AI For Healthcare Supply Chain

1 - > SPEAKER_00: Welcome back to another episode of Taking the 2 - > Supply Chain Pulse. 3 - > I'm Joe Nemeth with St. 4 - > Orange Company, and today we're joined by Eric O'Daffer, 5 - > Managing Director of Healthcare Advisory LLC and former head of 6 - > healthcare at Gartner. 7 - > Eric brings decades of experience at the intersection 8 - > of strategy, innovation, and healthcare leadership.

9 - > So let's dive in with your host, Fred Crantons. 10 - > Take it away, Freddie. 11 - > SPEAKER_03: So, Eric, uh welcome. 12 - > Happy to have you on.

13 - > SPEAKER_02: It's great to be here, Fred. 14 - > Looking forward to it. 15 - > SPEAKER_03: You're out there in Seattle, right? 16 - > Is it raining?

17 - > SPEAKER_02: It is going to rain. 18 - > Uh, you know, just drips. 19 - > Uh this is the time of year we call January here. 20 - > Uh the rest of the country gets summer, and we get uh, you know, 21 - > 55 and rainy for the first couple weeks of June, but then 22 - > it turns beautiful and is uh you know the greatest place on 23 - > earth.

24 - > But uh the June, early June, not uh not our best foot forward. 25 - > SPEAKER_03: It is a great place. 26 - > I I love it out there. 27 - > So what tell us, Eric, um what have you been doing since you 28 - > left Gartner?

29 - > You you left what a couple years ago or a little over a year ago? 30 - > What have you been doing? 31 - > SPEAKER_02: Yeah, well, it uh you're you're right. 32 - > It's been just a little over a year, uh I think April of uh 33 - > 2025, and um you know I intended to retire um and uh kind of done 34 - > what I could do at at Gartner, I felt that it had run its course 35 - > for me.

36 - > Um still believe in in what they're doing over there, but uh 37 - > for me it was it was time to to be done. 38 - > And then uh a few companies reached out as I did that and 39 - > said, Hey, how about this? 40 - > And it was just kind of fortuitous that uh, you know, it 41 - > caused me to have to think about, okay, well, what do you 42 - > want to do in the last innings here, your your career? 43 - > Um, and uh, you know, kind of forced me to think about what 44 - > what that guiding light was, what that true north was.

45 - > And uh I just I picked three companies to work with uh in 46 - > areas that I thought would be uh thought would be interesting for 47 - > me. 48 - > Well, what is that true north? 49 - > Well, the true north's helping advance healthcare supply chain. 50 - > Um so that that's the overriding uh piece of it.

51 - > Um and you know, out of the gate, I'm really doing it in 52 - > three ways. 53 - > Uh one is is through AI and technology adoption. 54 - > Uh and in that realm, I'm supporting uh a company called 55 - > Clarion. 56 - > Uh, it's an AI uh platform company.

57 - > Uh I'm working on indirect spend, right? 58 - > I watched uh the areas of supply chain, 40% of the total cost of 59 - > supply chain if the health system is related to products 60 - > that don't come and of services that don't come in a box. 61 - > Um, you know, 800 different categories of them. 62 - > I watched it, wrote research around it, and uh it just hadn't 63 - > made a lot of progress.

64 - > So in that capacity, I'm an advisor for uh a new company to 65 - > the industry called Logic Source. 66 - > They've been around in other industries with great success uh 67 - > and are bringing that model to healthcare. 68 - > It's been uh it's been a great service so far. 69 - > Uh and then lastly, I work with Visiant on metrics and 70 - > benchmarking.

71 - > Uh so uh the work that they have uh kind of looked at that and 72 - > said, I'd done a lot of work around how systems think about 73 - > their maturity and uh and and how they measure that, both 74 - > quantitatively and quantit quantitatively, qualitatively 75 - > and quantitatively, uh, and trying to use uh kind of 76 - > determine that had a company that had data in an ecosystem uh 77 - > was another interesting way to look at it uh to get you know a 78 - > more definitive comparison of of what that looks like.

