Lancaster General Health

FACTS AT A G LA N C E
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
RESULTS
LOOKI N G AHEAD
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Customer Innovation Study
Lancaster
General Health
reduces off-contract supply chain spend by 6 million
dollars per year with Infor Lawson Contract Management
“We wanted to get our contracts into one defined place,
with document control and easier access to information
about pricing, expiration dates, and other items. Infor
Lawson Contract Management has made it possible.”
Jeffrey Nelson
materials management information service (MMIS) administrator,
Lancaster General Health
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FACTS AT A G LA N C E
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
RESULTS
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Facts at a glance
Company
Lancaster General Health
(LG Health)
High level impact
Situation analysis
n
Replace disparate, siloed platforms with one integrated system to better manage on-contract and
off-contract spending.
Headquarters
n
Reduce cost and risk by improving contract visibility, analysis, reporting, and compliance.
Lancaster, PA
n
Integrate contract management with the Infor Lawson Procurement and Financial suite, including
Lawson Purchase Order, Inventory Control, Accounts Payable, and Requisition Center applications.
Industry
Healthcare
Products and services
Infor Lawson Contract
Management, Infor Lawson
Requisition Center
Employees
7,100 +
Revenue
Innovation strategy
Meet strict cost saving goals with increased on-contract compliance spend and reduced
non-contract purchases.
n
Wanted more than a “digital file cabinet.”
5,300+
n
Required a proactive system to simplify contract creation and provide automatic alerts about
supplier tier pricing levels and contract renewal milestones.
contracts brought into
the system
Results
n
Brought legal contracts, followed by supply chain contracts, into a single contract management
system through a phased-in approach.
n
Realized significant savings by increasing on-contract requisitions and reducing
off-contract requisitions.
n
Gained a proactive system to take advantage of supplier specials and flexible tier pricing
policies, negotiate more effectively, standardize purchasing practices, as well as save
significant time and money.
Web site
I N F O R C U S T O M E R I N N O VAT I O N S T U D Y
of all active contracts
brought into one contact
management system
through a phased approach
n
$1 billion
www.lghealth.org
90%
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24
physician practices
integrated into a single
system, eliminating siloed
purchasing processes
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FACTS AT A G LA N C E
“For years our physician
practice group used
paper contracts. We
really wanted to get
a handle on their
purchases and
approval processes.”
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
RESULTS
LOOKI N G AHEAD
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Innovation at every level
Jeffrey Nelson
MMIS administrator,
Lancaster
General Health
I N F O R C U S T O M E R I N N O VAT I O N S T U D Y
Better contract management =
a healthier organization
Lancaster General Health has a national reputation for
innovation. LGH is a 631-licensed bed, not-for-profit health
system with a comprehensive network of care including
Lancaster General Hospital (LGH), Lancaster General Health
Women & Babies Hospital, outpatient centers, and urgent
care locations. Industry groups and publications consistently
name LGH among the best hospitals in America. To continue
its success, the health system wanted to improve the way
it manages legal, procurement, physician, and IT contracts.
Multiple disparate systems, paper contracts, and manual
processes for approval and reporting had created an
environment in which spending was poorly controlled, and
information about whether vendors were on- or off-contract
was difficult to find.
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The hospital needed to consolidate its contracts and related
documents into one place that could be easily accessed
by the appropriate staff members—both in the hospital and
across physician practices in the system. LGH’S legacy
MediTract system was cumbersome and made it difficult
to locate pricing, expiration dates, market utilization, and
other vital contract information. Its data was static and could
not be manipulated. MediTract also did not integrate smoothly
with the hospital’s Infor Lawson Procurement system, so there
was no easy way to limit off-contract spending, or ensure
security and access to particular contracts.
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FACTS AT A G LA N C E
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
RESULTS
LOOKI N G AHEAD
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More than a “digital filing cabinet”
Breaking down organizational siloes
Lancaster needed a proactive system that was more than
a “digital filing cabinet”—one that would send alerts and
email notifications regarding contract renewal, pull up all
contract-related documents with ease, and integrate with
procurement systems that push out purchase orders and
other transactional documents. When hospital executives
saw Infor Lawson Contract Management and how it would
integrate with Lancaster’s core Infor Lawson Procurement
system, they knew they had a solution with the power to
realize their strategy.
The alerts the system provide make it possible for clerks
to take a much more proactive approach to contract
negotiations. Rather than contracts simply auto-renewing,
clerks can review them and take advantage of opportunities
for savings by issuing new RFPs. In addition, Lancaster
wanted to enable ordering both from the hospital and
the physician group side, which Infor Lawson Contract
Management can handle, even though LGH’s 24 physician
practices use a different supplier and maintain a different
general ledger for their accounts.
