2013 SURE AWARDS
CUMMINGS: After wages and benefi ts, sup- ply costs typically comprise the largest com- ponent of most hospital’s annual operating budget, including that of Lawrence + Memo- rial. Because a reduction in supply costs falls directly to the bottom line — whereas it takes proportionately more effort in top line growth to achieve the same fi nancial impact — I have a keen interest in the effi cacy of our supply chain management. CHRISTMAN: It is a critical aspect in caring for patients. Supply chain impacts patient safety, cost and effi ciency. LOVERN on STACK: Tim saw effective supply chain management as a way to make sure that clinicians always had what they needed, but costs were effectively controlled so that more money could go to improving patient care.
How hands-on should a CEO be in a supply chain that should be under the control of a supply chain management director/execu- tive/leader? CUMMINGS: It depends. I did away with the position of COO in my organization early in my tenure here. Instead of a single COO, I have distributed the various operating re- sponsibilities to four Vice Presidents, one of whom, Lou Inzana, the Vice President/Chief Financial and Support Services Offi cer, is the executive to whom the Director of Materials Management reports. Lou has been incredibly involved with and supportive of our supply chain staff. But importantly, all four of the VPs with hospital-wide operating responsi- bilities are interested in, participate with, and are committed to optimizing supply chain management. This particular formulation — in essence, selecting four high performing ‘hands-on’ VPs who are charged by me with the same set of institution-wide goals — has worked well for me and my hospital. CHRISTMAN: I am not hands-on. I am in- volved in global questions and directions and I support or work to remove barriers for the Supply Chain Director to do her job.
How can/does a supply chain manager/ director/executive/leader infl uence you? CUMMINGS: Our supply chain leader, Mike Passarelli, is highly regarded by both senior management and by our other directors and managers. What impresses me is not only that Mike realizes year-over-year improvements, it’s how he has been able to involve the entire organization to achieve those results. CHRISTMAN: They challenge me in how we can change and improve. LOVERN: Tim saw the Vice President, Sup- ply Chain, at Piedmont as a key extension of his ability to affect the operations of the organization. He knew that the executive in this role had to achieve challenging operating
metrics while maintaining good relationships with clinicians.
What are some of the attributes/character- istics of an effective supply chain director/ executive/leader?
CUMMINGS: Peter Drucker, the father of modern management theory and practice, once wrote, ‘Good management is doing things right. Good leadership is about doing the right things.’ The most effective supply chain leaders — for that matter, the best
Bruce Cummings, CEO, Lawrence + Memorial Hospital, New London, CT
Mike Passarelli, Director, Materials Management
CUMMINGS UNPLUGGED
Unlikely source of inspirat ion: Bad bosses I or others close to me have had. Those painful experiences made
me appreciate anew the wisdom of the Golden Rule as well as the Reverse Golden Rule: I try not to do to others some of the things that were done to me. Most creative thing you’ve ever done: Co- parenting two creative children with my wife, Ellen. What makes you laugh: Scott Adams’ ‘Dil- bert’ and/or Gary Larson’s ‘The Far Side.’ I don’t think I’ve ever seen a strip from either cartoonist that didn’t have me in stitches. Must-have accessory: Chamois shirts. It’s my favorite thing to wear when I am relax- ing at home. Surprising background fact: I do a lot of presentations, both formal and informal, in front of groups both large and small. Despite being in front of audiences quite frequently, I am very much an introvert. Favorite thing to do on a day of f: Going bike riding with my wife on our recumbent tandem bicycle. Favorite object you keep in your offi ce: Pictures of my family. The pictures remind me about what really matters. What you would tell yourself if you traveled back in time to when you just started in healthcare: Be wary of defi nitive predictions about the future of healthcare and your role within it. As John Lennon said, ‘Life is what happens when you are busy making other plans.’
12 January 2013 • HEALTHCARE PURCHASING NEWS •
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leaders of any kind — possess both sound management and leadership skills. They do things right but they also do the right things; they are attentive to detail but they also see the big picture; they understand numbers but they have good interpersonal skills as well. As Oscar Wilde observed, ‘a cynic is someone who knows the price of everything and the value of nothing.’ An effective supply chain leader knows that price matters but that value matters more. CHRISTMAN: Thorough, prompt, ability to lead, personable, innovative, works well in a team and relates well with other profession- als, attention to detail. LOVERN: Tim expected the Vice President, Supply Chain, to be an outstanding rela- tionship builder, an innovative thinker and strong operator who could lead his staff to accomplish organizational objectives.
What would you say to a CEO of an organiza- tion that outsources many of supply chain management’s functions to third parties, such as consulting fi rms, distributors and GPOs? CUMMINGS: I’ve learned not to traffi c in dispensing overly prescriptive management advice or nostrums so I would be loathe to say ‘always do’ or ‘never do’ something, including the use of third parties. However, my experience with consulting fi rms and distributors in this space is that while they can play a useful role in identifying possibilities or missed opportunities, especially around pricing, actually realizing fundamental increases in value generally requires substan- tial, sustained, ongoing relationship manage- ment. It’s harder to achieve such relationships when the parties are separate and unrelated and/or interact on an episodic basis. The lowest priced item may not be the best value if it requires more of them to be used, or to be replaced or repaired with greater frequency, or if there are issues with reliability or avail- ability than a more expensive item. Price and utilization are just two parts of the value equation. One also has to look at outcomes, whether it’s in terms of clinical results, length of stay, safety or customer (employee, physi- cian, patient) satisfaction. It’s hard to imagine an outside party, no matter how experienced, can develop and sustain the key relationships, both internal and external that produce real value. CHRISTMAN: Each organization develops how to effectively manage their supply chain. Our director is excellent in this area and gives thought on how to best utilize outside services to benefi t our organization. Leader- ship of the process is key. LOVERN: Tim thought that ultimately each CEO needed to make whatever decision was
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