79 - > So I'm trying to help Vizn around that for their uh for 80 - > their membership. 81 - > So you know, kind of maturity, AI and technology, and then you 82 - > know, these areas of underdeveloped spend. 83 - > And uh I may at some point add to capital equipment. 84 - > It's another area that I find pretty interesting.

85 - > Uh it's a much bigger part of supply chain than most people 86 - > think, uh, about 7% of the total spend uh and it gets 87 - > underrepresented. 88 - > So I don't do anything there specifically, but uh I've got 89 - > interest. 90 - > SPEAKER_03: Well, you know, I I think uh when you talk about 91 - > capital, you're sort of getting into another thing that I see, 92 - > and that is as as IDNs uh grow and become uh continue to 93 - > acquire and merge with other uh hospitals or systems, uh they're 94 - > acquiring uh places that needed help or they probably wouldn't 95 - > have failed to the point where they had to merge.

96 - > Is that fair to say? 97 - > And then if that is fair to say, then there's a whole area that 98 - > they have probably ignored or done poorly, and that is capital 99 - > equipment planning and and and uh and standardization and and 100 - > the philosophy of of how to maintain that capital equipment. 101 - > I was at ARM a couple years ago and uh I was at a presentation 102 - > by an Air Force colonel, and there were a whole bunch of 103 - > senior officers in the in the background.

104 - > And when we got done, I asked one of the Air Force colonels, I 105 - > said, you know, how come the defense budget is shot up to the 106 - > point where it's nine hundred and seventy billion dollars now? 107 - > And he says because of the cost of uh of capital equipment, 108 - > because of the cost of capital and uh weapons, and and uh he 109 - > said it's not the people, it's the stuff. 110 - > And I think if that's true there, it's also true in 111 - > healthcare. 112 - > But let's get into your three areas.

113 - > Um talk about this. 114 - > I noticed you had written to me about doubling investment in 115 - > technology, uh AI and analytics. 116 - > Uh, how would you go about doubling investment in 117 - > technology? 118 - > Where would you focus your efforts?

119 - > And just give us a little bit of your insights on that area. 120 - > SPEAKER_02: Yeah. 121 - > In some of the benchmarking work uh, you know, that I'd done in 122 - > the past, uh, we don't cover that, you know, this area just 123 - > wasn't uh it was a small portion of the operating budget of 124 - > supply chain. 125 - > Um, you know, and so I looked at it and a lot of it was tied to 126 - > ERP investments, and then some of these kind of just I call 127 - > them kind of episodic platforms that the that organizations had 128 - > bought over the years.

129 - > And this is at the health system level. 130 - > Um and uh so I I just I think as you kind of come through this, 131 - > we've invested a lot in you know, kind of capital assets and 132 - > a lot of stuff around logistics and the movement of products, 133 - > specifically MedSurge. 134 - > And I just think we need to shift some of this budget to 135 - > thinking about how we get to these AI platforms that start to 136 - > tie the data together on multiple different efforts and 137 - > leverage and take out costs of uh employees through the use of 138 - > agents uh and use that data in a different way to uh aid and 139 - > assist in standardization, uh, ways to think about inventory 140 - > and risk and resiliency.

141 - > So there's all these different kinds of roadmaps that these 142 - > these companies uh that are building out these platforms 143 - > have, um, and and health systems for whatever reason, I think 144 - > some of it's just that they haven't been able to get 145 - > investment in many cases, or at least the middle of our market 146 - > hasn't been able to do that, should be leaning into these 147 - > technologies, uh voting with their dollars to support them, 148 - > uh picking a platform company that's got a roadmap that aligns 149 - > to what they're doing, um, you know, and and then expect, uh, 150 - > much like you'd buy a CSC and use that as a city on a hill to 151 - > drive compliance and understanding a supply chain, 152 - > these data and technology and AI investments to leverage and 153 - > bring the value from the 40% of the health system budget that's 154 - > tied to supply chain should just be something that that health 155 - > systems are leaning into.