I N F O R C U S T O M E R I N N O VAT I O N S T U D Y
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Improvements from the start
The fully automated system received high marks as soon as
it was implemented. A utility in the system quickly converts
a non-catalogued item to a catalogued item if enough orders
are placed for it, greatly reducing the size of the items master
list and making it easier to centralize purchasing
with suppliers who offer the best terms.
Now, when users key-in an item to be ordered,
the system checks to see if it is on contract and
if so, confirms the item’s price and tracks
the purchase on the contract..
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FACTS AT A G LA N C E
Detailed impact
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
RESULTS
LOOKI N G AHEAD
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5,000+ contracts all in one place
6 million
$
per year reduction in off-contract
supply chain spend
Value realized
20-40
%
cost reduction when Lancaster
buys from contracts negotiated
in advance
Infor Lawson Contract Management’s clear visibility into
contract pricing and spend analysis information for each
vendor provides strong support for Lancaster’s cost-saving
goals. For example, Infor Lawson Contract Management
stores UNSPSC codes, which aids in reporting and breaking
down spend by item type so that Lancaster General can make
smarter purchasing and budget decisions.
10-15%
shift of off-contract
spending compared to
on-contract spending
24 physician practices integrated into a single
system, eliminating siloed purchasing processes.
Lancaster is able to take better advantage of specials offered
by vendors who are on contract. When items are loaded into
the system, Infor Lawson Contract Management tracks all
spending, whether on- or off-contract.
“Prior to implementing Infor Lawson Contract Management,
if a special item was ordered, it wasn’t tied to any contract,
whereas our new system automatically defaults to a contract
if one is available for the item,” said Jeffrey Nelson, materials
management information service (MMIS) administrator, We’re
able to recognize another $6 million that once was unspecific
spending, but now we know it is on a contract.”
There are approximately 600 Infor Lawson Requisition Center
users across the health system, including about 150 in the
various physician practices. Lancaster General has been
able to synchronize its users’ workflow within a solid contract
management framework, bringing unity, organization, and
specificity to what once was a scattered, unspecific process.
1.5
days eliminated from the
purchase order/invoice
reconciliation process for a
typical Accounts Payable clerk
through the combination of Infor
Lawson Contract Management
and Requisition Center
I N F O R C U S T O M E R I N N O VAT I O N S T U D Y
Taking advantage of vendor special
offers and tier discounts
“We can actually see what vendors we are buying items
from, whether it’s a pen, a computer, or a physician kit,” said
Nelson. “It’s visibility that gives us all sorts of advantages in
centralizing our requisitioning and purchasing smarter.”
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FACTS AT A G LA N C E
“Infor Lawson Contract
Management is giving us
the value we expected.
I know as we work with
it and add tools, such as
pulling in UNSPSC data
and using analytics,
we’ll get even more
out of the system.”
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
RESULTS
LOOKI N G AHEAD
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Looking ahead
Jeffrey Nelson
MMIS administrator,
Lancaster General
I N F O R C U S T O M E R I N N O VAT I O N S T U D Y
One of Lancaster’s biggest wins has been in having a system
that drives pricing compliance. It improves the efficiency of
the purchasing department because the price that comes
across the PO is the price on the contract. “There are no
buyer messages to deal with,” said Nelson. “Everything
processes a lot more cleanly.”
Lancaster is currently working with Owens & Minor on
a vendor portal that will capture bill-only items and integrate
with the Infor Lawson Contract Management system. This
could significantly decrease the number of items catalogued.
Nelson expects even greater benefits as more contracts are
input into the system when they come due. The system’s
integrated spreadsheet designer makes it easy to load items
on demand. “We don’t have everything loaded yet,” he said.
“I know our purchasing milestone notifications will be even
higher once we get everything into the system.”
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FACTS AT A G LA N C E
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INNOVATIO N STRATE GY
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Links
Leading healthcare organizations
transform into centralized,
collaborative service operations
with Infor Healthcare
Lancaster General reduces off-contract
supply chain spend by 6 million dollars
per year with Infor Lawson Contract
Management, brought 5,000+ contracts
into the system—90% of all active
contracts—through a phased approach.
Infor Lawson Supply Chain Management for Healthcare
delivers tools that help staff to focus on more critical tasks,
enhancing their value to the organization and increasing
job satisfaction-all while helping to improve quality of
patient outcomes.
Infor Lawson Supply Chain
Management for Healthcare
With the increase in internal and external demand for
accountability, the metrics you use to measure your supply
chain costs need to be more strategic than ever.
Read more >
Read more >
Watch the video >
I N F O R C U S T O M E R I N F O R M AT I O N S T U D Y
H O S P I TA L S A N D H E A LT H S Y S T E M S
L A N C A S T E R G E N E R A L H E A LT H
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FACTS AT A G LA N C E
S IT UATIO N ANALYSIS
INNOVATIO N STRATE GY
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