Advantages of a Supplier Diversity Program - goeshow.com · operated and controlled by a qualifying group identified above ... business expansion with the emergence of new consumer

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Knowledge Wisdom Innovation

American Leadership Council for Diversity in Healthcare A subsidiary of the Institute for Diversity in Health Management An AHA Affiliate

Kevin J. Price, MBA, MHA

Director, Supplier Diversity & Performance Analytics

Novant Health

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Advantages of a Supplier

Diversity Program

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Agenda

Novant Health Overview & Supplier Diversity Progress

Evolution of Supplier Diversity

Today’s Definition of Supplier Diversity

Advantages of Supplier Diversity The Business Proposition

Return on Investment

Areas of Concentration

Triple Aim

Q & A

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.

Not-for-profit, IDN

Winston-Salem based

Since 1997

$4.3 billion in revenue

13 hospitals

3.5 million+ patients

3,000+ beds

25,000+ employees

500+ PPOs

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NH Supplier Diversity Progress

• Established as the HUB program in 2006

• Part of Corporate Diversity Council’s Strategic Plan

• Attached to Strategic Sourcing

• Initially focused on low-hanging fruit

• Baseline was $18 million in spend from 2005

• Significant amount of spend was construction

• Launched Tier 2 reporting in 2010

• Renamed Supplier Diversity & Performance in 2011

• Realigned with Office of Diversity in 2012

• Realigned with Supply Chain & D&I in 2015

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Agenda







Triple Aim

Q & A

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The Evolution of Supplier Diversity

1950s – Set the Stage SBA was created in 1953

Small Business Act 1958

1960s – Era of Legislation “Sex” in Civil Rights Act of 1964

“Good Faith” efforts

OMBE established

1970s – “Right Thing to Do” Goals in federal contracts, NMSDC

OMBE becomes MBDA

1980s – Compliance MBE plans of gov’t agencies, USAACC

1990s Value Proposition Global initiatives, WBENC

2000s Awards and Recognition Recognition of Strategic Importance,

NGLCC

2010s Focus on ROI Quantifying the value proposition 6

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Challenges Remain

Some have supplier diversity programs, but most don’t

A few have supplier diversity mandates, but most don’t

Most hospitals are local or regional, at best

• Rapid shift to super regional over the next ten years

• Simultaneously – move towards shared services

Some hospitals have centralized purchasing, many don’t

• Many may have sophisticated, automated purchasing…

Supplier diversity is not on the radar screen for most

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Agenda







Triple Aim

Q & A

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Supplier Diversity is a proactive business strategy which

encourages the use of diverse suppliers in the everyday

procurement process of goods and services

Competitive bids (RFI, RFQ, RFP)

Reverse Auctions

Negotiated contracts

Measurable

Accountability

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Today’s Definition of Supplier Diversity (cont.)

~ 16 categories used to identify diverse suppliers. Common are:

(Ethnic) Minority Business Enterprise (MBE)

o African-American, Native American/American Indian,

Asian/Pacific Island, Latino/Hispanic

Woman Business Enterprise (WBE)

Veteran-Owned Small Business (VOSB)

Lesbian, Gay, Bi-Sexual, Trans-Sexual Owned (LGBT)

Disabled Owned Business (DOB)

Historically Underutilized Business (HUB Zone)

Small Businesses (as defined by the SBA)

Important - Companies should be certified - At least 51% owned,

operated and controlled by a qualifying group identified above

NMSDC, WBENC, State and local governments

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Agenda







Triple Aim

Q & A

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Advantages of Supplier Diversity Drives competition (price/savings and SLAs) between incumbent

and potential suppliers

Encourages innovation via new product/services introduction and

solutions

Expands product and/or services availability

Allows a company to take advantage of new opportunities for

business expansion with the emergence of new consumer needs

based upon shifting demographics

Demonstrates a corporate commitment to D&I

Showcases corporate interest in and commitment to the

economic growth/reinvestment of communities served

Return on Investment (ROI) 12

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WHAT

Supplier Diversity Advantage Business Proposition

HOW

Community Impact (Stronger communities)

Jobs Ability to pay for care

Impacted/Reduced indigent care spend

WHY

Demographic shifts by 2050

30+% of patients and corresponding revenue comes from

minorities in US healthcare

Less than one tenth of one percent (0.1%) is spent with minority

owned firms (incl. manuf. and dist.) 13

Advantages of Supplier Diversity (cont.)

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Return On Investment =

Gain from Investment – Investment Cost

Investment Cost

Cost Savings

Revenue Enhancement

Cost Avoidance

Creativity

Innovation

Supplier Diversity Contributes A ROI

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HCAC & Healthcare Opportunities

06/11/2013

2. ROI = Gain from Investment X Contrib. Factor – Investment Cost X Contrib. Factor

Investment Cost X Contrib. Factor

3. ROI = Savings X SD Contribution – SD Budget (SD CF)

SD Budget (SD CF)

4. ROI = 3,600,000(3%) – 1,200,00(3%)

1,200,000 (3%)

5. ROI = 108,000 – 36,000

36,000

72,000

36,000

ROI = 200%

1. ROI = Gain from Investment – Investment Cost

Investment Cost

Measuring SD ROI (over 5 years)

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ROI Impact

Spend Goals (internal & customer)

2nd Tier reporting

Marquis project Conversion(s) Internal supplier database registration and usage

Savings Community Outreach

Revenue Internal SD training

Diverse supplier executive training

Employment (Jobs) growth

External SD recognition/awards

Sponsorships

Wage & Salary growth

RFP/Procurement participation

RGMA evaluation

Key Performance Indicators (measuring KPIs)

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RE/Const.

•Environmental

•Architect

•GC

• Interior Design

•Utilities

•Facilities Maintenance

Finance

•Banking

•Accounting

• Investment Banking

•Securities

• Insurance

IT

•EMR - EPIC

• Informatics

•Point of Care

•Web

•Coding

•Security

•Cloud

Supplies & Services

•Med/Surg.

•Products

•Legal

•Marketing

•HR/Staffing

•Language Svcs.

•Food Svcs.


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QUESTIONS?

Kevin J. Price, MBA, MHA Director, Supplier Diversity & Performance Analytics 1918 Randolph Road Charlotte, North Carolina 28207 704-384-3543 www.novanthealth.org/supplierdiversity [email protected]

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Documents

Advantages of a Supplier Diversity Program - goeshow.com · operated and controlled by a qualifying group identified above ... business expansion with the emergence of new consumer