156 - > And for whatever reason, um, you know, we've we've we've looked 157 - > at some of these vendors over the years as at kind of an arm's 158 - > length, many, many have. 159 - > Um, and I think it's time to do what other industries have done, 160 - > which is embrace them, uh, bring them into the fold, invest in 161 - > them, uh, expect a lot out of them when you're doing it, but 162 - > uh but uh but lean in a little bit more than we've done. 163 - > SPEAKER_03: You know, you have a you have sort of a wide global 164 - > view of of healthcare.

165 - > So your your experience spans you know uh a great gamut. 166 - > Uh is there anyone that is approaching the use of 167 - > technology and AI? 168 - > And I don't say just AI, technology and AI uh well that 169 - > you've seen that you could tell us about. 170 - > And uh what what areas of operations, either in supply 171 - > chain or in just the healthcare uh organization itself, would 172 - > you sort of earmark as places to start uh with the use of AI?

173 - > SPEAKER_02: Yeah, I mean there's I view it as a haves and have 174 - > nots. 175 - > Uh and you know, you can you can look to some of the more mature 176 - > health systems uh in my old world at Gartner, uh the Mayo 177 - > Clinics, the Cleveland Clinics, uh Intermountain, um, Stanford, 178 - > uh, Advent Health. 179 - > I mean, some of these organizations have really 180 - > invested in this and seen it as some of their um, you know, kind 181 - > of core operations of their business.

182 - > And there's more uh, you know, that have have done that as 183 - > well. 184 - > But uh, you know, those are good places to look and go, hey, how 185 - > are they bringing these 30 to 60 different areas that have data 186 - > for supply chain somehow touching it and bringing it to 187 - > the market? 188 - > Um, you know, and to me it's not it's not that hard. 189 - > There's a risk and resiliency piece of this, a service piece 190 - > that are being built out.

191 - > Uh, there's the ability to take uh, you know, and and use AI and 192 - > the transaction to make sure that you're getting the right 193 - > price, um, you know, in the in perfect order, um, you know, and 194 - > and make sure you're capturing all the value in the financial 195 - > transaction. 196 - > Um there's a lot of work uh that is being done that's really uh 197 - > effective and cool in preference card clinical areas uh and the 198 - > way that those are being managed and standardized in in a way 199 - > that uh that brings new value.

200 - > Um, you know, and then there's there's leverage across other 201 - > applications as well uh that sit in contract lifecycle 202 - > management. 203 - > Uh there's ways to use AI in the way that indirect spend is being 204 - > managed. 205 - > Um and so I think what you have to do is find those companies 206 - > that are really employing it and not just words, word giving 207 - > words to it, but showing and demonstrating resources that are 208 - > out there. 209 - > And uh, you know, it it lends you to some of these companies 210 - > that are, I mean, we don't have a lot of venture-backed 211 - > organizations that are coming into the healthcare supply 212 - > chain, but there are some uh that are that are out there that 213 - > are bringing real dollars, real investment into the uh industry, 214 - > and you know, we should be finding a way to support those.

215 - > And um, you know, if the incumbents are uh investing in 216 - > those areas, we should be leaning into the solutions that 217 - > they're bringing too. 218 - > SPEAKER_03: Are there are there companies that uh you know the 219 - > the the rapid rise in technology is so recent? 220 - > Are there uh companies out there that can show demonstrated ROIs 221 - > for their for their uh offerings? 222 - > The measured ROIs that they actually have produced results, 223 - > or is it still all a narrative under part?

