marginal cost will increase.
• 25:37
  SPEAKER_00: Well, you know, now that you've made the dive into the water of uh what we would call the bad guys if we were in supply chain, not really.
• 25:45
  SPEAKER_00: Uh uh, have you ever thought about uh a return to uh the um the uh healthcare provider side in the future?
• 25:56
  SPEAKER_02: Well, I wouldn't be completely honest if I didn't say yeah, I have.
• 26:00
  SPEAKER_02: Uh it's it would be a a good way to transition as as I'm entering a new phase in my life uh um to to go back to my roots and to really bring the value of what I've learned in manufacturing in my uh my couple years of interim travel and consulting uh from my positions you know in Iowa Health and Aurora to really bring that leverage to bear for what I consider the truth the truly meaningful work, getting closer to the patients.
• 26:37
  SPEAKER_02: That's that's really what we did it for.
• 26:38
  SPEAKER_02: Uh at least that's what I did it for.
• 26:41
  SPEAKER_02: It was always to make life better for our family, friends, and neighbors.
• 26:46
  SPEAKER_02: My teams, wherever I've been, have heard that exact phrase.
• 26:49
  SPEAKER_02: What we do, we do for our families, friends, and neighbors.
• 26:53
  SPEAKER_00: Yep.
• 26:53
  SPEAKER_00: So uh what specific what specific things have you learned that you didn't know before you got uh on this side of the uh transaction, would you take back and start to try to implement uh on the on the um acute care side?
• 27:10
  SPEAKER_02: I would say that for uh any price negotiations, uh approach them with a critical eye.
• 27:18
  SPEAKER_02: Really pressure GPOs, really challenge your own teams locally to get to the the right cost because there is margin there.
• 27:27
  SPEAKER_02: Now, there should there be margin there?
• 27:29
  SPEAKER_02: Absolutely.
• 27:29
  SPEAKER_02: It drives RD, it drives development, it drives improved processes.
• 27:34
  SPEAKER_02: What got us here today won't get us there tomorrow, right?
• 27:37
  SPEAKER_02: So there needs to be uh RD happening uh at these manufacturers.
• 27:43
  SPEAKER_02: But uh, how much is enough when you're in healthcare?
• 27:46
  SPEAKER_02: If you're making between if you're making 3% margin at the end of the year, you're a rock star.
• 27:51
  SPEAKER_02: Now, we could all discuss that there's physician salaries and administrator salaries and insurance costs for risk mitigation that need to be managed, right?
• 28:01
  SPEAKER_02: But if also from a uh valued former CEO, if you pay peanuts, you get monkeys, right?
• 28:07
  SPEAKER_02: So you got you gotta have the right people with good leadership skills calling the shots.
• 28:12
  SPEAKER_02: It's it's about getting the mission accomplished in a way that's sustainable, that everybody can live with, it's consistent, it'll be there tomorrow.
• 28:20
  SPEAKER_02: And so you want the right people doing the right work.
• 28:23
  SPEAKER_02: That said, supply chain, it's quality service and cost in the negotiations that drive value.
• 28:32
  SPEAKER_02: So so make sure you're staying focused and objective on that.
• 28:35
  SPEAKER_02: Don't go in blind with it.
• 28:37
  SPEAKER_02: Do your research.
• 28:38
  SPEAKER_02: Gosh, with with AI as it's coming along, there's ways that you can anticipate, and it'll only get better as as we can share it, but but tie into your networks, tie into um your your peers to know where the costs are, what better practices there are, understand the cost drivers with your supplier.
• 28:57
  SPEAKER_02: That's true in manufacturing and healthcare.
• 29:00
  SPEAKER_02: Understand better how you can find the win-wins, and the wins will come to you.
• 29:07
  SPEAKER_00: That's great, Stuart.
• 29:08
  SPEAKER_00: So, one final question.
• 29:10
  SPEAKER_00: What advice would you have for suppliers and healthcare organizations uh and how they should how they should interact with each other in the future?
• 29:21
  SPEAKER_02: I truly believe it needs to be more collaborative as time goes by.
