PROGNOSIS FOR A HEALTHY SUPPLY CHAIN AT UPMCUPMC is an integrated global health enterprise and one of the leading nonprofithealth systems in the United States. Through redefined models of health care delivery,technological innovation, and cutting-edge medical research, UPMC is improving livesin western Pennsylvania and beyond. UPMC global operations include 20 hospitals,4,000 physicians with over 50,000 employees delivering state-of-the-art patientcare in the United States, Europe & Asia.

UPMC is a $7B IDN with $1.7B in annual spendwith over 12,000 active suppliers.

ProdigoMarketplace™ Case Study

“In all my years in Supply Chain,I don’t know of any other technologythat has had this kind of impacton driving savings.”

Jim SzilagyChief Supply Chain OfficerUPMC The “Vitals” of UPMC’s Supply Chain Transformation

• 50% Increase in Contract Compliance

• 80% Spend Managed by eProcurement

• 40% Reduction in Time Spent on Item Master Management

• Almost half of 340,000 Orders “Touchless”

• Reduced Internal Catalog Support 40%

• Users Spend 1/3 Less Time to Shop/Order

THE SOLUTIONThe Supply Chain team at UPMC, led by Chief Supply Chain OfficerJim Szilagy, newly arrived from Alcoa, quickly diagnosed the conditionand implemented the prescribed treatment. Their accumulated experi-ence and best practice benchmarking indicated that getting their7,000 users to embrace and adopt the eProcurement system wasthe key to a healthier Supply Chain at UPMC.

In order to improve the user experience with the system, UPMCfocused on content. Users balked at complying with the current system.The process in which clinicians or other users were limited to searchingstatic local catalogs that lacked rich product detail (such as images orproduct specifications) or “punching out” one by one to search supplierwebsites - each had a different and unfamiliar navigation and userinterface. This process was inefficient and created frustration andconfusion. Not to mention significant catalog management supportwas required for internal Supply Chain and IT resources.

UPMC’s vision was to create a Marketplace which would afford usersa single user interface to connect to supplier hosted and maintainedweb catalogs. This provided a consumer-like, Amazon.com typesearch and shopping experience - all within the parameters of a con-trolled environment to enforce UPMC’s business rules and drive compli-ance with negotiated corporate agreements.

Copyright© 2009 - Prodigo Solutions, LLC. All rights reserved. Prodigosolutions.comProdigo Solutions is a subsidiary of UPMC’s International & Commercial Services Division (visit upmc.com)

THE CHALLENGEIn examining UPMC’s own Supply Chainsystems a couple years ago, the $7B IDNwith $1.7B in annual spend and over12,000 active suppliers, found a patient inneed of acute care. Despite a significantERP investment, UPMC was struggling togain adoption for its eProcurement plat-form. They found that only 20% of the4,000 purchase requisitions processedeach week were “on-contract” or compliantorders through the eProcurement system -meaning 80% of purchases constituted“maverick buys,” most from specialrequests that required extensive manualeffort by Supply Chain personnel.

We’ve really supercharged our

eProcurement operation. This

is a prime example of applying

best practices from the Fortune 500

to the healthcare supply chain.”

Michael DeLuca

Director, Supply Chain Systems

and Consulting Services

UPMC

ProdigoMarketplace enables you

to gain connectivity, visibility and control

over your complex base of supplier content.

Copyright© 2009 - Prodigo Solutions, LLC. All rights reserved.Prodigosolutions.com Prodigo Solutions is a subsidiary of UPMC’sInternational & Commercial Services Division (visit upmc.com)

IMPLEMENTATIONThe team at UPMC moved quickly to implement their strategyto maximize their use of supplier-managed web catalogs,allowing their suppliers to leverage existing eCommerceinvestments, by deploying Prodigo Solutions “Intelligent Agent”technology to execute cross-catalog searches of all suppliersites, as well as internal catalogs such as their Item Master ofinventoried hospital supplies or a site for the in-house cateringservice, all from the single Marketplace user interface.

“The ProdigoMarketplace allowed us to eliminate a largepercentage of ‘special requests,’ by requiring users to firstsearch the marketplace to find what they needed,” saysMichael DeLuca, Director of Supply Chain Systems andConsulting Services at UPMC. “We found they were ableto find what they wanted, compare product attributes,and fill the shopping cart, all in about one-third less timethan it used to take to complete an order. That positiveshopping experience is what brought users back timeafter time,” adds DeLuca.

THE RESULTThe ProdigoMarketplace solution was up and runningin a matter of a few weeks, key to the positive outcomefor UPMC’s Supply Chain because as DeLuca says,“if there is any delay in implementing supplier contractsthat take 6-8 months to negotiate, value is eroded andsavings are lost.” UPMC has experienced significantsavings from the ProdigoMarketplace initiative, recentlyvoted the top “Summit of Excellence” award winnerat the annual IDN Summit & Expo by a panel oftheir peers.

The dramatic Supply Chain transformation at UPMCis achievable by organizations of any size because theProdigoMarketplace technology was “up and runningin weeks at a relatively low cost,” stresses Szilagy.“In all my years in Supply Chain I don’t know of anyother technology that has had this kind of impact,” headds.

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