224 - > SPEAKER_02: No, there's companies that are that are 225 - > doing it. 226 - > Um, you know, some of them, uh, you know, you've got to you've 227 - > got to attribute some um you know soft dollars of value to it 228 - > uh in a in a little bit. 229 - > You know, what's the value of resiliency uh, you know, and a 230 - > predictable supply chain is tougher. 231 - > Some of the stuff that's around preference card management uh in 232 - > the OR and some of the transactional pieces uh that go, 233 - > hey, are we are we paying the same price?

234 - > Uh are we are we rationalizing uh you know and making sure 235 - > we're taking advantage of all our terms systematically? 236 - > Uh are we thinking about our spend and categorizing it in the 237 - > right way? 238 - > Some of those areas are showing some pretty clear ROI. 239 - > Um, you know, but as you mentioned, we're early, right?

240 - > This is, I don't know, inning two uh of a nine-inning game. 241 - > Um and so it's some of this is an evolving practice where 242 - > leaders are are layering into these technologies and learning 243 - > from each other. 244 - > Um, and so it's almost like a sandbox in a way that go, hey, 245 - > let's learn from each other. 246 - > We're developing you know these solutions for um, you know, 247 - > other health systems that uh that we may not be competitive 248 - > with, and how do we learn from each other?

249 - > Um, you know, but you've got to at the end of it have investment 250 - > in those resources to go after it. 251 - > And uh, you know, those are some of the companies that I'm trying 252 - > to lean into where they've got those resources, they've got 253 - > that platform, um, you know, and they're and they're coming at it 254 - > from a a different angle, uh, you know, with that investment 255 - > in uh in tow. 256 - > SPEAKER_03: And and then you have the uh systems.

257 - > Are the systems eager to incorporate technology or are 258 - > they desperate to incorporate technology? 259 - > SPEAKER_02: Uh I'd say eager would be better. 260 - > Uh many of them just don't quite know, you know, kind of where to 261 - > go, or they may pick a a place. 262 - > Uh, you know, they may be under pressure to reduce their staff.

263 - > That's still a um, you know, a pretty pressing issue, um, uh 264 - > supply chain talent uh and staffing. 265 - > And so there's some folks that are very you know centered on 266 - > the agent model and how they reduce labor through this. 267 - > I I think the bigger opportunities on the data uh and 268 - > the way that you yield that data and tie those systems together 269 - > and use AI to make better decisions uh and and and enable 270 - > cost savings. 271 - > Um but I think most see it as an opportunity, it's kind of a 272 - > carrot.

273 - > But there's also many, because you you know you talked about 274 - > the ROI, um, where the ROI is is is out there, um, you know, they 275 - > they don't want to go implement 20 different solutions. 276 - > Um so it's what's led me to this kind of platform concept, which 277 - > is hey, pick a platform, uh, and there's there's multiple out 278 - > there uh that's got a roadmap that you believe in. 279 - > Um get your organization to buy into, because most most of the 280 - > health systems are saying, you know, they've got an AI strategy 281 - > uh for the for the whole business.

282 - > Um and how do you incorporate and layer in this supply chain 283 - > AI strategy that uh that that fits into that uh fits into that 284 - > mold. 285 - > So I think you've got to look at it as an opportunistic way to 286 - > yield benefits from multiple things without having to 287 - > implement you know six different partners uh or 10 different 288 - > partners or 12 different. 289 - > So I kind of view it's not necessarily best in class spot 290 - > solution. 291 - > It is platform with an expectation that you're gonna go 292 - > down the roadmap uh and spend more money and give more 293 - > resources to those companies that are that are building out 294 - > solutions that'll help you in aggregate across multiple 295 - > different areas of your supply chain.

296 - > SPEAKER_03: It's gonna take a lot of uh collaboration. 297 - > It's not just buy a box, plug it in, and uh see immediate uh 298 - > measurable savings. 299 - > You're gonna have to you're gonna have to work back and 300 - > forth with uh the supplier of this of this technology. 301 - > Is that fair to say?

302 - > SPEAKER_02: Yeah. 303 - > I mean, uh particularly in these early days. 304 - > Um, you know, and I guess those are always the questions, right? 305 - > Are you an early adopter, are you a late adopter?

