Chair of Supply Chain Management Jim Francis, has led Mayo Clinic's supply chain for 27 years and built something almost no health system has: a commercial operation with eight revenue-generating businesses that now offset 73% of supply chain operating costs. Jim shares the keys to successful healthcare supply chain commercialization, his annual strategic planning discipline, and why he believes the industry still isn't collaborating enough on shared problems.

Chapters:

0:00 Introduction

1:06 What "Chair of Supply Chain Management" means at Mayo Clinic

1:53 Teaching and talent development inside Mayo

2:42 Industry generosity and the mentor who shaped Jim's career

6:01 Building and sustaining a strategic plan for 27 years

7:38 The art vs. science of supply chain strategy

8:26 Biggest successes and failures from the strategic planning process

9:46 How Mayo launched its commercial supply chain business 18 years ago

12:43 The three keys to commercial success in healthcare supply chain

13:08 What "taking it out of hide" means and why it works

14:25 Collaboration, SMI, and why the industry isn't doing enough of it

17:05 Patience as a leadership discipline in long-term partnerships

18:32 27 years of team tenure and what sustained loyalty actually requires

20:15 Financial pressures in healthcare today and supply chain's expanding role

22:19 Why supply chain is finally moving upstream

23:37 Digital transformation, AI, and the next three to five years

26:22 Parting thoughts

During COVID, Stamford Health built inventory dashboards that updated multiple times per day to track supplies arriving in bulk quantities at unpredictable intervals from new vendors. This real-time visibility transformed clinical leadership's perception of supply chain from back-office function to operational intelligence center. 

Shenelle Padarat-Singh, Director of Strategic Sourcing, explains how her transition from managing supply chain information systems to leading sourcing operations revealed why the data team's seemingly "annoying" requests for complete item details matter: one missing packaging specification triggers errors in receiving, throws off inventory counts, breaks purchase order-to-invoice matching, and ultimately creates finance reconciliation issues. On supplier relationships, she's direct about why quarterly business reviews and weekly check-ins with key vendors create the communication channels that make same-day approvals and 8am Saturday deliveries possible when a Friday 6pm OR request hits.  

Topics discussed:

• Building COVID inventory dashboards with multiple daily updates to track unpredictable bulk deliveries from new vendor sources

• Understanding how incomplete item data cascades through receiving, inventory counts, purchase order matching, and finance reconciliation processes

• Implementing 360-degree product transition frameworks that evaluate usage patterns, clinical needs, reimbursement rates, and standardization opportunities

• Conducting quarterly business reviews with key suppliers to establish communication channels for urgent same-day procurement requests

• Presenting supply chain analytics in formats meaningful to clinical audiences to gain stakeholder support for product transitions

• Managing tariff impacts through supplier negotiations that identify alternatives and offset cost increases with savings opportunities

• Navigating healthcare supply chain acquisition integrations across different geographic locations, systems, and operational standardization requirements

• Developing career resilience for healthcare supply chain by mastering ambiguity and mid-task priority shifts during operational interruptions

Procurement's biggest misconception isn't about the work itself; it's about believing your role stops at cost savings. Juliana Saretta, Former VP of US Sourcing at Keurig Dr Pepper, spent 30 years proving that procurement touches every part of the enterprise: growth strategy, cash flow management, brand integrity, and now climate solutions. She shares how when Mott's Applesauce needs to maintain brand integrity around goodness for families, procurement not only sources apples, it also manages relationships with 150 multi-generational farming families in upstate New York who supply 95% of the volume.

Juliana also touches on her post-merger integration playbook, which starts with something most leaders skip: generous, attentive listening across both legacy organizations to unearth where the real problems and opportunities sit. She warns against the seductive trap of focusing solely on the allure of cost synergies from combined spend, emphasizing that teams perform best when they're engaged around a purpose beyond just delivering savings. For AI and procurement's future, she argues the critical skill isn't technical fluency but learning aptitude and curiosity, since the technology itself will look completely different in a few months.

