Learn More from Our Experts
Owens & Minor's leadership team represents a wide range of expertise in healthcare services, supply chain management, logistics, and transportation. In interviews and opinion pieces, our experts share their wisdom.
Geoff Marlatt: Manufacturers Have Much to Gain from O&M
Over my many years in the healthcare industry, I have witnessed widespread changes in how patients access healthcare, how providers deliver services, and how manufacturers move their products to market. This evolving landscape is causing all of us in healthcare to adapt. With production and manufacturing now centered in Asia and Latin America, the cost of production has fallen, but the cost to connect these products to the patient has risen.Read more
That's where Owens & Minor comes in. O&M has long provided logistics services to hospitals that go beyond the loading dock and onto the patient floors to serve providers' complex supply chain needs. In recent years, as pricing pressures began to rise and as hospitals began to look for ways to trim costs, the C-suite has turned the spotlight on logistics. These providers, and the manufacturers who serve them, concluded that there had to be a better way. That's where O&M steps in.
We have evolved our offering to provide fully integrated 3PL support to manufacturers serving the healthcare provider community. At O&M, our leadership team made the strategic decision to invest in our infrastructure, network, and information technology systems. In both the U.S. and Europe, we are fully equipped to accommodate the logistics needs of healthcare products manufacturers.
Owens & Minor is bigger than you probably think. With a domestic logistics network capable of reaching more than 90 percent of the U.S. hospital market, the manufacturers who partner with us can leverage our distinct market share advantage and deep channel access. With the addition of a comprehensive network in Europe, our logistics centers and private fleet cover more than 20 countries. Some our manufacturer customers are already using our platforms in both the U.S. and in Europe.
With the investments we have made in our network, we can handle products that are owned by a provider or a manufacturer through a traditional buy-sell distribution model or on a fee-for-service basis. This means that we have unmatched flexibility in the market. We can also scale our solutions to target a specific need or serve a specific geographic region. If a manufacturer wants logistics services in a certain region—say the West Coast of the U.S.—we can accommodate them. If a manufacturer wants help with only a certain product line, we can help.
We know that what really counts for our customers is the bottom line, and we know that the right logistics partner can help manufacturers lower cost while also improving service and margins. Owens & Minor is that partner. Delivery consolidation, pricing accuracy, optimized inventory placement, and visibility into the supply chain are what we do best. O&M is the partner that can enable healthcare manufacturers to deliver on their promises to providers and patients in the healthcare system.Read less
Steve Olive: Sequencing is Everything
With new leadership, new markets, and a new strategic direction, Owens & Minor is transforming itself to serve the needs and demands of a changing global healthcare market. Over the course of my career, I have had the privilege of participating in other enterprise-wide transformations like this with other companies. In my experience, successful transformation does not depend on how much you achieve in a given time period, but in the sequence of how you accomplish it.Read more
A transformation like this often involves replacing old technology and processes and, in our case, scaling it across a global network. How you do that without disrupting the business? Obviously, you can't shut the business down for a year, so there is a delicate sequence as to how you make a transformation of this type and magnitude. I have learned that it is more important to do the correct steps in the right order, than it is to change everything at once.
The first thing the information technology team did was to embrace our new strategy, which is designed to position our company for the future. Maintaining stability, while simultaneously developing our ability to leverage our international resources, is an important element of our strategy. We are aligning our Information Technology strategy with the enablement of the overall business strategy, then prioritizing how we get there.
Some of the questions we are asking ourselves are: “What does the warehouse capability of the future look like? What do you do to modernize warehouse capability?” We may need to move to a different warehouse management software solution, but we have to look at the enterprise resource planning background, financial consolidations, and other factors. There's a progression. We're not going to try to do everything at once.
What comes with being a successful global company is having common processes. Global companies have a very standard, harmonious operation that is enabled by a global platform. In essence, we want to move to a global platform with major software releases that are scheduled and planned in a regular way. That greatly lessens complexity of running the IT infrastructure and helps to streamline costs.
The good thing about rolling out new technology in Europe is that it is really small. It's a one hour plane ride pretty much anywhere you want to go. You can gain a lot of synergy fast. It's pretty easy and convenient for people to travel back and forth for training and workshops. On the flip side, there is some localization, like the data privacy regulations in Germany, for example. It's not that much more difficult to deploy a global system in Europe than it is in the U.S.