306 - > Um, you know, my my take is it's better for most folks to be an 307 - > early adopter um, you know, and and and be part of the solution 308 - > and and building it out, right? 309 - > It's a collaborative industry that's got a lot of good things 310 - > going for it. 311 - > Um, you know, because if you wait for it to all be built out 312 - > in a perfect, you know, hey, just go do this and implement 313 - > it. 314 - > It's five years and you know, you're behind the uh you know, 315 - > you're behind the curve of of value compared to your peers.

316 - > And you know, everything that we know from the financial pressure 317 - > side says the next couple of years are gonna look a little 318 - > rougher uh just because of the reimbursement and the big, 319 - > beautiful bill and all the things that are are coming. 320 - > We'll see what actually comes from it. 321 - > But uh, you know, uh healthcare futurists that uh that I listen 322 - > to are saying, hey, this is this is gonna come to roost. 323 - > And um, you know, those that are preparing and thinking about it, 324 - > I think are gonna be ahead of it.

325 - > Um and my my strategy always for the chief supply chain officers 326 - > is you're the CEO of supply chain, uh, you know, you gotta 327 - > be thinking about the investments that you need to 328 - > deliver it. 329 - > You're not necessarily an operator, you're somebody 330 - > bringing resources to a problem to deliver value. 331 - > Um, and you know, AI, technology platforms, partners in a 332 - > different way across different areas of spend that maybe you 333 - > you don't have the capability or you haven't always been great 334 - > at.

335 - > It's time to, it's time to get more aggressive on the 336 - > partnering front than uh than maybe we've been in the in the 337 - > past. 338 - > Uh and there's some men that are just leaning into it uh and they 339 - > are leading the way and they're way ahead of me and kind of 340 - > where I think. 341 - > Uh, but there's a lot in kind of the middle that are that are a 342 - > little paralyzed. 343 - > And um, you know, I don't know how how to uh how to best help 344 - > those folks because in many cases they don't have senior 345 - > leadership that wakes up every morning understanding the value 346 - > that supply chain can deliver, not only on the cost front, but 347 - > on the whole alignment and integration into the fabric of 348 - > of delivering care.

349 - > So we still have work to do there. 350 - > SPEAKER_01: Before we dive back in, you may be asking yourself, 351 - > is my supply chain future ready? 352 - > CNOT Company, we don't just optimize logistics. 353 - > We engineer smarter, leaner, and more resilient systems from end 354 - > to end, from manufacturing to retail to healthcare.

355 - > Our experts bring decades of experience in cutting-edge 356 - > strategies to transform your operations. 357 - > Visit and discover how we're shaping the future of supply 358 - > chain one solution at a time. 359 - > SPEAKER_03: Okay, Eric, so we just finished talking about 360 - > technology, and I would argue that technology's opportunities 361 - > uh are new and increasing rapidly because of AI and and 362 - > machine learning and all the other tools that are developing.

363 - > But the other two areas that you talk about addressing, which is 364 - > the uh indirect spend and capital equipment, sort of fall 365 - > under the category, in my mind's eye, of it's about time. 366 - > These opportunities have been around forever. 367 - > They've been overlooked either because no one thought about 368 - > looking at them or it was too difficult. 369 - > Uh directors of areas where those opportunities exist would 370 - > be very protective of their uh of their departments and not 371 - > want any help or any input.

372 - > Uh and so uh we just kept trying to find better prices and get 373 - > rid of people. 374 - > So tell it tell us uh what you're doing in indirect 375 - > indirect spend and also after that into the areas of capital 376 - > equipment. 377 - > SPEAKER_02: Yeah, so indirect spend has just been one Fred, 378 - > and you you hit the nail on the head, right? 379 - > It's just been it's been out there for a long time.

