At Intermountain Healthcare, Brent Johnson oversees a remarkably wide range of activities--everything from warehousing and transportation to sustainability and laundry services. Bringing all that and more under the supply chain umbrella, he says, leads to better service at lower cost.
Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Editor at CSCMP's Supply Chain Quarterly. and Senior Editor of SCQ's sister publication, DC VELOCITY. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
As his title suggests, Brent T. Johnson, Intermountain Healthcare's vice president supply chain & support services and chief purchasing officer, oversees some areas that don't normally fall under a supply chain professional's purview. In addition to managing the company's US $1.5 billion nonlabor spend, he's responsible for a number of other functions that are pivotal to the Utah-based health-care provider's success, such as laundry and linen services, sustainability, environmental services, clinical engineering, food and nutrition, information technology asset management, and printing.
Intermountain Healthcare's senior leadership views supply chain management as strategically important for the company, and it has supported major investments in labor and facility resources that bring added value, Johnson says. In 2012, the company demonstrated its commitment to supply chain excellence by opening the US $40 million Intermountain Kem C. Gardner Supply Chain Center, a 327,000-square-foot distribution, warehouse, and office complex near Salt Lake City, Utah, that employs more than 350 people. The facility, which has qualified for Gold LEED (Leadership in Energy and Environmental Design) certification, stocks and distributes more than 2.5 million medical items annually. The center also brings together under a single roof some of the programs and services that previously had been scattered across Intermountain's system. By so doing, the company has centralized the control of purchasing, warehousing, transportation, distribution, and other traditional supply chain functions.
To Johnson's mind there's good reason to bring all that and more under the supply chain umbrella. The nonprofit's supply chain organization, he believes, has the expertise and problem-solving skills to improve many of the processes and activities that support Intermountain Healthcare's network of hospitals, clinics, pharmacies, a health plans division, and other health services. The more efficiently and cost-effectively they are managed, the better the outcome for patient and provider alike, he says.
In this interview, Johnson—who came to the health care field from the electric utility industry—tells Managing Editor Toby Gooley how this inclusive approach and best practices he's adopting from other industries will help the company reduce the cost of providing health services while maintaining its high standard of care.
Name: Brent T. Johnson Title: Vice President Supply Chain & Support Services Organization: Intermountain Healthcare Education: Bachelor of Arts in Finance, Weber State University; Master of Business Administration, University of Utah Business Experience: Director Supply Chain at PacifiCorp; Senior Supply Chain Consultant, Denali Consulting; Director Supply Chain at ARUP Laboratories
Whom does the new supply chain center serve?
It was built to serve one company: Intermountain Healthcare. We're the largest company in Utah, with 33,000 employees, 22 hospitals, 185 clinics, and 26 retail pharmacies, plus a health plan. The distribution center will support all operations for all of the hospitals, the clinics, and our home-care service.
What functional areas does the supply chain center handle, and what makes that unusual?
The whole campus totals about 327,000 square feet of building space, but only 160,000 of that is the distribution center. The administrative building is 60,000 square feet, and there's a 40,000-square-foot materials management and logistics wing. We also have a 60,000-square-foot ancillary services building.
There are other, similarly large DCs in the health-care industry, but few are built adjacent to or combined with supply chain management functions the way ours is. Everything that's involved in managing our supply chain is in this one center: purchasing, accounts payable, sourcing, analytics, information systems, logistics—including our courier department, which has 140 people and 80 vehicles—distribution, and warehousing. We have a call center for supply chain functions and a medical-surgical recall management center. Sustainability also reports to supply chain.
We also put waste stream management, publishing services, and linen services under the supply chain function. For example, we have a central laundry that reports to me, and linen services is co-located in the same facility so that we are now cross-docking linens to hospitals. That's unique in health care, where they typically don't manage these types of activities as rigorously as other aspects of the business. Generally if health-care providers have extra money, they spend it on clinical care. They don't realize that having poor technology and processes does impact clinical care.
We evaluated 12 to 15 other programs [for possible location at the supply chain campus]. We selected whichever ones had the best business case. Some we own, and some are outsourced but we control them.
You expect savings of about $200 million over the first five years the supply chain center is in operation. Where will those savings come from?
The savings will come from a number of areas, starting with managing the contracts for and distribution of our basic medical and surgical products. This includes over 200 contracts with 7,000 products. Some of the savings will come from lower pricing. More will come from efficiencies—fewer touches—and even more will come from increased service levels that will impact patient care and remove the supply burden from the nurses. Also, from one distribution center, we intend to reduce by one-third the 15,000 road miles we put on to deliver products and equipment to our facilities. We will cross-dock many other products from other supply chains that make sense—clinical, pharmaceutical, lab, IT, linen, food, MRO [maintenance, repair, and operations], etc.
But we expect four other areas, from our ancillary services that are co-located at the supply chain center, to generate more value and savings. The first is pharmacy services. We installed a 20,000-square-foot pharmaceutical fulfillment center and invested in $8 to $10 million of robotic equipment. We buy pharmaceuticals in bulk and use the robots to break them down and prepackage orders. That way every hospital doesn't have to buy in bulk, which means that they don't have to buy more than they need. This system helps us manage expiration dates, too. We expect to reduce pharmaceuticals inventory for hospitals and our 26 retail pharmacies, many of them in our clinics, by 40 percent. We have a pharmacy call center on site, and we can take advantage of the warehouse and courier services being located together on the same campus.
Number two is printing. Before, printing was being done all over the place. Now we print 800 million pieces a year coordinated from this one location for the whole company. The supply chain function manages it, and we see lots of opportunities to reduce costs.
Third is IT asset management. We have centralized the storage and shipping of equipment, and we use our own couriers to deliver things like laptops, printers, and copiers. We ship out about 1,200 devices a month. All of the used assets come back here for asset recovery.
And fourth is our ancillary imaging equipment service program. We have 2,000 or so imaging devices in our system. Rather than outsource that, we started hiring our own technicians and are managing it ourselves. They have their own call center and space for sourcing, repair, and storage here on the supply chain campus.
We are also saving a lot of money in procurement. We have the most robust purchasing card system in health care. By implementing about 5,000 "p-cards" we removed 250,000 transactions worth $70 million a year from our system, including travel, fleet management, and asset recovery, among others.
In what other ways is Intermountain's supply chain strategy different than most in the health care industry?
We have implemented Low Unit of Measure (LUM) technology in our medical-surgical distribution operations, where we bypass our own warehouses at the hospitals and deliver standardized products in LUM totes every night to every nursing floor and clinic. To do this we have installed high-end technology conveyor systems and voice-directed picking to maximize efficiency and improve quality.
Another key to success was standardizing products across the system's 22 hospitals. This took extensive efforts working with nursing product committees. When you have to pay for the touch and inventory of every item, it becomes very important to you. Often these costs are hidden behind distributors and other supply chain partners.
Any other changes in the works?
If you look at all the operations that make up Intermountain, you will see that there are a lot of supply chains. Medical and surgical supplies are only one aspect. We also have food and nutrition, IT, clinical engineering, and others. They all have their own supply chains, and they have their own way of getting supplies and materials in and out. We've gotten very good at managing medical supplies, which represents the largest volume. Now we're looking at those other supply chains to see what value we can add by handling them.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”