I think one of the biggest barriers to success with the rollout of new technology is the lack of persistence over time that is essential to maintain momentum for a new platform. In the first six months, everyone is excited. You pilot the deployment. Eighteen months into it, you're on your third capability release because you're issuing a release every six months. Now you're only 40 percent deployed across the enterprise. Lack of speed becomes a deterrent. How do you keep up everyone's momentum and enthusiasm? That's a big challenge.
Another challenge is: how do you stay current on the capability software releases while you're not fully deployed? There's a delicate trade-off there, a fine tuning. You may have to dial down capability to advance the deployment. There's a critical balance between how quickly you can go and how fast you can deploy the solution. That is why sequencing is so critical for success.
In evaluating which technology partners we will work with, I see three levels of supplier relationships. With the first level of supplier relationships, I buy something and figure out how to use it with little engagement with the supplier. That is a low level type of relationship. The next level is a supplier who is a partner. The supplier tries to understand my problem, what I need for a solution, and sells me the solution, and maybe the supplier helps me to implement it. It's a bigger, more mature relationship. The highest level, which we will demand from our partners, is a strategic relationship with a supplier. The supplier really knows as much about our business as we do. They invest the time and resources to develop that knowledge and understanding, and they bring solutions to us before we come to them with a problem. They bring us a road map. We are going to demand that type of relationship.
Strategic partners agree with us that they want to be platform-centric, not project-centric. A platform view allows for greater consistency and enables us to keep our technology current. In our meetings with prospective suppliers, we discuss their 18 month road map. We want to know what's going on in their research and development, how we can collaborate, and how they can integrate their technology advances with Owens & Minor and our customers.
Our team is dedicated to keeping a strong focus on what the priorities are. It gets back to that sequencing. It really is like a jigsaw puzzle, and I'm trying to make sure I put all the edge pieces together first, before I start working on the middle of the puzzle. The executive team is extremely supportive of information technology being an enabler. They really get it. They are working hand-in-hand with me. To have that kind of support is a really great confidence booster for me and our IT Team.Read less
Sharyn Ford: Leadership Development is Key to Success
Owens & Minor is rapidly growing into a global healthcare services company. We know that the contributions of our teammates and our leaders, who helped us to arrive at this phase in our journey, are key to our future success. As the Vice President of Global Staffing & Organizational Effectiveness, I understand as an organization we need to ensure that we are able to identify, develop, and empower leaders at all levels. Leadership does not automatically come with a title or a position. Leadership comes from who you are and how you engage and inspire your team and those around you. It is all about demonstrating leadership skills in tangible ways every single day.Read more
Over the course of my career in Human Resources, one of the most important things I have learned about leadership is that, as a leader, I need to create an environment where people can be successful—where they can grow and thrive. As leaders, we lead from the front lines. We are expected to look toward the future and envision the trends, obstacles, and opportunities that others cannot see.
For Owens & Minor, exceptional leadership is even more important today because we are transforming ourselves and our company into something new–into a global healthcare services company. In order to do that, we need leaders to catch that vision, articulate it, and then translate it into tangible goals that the team can work together to achieve.
John Maxwell, one of the most recognized global leadership experts, believes that everything rises and falls with leadership. What I have learned from Maxwell is that whenever you look at a successful team, you always look to the leader because the leader sets the tone, creates the vision, and empowers to team to achieve incredible results. One of the essential elements of leadership is being able to create a vision that people can understand and one that will inspire them to follow. A leader must be able to take a vision and turn it into reality, and they must hold themselves accountable for the outcomes.
There is a model I refer to as the ‘E3 Principles' of leadership which stands for: Engage, Equip, and Empower. The ‘E3' model involves engaging teammates in creating a shared vision and strategy. We engage and equip them with the knowledge and skills necessary to achieve the vision, and we empower them to achieve their goals and objectives. I have used this model throughout my career, and I have seen the power of the model in transforming both leaders and teams.
We are incorporating these principles into our leadership development model to support our company evolution. The Human Resources team is strategically focused on leadership development that fosters teammate engagement, retention, and growth. Leadership is not a title, position, or designation. Each of us can be a leader; we can all lead, we can all contribute, and, by working together, we can all win.Read less
Vicky Lyle: Improve the Efficiency of Inventory Management
With the mounting attention on reducing costs and improving outcomes in today's healthcare market, providers are feeling the pressure. Savvy healthcare providers realize the importance of appropriately managing their inventory of medical and surgical supplies and the benefits of precise inventory management. Supply chain management is a specialized function that can directly affect both the organization's bottom line and patient outcomes, for better or for worse. In other words, effective control and management of medical and surgical supplies improves the delivery of healthcare services, patient care, and the provider's financial performance. Owens & Minor can be an important partner in helping hospitals achieve these positive outcomes.Read more
Historically, inventory management was not really viewed as a critical function—to have a whole process for managing sutures, for example, was an innovative idea. Traditionally, the focus was solely on the patient and patient care. However, the advancement of healthcare services and medical products has changed that, putting more focus on life-saving products, high-tech implants, and even organ transplants.