380 - > Uh I've written different pieces of research around it over the 381 - > years uh around how to attack purchase services, the products 382 - > that don't, the services that don't come in a box, uh right? 383 - > They're they're highly variable in um you know the service 384 - > capabilities locally for these health systems, uh, and they 385 - > don't kind of uh align super well to national contracting. 386 - > Um, you know, and then it's super amorphous, 800 different 387 - > categories.

388 - > Uh and it's rare for health systems to kind of I don't know, 389 - > level set uh the way that they approach that for the dollars 390 - > that are spent in these areas uh with sourcing resources uh and 391 - > the capabilities to listen to end users, set a specification 392 - > for a service, uh, source it, and then hold the organization 393 - > accountable. 394 - > Um so, you know, I'm a I'm an advisor for Logic Source. 395 - > Um, you know, they're a new approach to going after this 396 - > spend.

397 - > Uh, and I've just kind of watched, you know, different 398 - > consulting firms, the GPOs, some of these technology platform 399 - > firms uh that have had promise, uh, but just still, for whatever 400 - > reason, we haven't quite nailed it down. 401 - > And uh I guess I'd attribute some of it to governments, uh, 402 - > just the right to come in and you know get access to the 403 - > spend, marketing spend, benefits spend, uh legal spend, uh 404 - > facilities spend, right?

405 - > These big categories uh of dollars uh that are equal or 406 - > greater to uh what's spent in medical surgical, medical 407 - > device, and even pharmaceuticals uh you know, uh kind of 408 - > combined. 409 - > It's about equal in what's spent in these services, uh, and we've 410 - > just under-resourced for it. 411 - > So I think there's got to be a different approach, and uh, and 412 - > that's the one that I'm trying to support with Logic Source to 413 - > come in and bring outside industry uh benchmarks uh and an 414 - > approach uh using technology to uh uh and uh and resources to uh 415 - > to to attack and address that spend.

416 - > SPEAKER_03: Well, I know Logic Source has got some high-level 417 - > uh people there with some real expertise. 418 - > My question is, how do you knock on the door of an organization 419 - > and get them to crack it open and give you the opportunity to 420 - > uh to you know to talk about what you might be able to do? 421 - > SPEAKER_02: Yeah, and I'm not on the sales side. 422 - > I'm on the advisory side and uh on the, I don't know, advocating 423 - > for a solution side.

424 - > Uh but but I do think as I've watched it, it it usually comes 425 - > uh in the best case, it's led by a chief supply chain officer 426 - > that goes, look, we haven't we haven't been able to address 427 - > this uh effectively. 428 - > Uh we need more resources, uh, and it's a catalyst bringing 429 - > somebody in like Logic Source to get those resources, to approach 430 - > these areas of spend and kind of get governance. 431 - > It's the city on a hill. 432 - > I I I I liken it to the equivalent of having a CSC.

433 - > Uh CSC uh you know for medical, surgical, and devices doesn't 434 - > necessarily uh mean you're gonna be the most mature health 435 - > system, but the health system understands it across the 436 - > enterprise when you've got the big building. 437 - > Uh so making an investment with a third party uh tends to, you 438 - > know, kind of make everybody go, yep, okay, we're supporting 439 - > this. 440 - > This is an initiative that we're going to. 441 - > But ultimately, typically the CFO, COO has to buy in and say, 442 - > yep, hey, this is an area we're going to invest in uh in a 443 - > different way and and go approach it.

444 - > Um, because you've got to get governance, there's got to be 445 - > somebody that's got air cover to go, hey, these departments that 446 - > have, as you mentioned, uh have historically kind of done their 447 - > own thing, uh, been Maverick spenders. 448 - > Um, you know, we've we've Got to kind of align that under a 449 - > professional supply chain service, and uh you know, we we 450 - > can yield a benefit from it. 451 - > And the benefit's been great, uh, but you've got to have 452 - > governance uh to go after it first.