• 29:25
  SPEAKER_02: Suppliers, yes, if they're in a true competitive environment, they're going to need to protect their elements.
• 29:30
  SPEAKER_02: But I can tell you right now that a lot of the smaller suppliers that I've dealt with work with some of their competitors in an under, not I don't see under the table, but in an offline confidential sort of way where they can support each other to keep the doors open.
• 29:44
  SPEAKER_02: Now, the big boys would wouldn't do that, and I get that.
• 29:47
  SPEAKER_02: Um but you need to collaborate.
• 29:49
  SPEAKER_02: Your people, you run the risk of losing your people anyway.
• 29:52
  SPEAKER_02: Might as well attract the good ones that want to come to your organization, build your culture such that that uh that everybody's committed to to.
• 30:00
  SPEAKER_02: Quality and growth and value, value creation as much as you can.
• 30:06
  SPEAKER_02: But no, suppliers, I think, and systems are gonna be more collaborative, especially as the costs of health care in the United States continue to go up.
• 30:16
  SPEAKER_02: We're just we're we're in Maine, uh fairly rural state, right?
• 30:20
  SPEAKER_02: We're looking at one hospital closing at the end of this week.
• 30:24
  SPEAKER_02: And we're gonna have to lose a couple more in the weeks and near-term years ahead, especially as budget constraints hit from Washington, and they don't want to fund those levels, unless these health systems can really keep costs low to provide what is exactly needed in the right quantity and quality, which you know always should be good quality, right?
• 30:46
  SPEAKER_02: Um we're gonna continue to uh have our mission eroded underneath us.
• 30:52
  SPEAKER_02: So pay attention, be proactive, work together, work with the legislators, make sure that your your costs are in control and your quality is always top-notch.
• 31:03
  SPEAKER_00: Yeah, well, Stuart, you know, thank you.
• 31:05
  SPEAKER_00: Yeah, Fort Dodge is still in business, right?
• 31:08
  SPEAKER_02: Yes, they are.
• 31:09
  SPEAKER_00: Very proud of that town, very proud of that hospital and uh system.
• 31:13
  SPEAKER_00: And the reason I why I say that is now their Iowa Health is now known as Unity Point.
• 31:19
  SPEAKER_00: So that is that is an example of which bigger made it possible for things to become better and for a community to retain uh its focus and its uh you know the the heart of its community's health care because of the because of the um uh added uh resources that the larger IDN was uh brought to the operation.
• 31:45
  SPEAKER_00: Fair enough?
• 31:46
  SPEAKER_02: They would have really struggled with their cardiac and orthopedic programs in that region of the state without that greater support.
• 31:53
  SPEAKER_00: Well, Stuart, thank you so much for sharing your time with us.
• 31:56
  SPEAKER_00: Um, you know, I've I've always wondered what uh it was like on the other side, and now you've given me some insight.
• 32:02
  SPEAKER_00: And uh and what I what I think I heard you say also is you know, we can communicate with each other, we can cooperate, and we can both succeed.
• 32:11
  SPEAKER_00: Is that fair?
• 32:12
  SPEAKER_02: Absolutely true.
• 32:13
  SPEAKER_02: That's that's it.
• 32:14
  SPEAKER_02: If you take away anything, take away that.
• 32:16
  SPEAKER_00: Okay, Stuart, thanks so much for joining us.
• 32:19
  SPEAKER_00: And um, it's good to talk to you.
• 32:22
  SPEAKER_02: Fred, an honor and a privilege.
• 32:23
  SPEAKER_00: Thank you.
• 32:26
  SPEAKER_01: Well, that's all for today.
• 32:28
  SPEAKER_01: Thanks again for joining.
• 32:29
  SPEAKER_01: And as always, don't forget to subscribe and connect with us online where you can find all of our episodes.
• 32:35
  SPEAKER_01: If you have a topic you would like to discuss or want to be a guest on the show, you can reach out to Fred directly at F C R A N S at S T O N G E dot com.
• 32:46
  SPEAKER_01: See you next time.