Partner Strategies

Finding the right supply chain partners

Strategies

  • Leverage large vendor contracts to encourage inclusive, local hiring
  • Collaborate with other anchors around shared demand

Leverage large vendor contracts to encourage inclusive, local hiring

Similar to leveraging the procurement power of large vendors, it is also important to recognize the impact of the vendor’s hiring practices as well. Steve Standley, the chief administrative officer at University Hospitals in Cleveland, Ohio, described a shift in how his health system viewed and communicated with vendors, telling existing vendors: “We really want a different kind of relationship with you. We want a true vendor partnership…We want you to create jobs in our community. We’re going to commit to you long-term if you do that…We want to focus on training residents who are socioeconomically underprivileged in our service space.”1Steve Standley, interview by Ted Howard, October, 2016.

To achieve this, UH added local-hire provisions to contracts; and, with vendors they have had long-term contracts with, like Owens & Minor, they requested that, in addition, the company expand their facilities in Cleveland to create local jobs.2Steve Standley, interview by Ted Howard, October, 2016. Johns Hopkins has taken a similar approach in their HopkinsLocal initiative, which coordinates their local procurement and hiring efforts. “We know we can’t hire everybody…we need partners to help us with that. That takes us to a conversation about how our vendors, the people we spend our money with, can help us with these kinds of initiative,” explained Grant.3Ken Grant, interview by David Zuckerman and Katie Parker, Baltimore, MD, February 5, 2016.

Collaborate with other anchors around shared demand

Another strategy to scale local procurement efforts is to partner with other anchor institutions. Aggregating the demand of multiple institutions can help address a lack of sufficient demand. For a vendor to expand, or a business incubation project to get off the ground locally, multiple institutions must be lined up to work with the entity, to help justify the required investment. Identifying areas of shared demand can help channel contracting opportunities to local, diverse vendors, allowing them to scale and diversify their customer base.

Aggregating the demand of multiple institutions can help address a lack of sufficient demand.

An example of this approach can be found in the Cincinnati Health Collaborative, a group of hospitals based in Cincinnati, Ohio that focus on supplier diversity. The Collaborative is facilitated by a consultant, Howard Elliott, who solicits input from hospitals on their supply chain needs. They then coordinate to support businesses in areas of shared demand. For example, Elliott identified a minority-owned company that had the capacity to supply all the healthcare systems with courier services. At the time, all the hospitals were negotiating separately as individual customers with differing rates. They came together as a Collaborative to negotiate as a group—becoming a local GPO of sorts. This approach led to cost savings for the hospitals and increased sales volume for the courier.

Other opportunities for shared services include laundry, sterilization, medical supply distribution, and facilities maintenance. Chicago Anchors for a Strong Economy (CASE), profiled in the Case Study section of this toolkit, provides yet another example of this approach. Another role the Collaborative plays is to compile aggregate data on members’ local spending, which encourages collaboration rather than competition.

Critical Strategies

Core elements of building local capacity

  • Leverage the expertise and purchasing power of existing vendors
  • Promote business incubation and expansion
  • Provide technical assistance and training

Program design strategies

Best practices for growing your supply chain

  • Support inclusive business structures
  • Promote investments in infrastructure
  • Provide in-kind support, including space, expertise, and access to information
  • ...

References   [ + ]

1, 2. Steve Standley, interview by Ted Howard, October, 2016.
3. Ken Grant, interview by David Zuckerman and Katie Parker, Baltimore, MD, February 5, 2016.