453 - > It's the it's the uh you know, get uh get helicopters in the 454 - > jail, uh in the jailbreak uh initiative. 455 - > Somebody's gotta, you know, uh has the has the tough one that 456 - > they've got to capture. 457 - > SPEAKER_03: Yeah, well, you know, with the given the fiscal 458 - > challenges that everybody faces, uh I think mo all organizations 459 - > are more willing to approach these opportunities. 460 - > And that brings us to the last one, the cap capital equipment 461 - > planning.

462 - > I've w remember the 60 years I've been in healthcare, every 463 - > year it used to be a free-for-all for the capital 464 - > budget. 465 - > And that was when most places were standalone community 466 - > hospitals. 467 - > Now you have systems with uh 10, 12, 15, 20 hospitals plus uh uh 468 - > scores of other delivery areas and you have to capitalize those 469 - > places and you have to come up with a plan. 470 - > Um how do you go about addressing that?

471 - > What what would you uh tell us tell us about the approach that 472 - > people should be looking at for managing and handling those 473 - > those uh things? 474 - > SPEAKER_02: Well, I think first it's a recognition of just what 475 - > how much of the spend it represents. 476 - > And it's not quite the equivalent of MedSurge in terms 477 - > of dollars, but it's 70% of it. 478 - > Uh you know, it's big if you think about rolling capital and 479 - > the hundreds of categories of of those uh products that are out 480 - > there, um, you know, and the fact uh that many of them have 481 - > also a utilization component of it, whereas you've bought them, 482 - > uh you've got to standardize it on it, and then you've got those 483 - > assets in different locations, and they may not be utilized uh 484 - > as efficiently as they could be.

485 - > So it's really it's it I guess it's really just a resource 486 - > allocation process and a governance process that says, 487 - > yes, supply chain should own this, yes, there's a budgeting 488 - > component of it, yes, there's a standardization across these 489 - > growing health systems that have got you know more locations, uh, 490 - > you know, and then there's an uptime uh and a life cycle to 491 - > this equipment. 492 - > So today we see it managed still predominantly on spreadsheets, 493 - > uh, you know, and sometimes with a clinical engineering 494 - > biomedical company that comes along as a partner, uh, but 495 - > still it's not necessarily tied directly to the budgeting, uh, 496 - > it's not tied directly to new construction uh and the and the 497 - > addition of facilities.

498 - > And for sure, it's not always, particularly with the MA 499 - > activity, you know, standardized across the enterprise. 500 - > So really putting resources toward it would be my first 501 - > thing, an owner uh of capital equipment as you know, seven to 502 - > ten percent of the total spend of supply chain, um, enabling 503 - > that with technology platform, uh, you know, and a partner on 504 - > the uh biomedical clinical engineering side uh that just 505 - > looks at you know everything from budgeting uh and and offer 506 - > uh to sourcing uh to product lifecycle management to 507 - > end-of-life uh process, uh, you know, to kind of uptime and 508 - > allocation of the uh of the equipment.

509 - > It's a real opportunity. 510 - > Uh, and it's also got a cybersecurity component of it. 511 - > We're watching in some cases this getting now pushed to the 512 - > the to the chief technology officer uh on the side in terms 513 - > of ownership because of um you know the cybersecurity issues 514 - > that that uh that that are exposed here. 515 - > So I think it's really a comprehensive look at the total 516 - > expense, uh the risk of the organization, uh, and just you 517 - > know how you how you best have uh that equipment in the right 518 - > place for clinicians to do their job uh efficiently and 519 - > effectively.

520 - > Uh there's partnership opportunities with the 521 - > manufacturers, there's partnership opportunities with 522 - > the biomedical companies, and there's really some growing 523 - > great technology platform companies that are the 524 - > foundation of this that uh I just think are under 525 - > underinvested in. 526 - > SPEAKER_03: Yeah, and the one commonality among all three of 527 - > the areas that you've you're focusing on uh is you have to 528 - > have strong leadership, you have to have visionary leadership, 529 - > you have to have capable leadership uh at at uh the uh at 530 - > all levels from uh from an administrative level, excuse me, 531 - > to uh to uh um contracting level to to whatever.

