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UPMC Wins Industry Award for Supply Chain Innovation


PITTSBURGH, Aug. 6, 2012 – UPMC today received the 2012 Award for Healthcare Supply Chain Innovation from the Association for Healthcare Resource and Materials Management (AHRMM) at the opening session of the group’s 50th annual conference in San Antonio.
UPMC was honored by AHRMM for innovations that reduce supply chain costs while improving performance. “In an increasingly complex health care environment in which health systems are continually expected to do more with less, our supply chain team has embraced changes that provide an efficient, user-friendly electronic procurement system,” said Chief Supply Chain Officer James Szilagy.
Specifically, over the past five years, UPMC created a virtual marketplace that allows those requesting supplies in the health system to enjoy a consumer-like online shopping experience for millions of items from more than 12,000 suppliers. The e-marketplace improves contract compliance and frees buyers to spend more time on strategic sourcing activities.
UPMC also launched an electronic data interchange solution that replaced a more costly and less user-friendly platform that now dominates the health care industry. The exchange allows UPMC to send orders to suppliers and receive order acknowledgements, shipping information and electronic invoices. 
“Our supply chain team has not been afraid to challenge the conventional wisdom and to adapt tools that have helped other industries improve their efficiency and customer satisfaction,” said Mr. Szilagy. “As a result, we have achieved significant savings that help to fund the world-class patient care and research for which UPMC is world-renowned.” Prodigo Solutions, a wholly owned subsidiary of UPMC, was created to market this e-procurement technology to other health care providers.
UPMC’s supply chain innovations have resulted in more than $3.5 million in annualized savings to date, noted Mr. Szilagy. All of UPMC’s purchase order requisitions now originate via electronic procurement, and 80 percent of the health system’s $2 billion in supply spend is managed via  this system. At the same time, contract compliance has improved by 40 percent, and electronic data interchange costs have dropped by 50 percent.
AHRMM, the premier membership group for health care supply chain professionals with more than 4,100 members, created the award to recognize outstanding achievements and innovations with demonstrated results within the health care supply chain. To share these ideas with AHRMM members, UPMC’s project will be featured in a coming issue of Hospitals & Health Networks magazine and in the Knowledge Center of the AHRMM website.
UPMC’s supply chain team also has been recognized by Healthcare Purchasing News as its 2012 Supply Chain Management Department of the Year, and as one of consulting firm Gartner’s Healthcare Supply Chain Top 25 for 2011. 

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