The biggest challenge is the environment for the operating room or perioperative care. In many hospitals, it is an area of significant waste and inefficiency, and for a number of reasons. The supplies for perioperative care include everything from the preparation for surgery, the surgery itself, and then to what is used to stabilize the patient in the recovery room.
In many hospitals, this is not a controlled environment. There may be multiple operating room suites directly connected to a single supply room, and there may be 25 clinicians using the same supply room on any given day. They may not always have the ability or the time to scan the whole room and do a thorough check of inventory availability or to check product expiration dates. Very few hospitals can manage a perpetual inventory for these suites—knowing every single time something goes into or out of inventory.
A related challenge is the entrance of new healthcare products. A hospital may order new products and put them into inventory. Thus, supplies that were previously ordered are no longer are used and begin to expire. This increases the chance of an expired or obsolete product cluttering valuable storage space.
Another significant challenge in managing and controlling the inventory of healthcare supplies is that multiple supply chains often feed an operating room or clinic environment. There's never just one single owner. Some products may be owned by the hospital, for example. Others come direct from a manufacturer, and others come from a distributor. In many hospitals, there is no single overall control.
Hospitals typically try to plan for sporadic demand of medical supplies. They tend to over stock to compensate for the lack of control. Imagine having a room filled with office supplies, for example; it makes it a lot harder to find what you need when you are overwhelmed with shelves and boxes of unorganized supplies. Hospitals also establish procedures to prevent the risk of human error, but the lack of control makes this problematic.
There are significant consequences to the challenge of effective control and management over the inventory of medical products and supplies, and they have a direct bearing on the health of the patient and the hospital's performance. A lack of control contributes to higher costs associated with managing that inventory.
Another outcome of poor inventory management is that out-of-control inventory typically requires more storage space. This is space that, if inventory was properly managed and controlled could be used for patient care. In the case of a hospital, for example, that may be space for another operating room or perioperative suite that would generate more revenue.
From a financial perspective, if a healthcare provider doesn't know what they have in inventory, the assets listed on their balance sheet could be considerably lower. Owens & Minor partnered with a hospital organization that thought it had $6 million worth of inventory on the shelf. After conducting a physical inventory, we learned they had $15 million worth of medical supplies, more than double the inventory they thought they had. That discovery enabled the organization to improve its bond rating because the value of their assets was so much higher.
We worked with another healthcare organization that faced challenges in inventory management. They didn't know what products were ready to expire or what to order. With the use of one of our tools, they were able to reduce their inventory by $1 million.
Finally, efficient management over the hospital supply chain can reduce expenses through reduced inventory, it can optimize processing, and it can contribute to better patient outcomes—better healthcare service delivery—because clinicians can devote more time to the patient.
Owens & Minor drives efficiencies within the hospital through people, processes, and technology. We offer a variety of services to help customers manage inventory including:
- Specialized resources to manage inventory
- Consultants to teach healthcare professionals how to manage and streamline inventory processes
- Technology to automate the management of inventory
When we partner as a consultant, we provide resources to go into the hospital for a certain period of time to learn their inventory management practices—their ordering and receiving processes, what technology they use, and so on. We review their practices and recommend methods for efficient inventory management. We also provide documentation for standard operating procedures so when the consulting project is concluded they are equipped to do it on their own.
Owens & Minor also offers Inventory Solutions Services including tools and technology for inventory management—technology that can capture the associated information, manage it, and integrate it with the hospital's other systems. Because we have proven that we can deliver improved inventory management performance to our healthcare provider customers, Owens & Minor is a valued partner in healthcare delivery and management.Read less
Danni Green: Advocacy & Education in Support of Supplier Diversity
As a veteran advocate of supplier diversity, I know that the healthcare industry, as a whole, has made great strides in expanding the range of companies that play a key role in developing products and services. But, I also know there is room for improvement. While the industry is attuned to the capabilities of diverse suppliers, I believe there is opportunity to shine a brighter light on the economic benefits of doing business with these fine companies. That's where I lend a hand.Read more
Owens & Minor has been involved in supplier diversity for nearly 30 years and is viewed as a leader in this area. Among our peers, we lead the pack with diversity suppliers as a percentage of private label producers and as a percentage of overall revenue—almost three times the percentage of overall revenue when compared to our nearest competitor. At Owens & Minor, our initiative is designed to attract diverse suppliers that bring value through manufacturing our products or who create benefits from providing services. Many of them have a niche offering that distinguishes them and differentiates the value they bring.
