APQC recently interviewed Scott Alexander, vice president of innovation at ROi (Resource Optimization & Innovation). ROi is a provider-owned integrated supply chain organization serving both its founder, Mercy Health System, an integrated delivery network of 46 acute and specialty hospitals across Arkansas, Kansas, Missouri and Oklahoma, and health care organizations throughout the U.S. who share a passion for supply chain excellence.
In the following question and answer session, Alexander discusses how ROi has used innovation to re-imagine the supply chain and develop solutions to drive greater efficiencies, reduce costs, and produce sustainable change.
Scott Alexander will be a Key Note presenter at TCU’s 2015 Innovation in the Supply Chain Conference June 3-June 5. Attend the event to learn more about how ROi transformed its founder Mercy Health System’s supply chain operations from a cost center into a successful new business model.
How does your organization align innovation objectives with organizational objectives?
Our organization was built on the concept of being innovative. If we rewind and look at the history of how ROi came to be, Mercy Health System was essentially a holding company. We had a number of hospitals in four states (Arkansas, Kansas, Missouri, and Oklahoma) and they all operated independently. Each hospital had its own supply chain organization, and it was deemed that this was not the most effective way to go about managing a supply chain for a hospital setting. So all that information was brought together and centralized, in 2002, through the work of three Mercy supply chain leaders who became the founders of ROi; their strategic approach to supply chain was innovative for its time in health care. ROi’s founders realized there was opportunity to improve how supply chains are run in health care. ROi was born out of a cultural need for integration and was charged with building a supply chain model through industry expertise and hospital knowledge, and improving the way Mercy managed its resources – specifically, how it purchased, distributed and used supplies and equipment, and how it managed associated work processes. Literally ROi stands for: resource, optimization, and innovation; innovation is within our DNA. It is our goal as an organization to join together with other health care providers to be innovative and push the envelope in what health care supply chain is, and the positive impact it can have on health care in the future. This is all done in the name of increased efficiency and effectiveness in the delivery of health care and driving significant clinical, operational and financial results.
What are your organization’s top three challenges regarding innovation in the supply chain?
The first challenge is prioritizing what we are going to tackle. There is so much change going on in the industry. It seems like there are new rules and regulations every day and there are many places where we can focus our attention. So we have to be disciplined in identifying where we are going to go and what we are going to focus our efforts on, as well as what’s going to be most effective for our organization.
The second challenge is managing the throughput of innovation. Ideally, we develop a process that is predictable, consistent, and in line with what a customer of supply chain can adopt. When I talk about customers, I am talking about clinicians and other parts of the health system. You can only innovate as quickly as your customers can adopt. For us it is about how we can make that predictable and consistent so we can continuously improve the delivery of health care.
The third and final challenge may be more specific to what ROi and the health care systems we serve are looking to accomplish. We need to make innovation accessible across the industry. There is not a lot of consistency in how hospitals are run. What’s done in “Hospital A” may be done in a completely different fashion than in “Hospital B.” If we really want to improve where health care is in the United States, it is going to require developing solutions that allow “Hospital A” all the way to “Hospital Z” to adopt in a way that helps them improve their process efficiency.
These are things we keep in the front of our minds as we look at how we continue to be an innovator in the health care space.
When did ROi begin its journey toward helping health care organizations innovate within their supply chains?
It started in 2002 when ROi came to be. It was really in 2011 that we began to partner with health care providers beyond our founder Mercy and offer supply chain services. That started with our strategic contracting and sourcing, and spread to other offerings as well. Today, we serve providers across the country that look to ROi to deliver services, and there are large opportunities to improve the efficiency and effectiveness of health care systems across the country. We are fairly early in that process, and it is definitely a journey that we will be on for a long time with our fellow providers.
