Success Stories

With more than 14 facilities and 20,000 employees spread across multiple states, Bon Secours Health System has its hands full. The $2.7 billion not-for-profit Catholic health system knew that its supply chain expenses could very quickly get out of hand with so many moving parts in numerous locations.

In 2002, Bon Secours decided to begin tracking its expenses in an effort to streamline the health system and cut down on costs, while still maintaining its standard of excellence when it comes to patient care.

The nonprofit implemented an ongoing review of its supply chain process and invested in a new enterprise resource planning (ERP) system designed to have tighter controls around supply purchases. While these new measures helped identify some cost savings, senior management soon realized they would need a partner that specializes in system-wide savings initiatives.

Bon Secours implemented its ERP system to set the foundation for a more integrated supply chain. While the new system offered a highly refined purchase order process, it couldn’t control Bon Secours’ purchased service expenses. And it was in those expenses that Bon Secours was finding a lot of its inefficiencies.

A lack of formal contracts and a lack of clear data around services and vendors meant Bon Secours was spending more money than it needed to on purchased services.

This problem prompted Bon Secours to hire a firm that could help identify and implement cost-cutting strategies.

After issuing a request for proposals, Bon Secours ended up choosing what they thought was an unlikely partner. Thinking of Owens & Minor solely as a distribution partner, they were surprised to learn the services arm, OMSolutions, could offer a comprehensive supply chain strategy with a major emphasis on purchased services savings.

Owens & Minor quickly found some startling—but fixable—holes in the Bon Secours supply chain. More than 40 percent of the purchased services didn’t have a formal contract, and more than 140 people across the system were managing purchased services. Based on that alone, OMSolutions pinpointed savings of 3 to 5 percent, or between $4 and $7 million, in purchased services.

Owens & Minor also found savings opportunities in other areas, such as travel expenses, imaging and image acquisition services, and even laundry.

• By streamlining vendors and formalizing contracts, OMSolutions implemented $9.9 million in total purchased service spending—well above the initial 3 to 5 percent savings estimate.
• After analyzing the travel patterns of all relevant employees, OMSolutions negotiated a maintenance and repair program, along with a volume fuel discount, for company cars, that resulted in a $200,000 savings against a $1 million spend.
  Image and image acquisition contracts were restructured for a savings of more than $800,000.
• Hundreds of other contracts were modified to produce more savings—and nearly all vendors were pleased with the new, more formal contracts.
• By implementing WISDOM Gold—a cutting-edge tool designed to track purchases at healthcare facilities—Bon Secours and Owens & Minor maximized savings and created even more efficiencies across all 14 locations.