532 - > And uh so you got you gotta want to do it. 533 - > If you want to bring process into uh an organization, you 534 - > gotta be willing to commit to providing the correct the right 535 - > resources and the support to get it done. 536 - > Is that fair? 537 - > SPEAKER_02: It is.

538 - > And it, you know, as you point out, right? 539 - > It's a little bit like non-acute. 540 - > When we when when these health systems bought all the physician 541 - > offices, uh a lot of health systems went down the path and 542 - > said, Hey, I'm gonna take a really good uh up-and-coming 543 - > person in my organization and put them in charge of non-acute. 544 - > Uh, it's the same thing for, it should be the same thing for 545 - > capital, and it should be the same thing for indirect spend.

546 - > They're huge categories. 547 - > Uh, they deserve a leader that uh has a career path within it 548 - > uh that can uh that can grow it. 549 - > You know, the number of health systems that I talk to that are 550 - > you know three to five billion dollars that have a couple 551 - > people kind of randomly doing capital equipment and uh you 552 - > know, three or four that might be doing purchase services, 553 - > indirect spend, uh they're just really under-resourced, both 554 - > from a personnel standpoint.

555 - > And then if you hire the right leaders, that leader is gonna 556 - > say, is effectively gonna go, look, I can't do my job without 557 - > partners, without technology. 558 - > So it kind of rolls down, I think, like many things from 559 - > that leadership. 560 - > And uh, but you've got to get resources to it, uh, and we've 561 - > just under-resourced it. 562 - > SPEAKER_03: Yeah, historically that's been uh that's been a uh 563 - > symptom or uh of healthcare in general, supply chain in 564 - > particular, under-resource.

565 - > Well, Eric, excuse me. 566 - > Um thanks for joining us. 567 - > And there are two areas that we've left out that I'd like to 568 - > have a future discussion about. 569 - > Number one is the emerging supply chain leader, what what 570 - > that person needs to look like, what that person's capabilities 571 - > need to be, um what you see out there, uh who you've seen has 572 - > done things well, what you would advocate.

573 - > And and uh the second part is is what I casually call 574 - > benchmarking, but but measuring your operation to the point 575 - > where you can measure yourself so that you can see how 576 - > effective things that you've tried to implement are toward 577 - > improvements. 578 - > And this is where your expertise has been in in benchmarking, and 579 - > and I think that uh a lot of people would love to hear your 580 - > insights on that. 581 - > So would it be possible to get you back for another uh episode 582 - > sometime in the near future?

583 - > SPEAKER_02: You bet, Fred. 584 - > Uh, you know, you're a bright light. 585 - > I love I love your voice in the industry and uh appreciate you 586 - > having me on today. 587 - > And I'd love to talk about both those issues.

588 - > They're meaty and uh uh lots of things that are going on that 589 - > are great, uh, but also you know, areas for for development 590 - > as well. 591 - > SPEAKER_03: Okay, well, Eric, thank you so much for joining 592 - > us. 593 - > And I I appreciate, I know that we've had a couple stumbles here 594 - > with technology ourselves as we've been trying to do this 595 - > podcast, and I appreciate you for hanging in there and uh hope 596 - > to talk to you again soon in the future.

597 - > SPEAKER_02: Thanks, Fred. 598 - > Be good. 599 - > SPEAKER_03: Take care. 600 - > SPEAKER_01: Well, that's all for today.

601 - > Thanks so much for joining us. 602 - > And don't forget to hit that subscribe button and connect 603 - > with us online so you'll never miss an episode and can catch up 604 - > on all the ones you might have missed. 605 - > Got a topic you're fired up about, or maybe you want to be a 606 - > guest on the show? 607 - > Fred would love to hear from you.

608 - > Just reach out at f c r n s at s tonge.com. 609 - > We'll see you next time.