Because there is still a need for energetic and sustained support, my role is primarily advocacy and education. I operate very much like a business, but my products are the diverse companies in my portfolio. I work with our product category managers and sourcing managers to understand our product focus and then with our customer relations team to find a good match for the diversity companies in our portfolio.
Today, we have a large group of diverse suppliers. While many of them are very small, a select group of them have grown to $20-30 million in annual revenues. They have the ability to compete on the national stage across a wide variety of product categories. I focus on understanding their capabilities and promoting them within the company, so that we get in the habit of including them in requests for quotes or proposals. These companies are competing with their larger cohorts for the same opportunity.
My role is two-fold—education and advocacy. I educate our key Owens & Minor leaders to make them aware of the capabilities of our diverse suppliers. As a good corporate citizen, we promote our diverse suppliers and help them leverage their capabilities. We are very active in a number of ways to help strengthen these suppliers and to foster their growth.
There are a lot of challenges for small businesses in the healthcare industry. The need for strong quality assurance, adequate insurance levels, and sufficient working capital can preclude smaller companies from engaging in the market for healthcare products and supplies. Our efforts help diverse suppliers gain the necessary size and stability to compete in the market.
For example, we have a mentor-protégé´ program for diverse companies, and we have had a number of successful participants. We mentor these businesses. We help them improve their management practices, steer them to sources of capital, and work with them to remove obstacles that allow them to grow their businesses. We make market intelligence and other resources available to help them identify business opportunities. We give them intense support for two to three years. The goal is to help them get to the next level.
Many of these small, young business have very fundamental challenges. Their footprint may be too small. They may not have access to capital or favorable lending rates. We assess them, their products and product quality. I pair them with a developmental counselor who can help them cultivate their business and find their right niche to position themselves as value-added players.
The Owens & Minor diversity program started out of compliance with federal contracts, but it has evolved into a strong commitment to these diverse companies that offer agility and innovation that enables them to create solutions in the most cost efficient way.
Owens & Minor conducts an annual symposium to promote supplier diversity among the leading institutions in the healthcare industry. We use the symposium to bring diversity suppliers together to help them, as well as to recognize their achievements. They even have the opportunity to meet Owens & Minor competitors. The event provides an educational opportunity to learn more about what's going on in the healthcare industry and how they can grow their businesses. Conference attendees tell us that the annual event is a valuable networking opportunity for them.
Another way we promote supplier diversity is through our national membership in several organizations. One is the National Minority Supplier Development Council. We engage with them to help them work with a partner like Owens & Minor. The council also helps us to identify potential diverse suppliers. I also serve on the board of the Healthcare Supplier Diversity Alliance to help foster diverse businesses.
Many of these diverse suppliers are small businesses, and when we can partner with them to help foster growth, they have proven they have a positive impact on their own communities. Century Hosiery, located in Denton, N.C., is one of these suppliers. They have experienced considerable growth since working with Owens & Minor—so much, in fact, that they needed additional wastewater treatment plant capacity. They donated the land for a new plant for their community and successfully worked with their local government to help obtain a federal grant for the project. Construction of the new wastewater treatment plant also enabled some citizens in an adjacent neighborhood to obtain public sewer service for the first time, improving public health in the community. So, as our supplier diversity program helps strengthen small businesses, it also has a positive impact on communities around the country.
Beyond that, our supplier diversity initiative creates value for Owens & Minor customers, because in many cases they are responsible under federal and state government contracts to reach targets for diversity spending. For example, our hospital customers often come to us and ask how Owens & Minor can help them achieve their diversity goals. One of the resources we have for them is a catalog of diverse suppliers. This catalog includes all the products made by these suppliers for our MediChoice® brand. It also highlights and showcases these suppliers. That's another added value—helping hospitals meet purchasing goals for diversity in suppliers.
I love what I do because our efforts have a positive effect on the lives of people in the communities we serve. Together, we help diversity businesses grow. Together, we help communities grow. And, together, we help Owens & Minor grow. We're building good will, but at the same time we're also contributing to the bottom line in healthcare.Read less