Topics discussed:

• Expanding procurement's strategic impact beyond cost savings to influence growth, bottom line, cash flow, and climate solutions

• Managing category management across multi-brand portfolios by tailoring strategies to specific brand requirements and positioning

• Sourcing Mott's Applesauce from 150 multi-generational farming families in upstate New York representing 95% of total apple volume

• Leading post-merger integration through attentive listening across legacy organizations rather than focusing solely on cost synergy 

• Proactively diversifying appliance manufacturing to prepare for tariff policy expansion

• Structuring global versus regional procurement models 

• Building future-ready procurement teams by prioritizing learning aptitude and curiosity over specific AI technical fluency or tool mastery

• Recognizing career limitations when resources don't match ambitions and identifying non-negotiable conditions for professional success 

Amanda Chawla, SVP - Chief Supply Chain & Post Acute Care Officer at Stanford Health Care, inherited a supply chain where half the organization was outsourced, basic functions like category management and master data management didn't exist, and clinical staff were calling daily about missing products. Nearly a decade later, Stanford's supply chain has earned department of the year recognition and top marks in Gartner's rankings. Amanda walks through the framework she used to get there and why she still considers the transformation unfinished.

Amanda also breaks down the four-committee governance structure she built around non-labor spend: indirect, medical, pharmaceutical, and a capital committee currently in development. Each is co-chaired by the business with supply chain as a supporting arm, and every senior VP and C-suite executive has a representative on a subcommittee. Amanda makes a case for redefining the chief supply chain officer role, arguing it should function more like a chief spend management officer. She connects that vision to how she built her team, including why she looked outside healthcare to write job descriptions and how she modeled a clinical dyad structure inside a non-clinical function.  

Topics discussed:

• Building supply chain infrastructure from scratch including category management, master data management, and insourcing outsourced functions

• Applying a people-first transformation framework across leadership structure, technology, culture, infrastructure, and business processes

• Converting a non-labor spend program into an executive-level governance model embedded in organizational operating plans

• Structuring co-chaired spend committees across indirect, medical, pharmaceutical, and capital categories with C-suite subcommittees

• Redefining the chief supply chain officer as a chief spend management officer responsible for organization-wide financial strategy

• Modeling a clinical dyad structure inside a non-clinical supply chain function to align business partners and drive accountability

• Using quarterly business reviews with internal customers like HR and marketing to build trust and expand supply chain's strategic mandate

• Adopting a data-first, technology-as-enabler approach that links every metric to operational pillars and decision-making cadences 

Utz Brands’ Senior VP/CPO Ron Schnur's M&A integration framework strategy challenges the standard playbook: across six acquisitions, his team at his previous company, White Wave, diagnosed each deal separately. Some received immediate full integration, others got a soft touch for a few months to protect supplier innovation pipelines that created category advantages. The critical question wasn't spend consolidation potential, but whether forcing integration would damage the supplier relationships driving growth. This "leave the nickel on the table" philosophy prioritizes speed-to-market and supplier innovation over immediate cost savings. 

At Utz, where the company faces competitors several times its size, Ron applies lessons from his roles at companies that had to "punch above their weight class" through risk-taking rather than scale. For hiring, he screens for curiosity and perseverance over technical capabilities, asking probing questions about how candidates work through challenging situations rather than testing Excel proficiency. Universities should handle hard skills; what matters is the ability to challenge first answers and grind through complex supply market problems.  

Topics discussed:

• Building curiosity and perseverance over technical skills when hiring supply chain professionals for complex problem-solving roles

• Applying differentiated M&A integration playbooks at White Wave Foods across six acquisitions to protect supplier innovation pipelines

• Implementing "leave the nickel on the table" philosophy that prioritizes supplier innovation and speed-to-market over immediate cost savings

• Competing as smaller companies against industry giants by taking calculated risks and building strategic supplier partnerships

• Leveraging AI for rapid supply market intelligence gathering compared to traditional three-month global supplier assessment cycles

• Developing enterprise-wide mindset that values total business impact over purchase price variance and acquisition cost optimization

• Evaluating ROI on emerging technologies through targeted investments in customer-facing versus supply-facing AI applications

St. Luke’s Health System built a 330,000 square foot consolidated service center with an ASRS featuring 28 automated pickers and nearly 20,000 bins. Adrian Wengert, CSCO & VP of Supply Chain, spent 3 years visiting a dozen health systems before construction, extracting one unanimous lesson: every organization regretted not building bigger. He secured board approval for initially unused space by extending their 10-year pro forma, arguing future expansion would cost significantly more than justifying empty square footage upfront.The automation investment directly addressed Boise's labor market, where three Amazon distribution centers compete for the same warehouse talent. 

Facing inflation that has grown fourfold with vendors embedding anticipatory tariffs, St. Luke's is pursuing direct manufacturer relationships, bulk pre-buys, channel fee negotiations, market share consolidation with fewer suppliers, and e-auctions to counter double-digit quarterly supply cost increases. Their clinical integration includes a medical director in supply chain who uncovers opportunities traditional teams miss. Sustainability investments include reusable sharps containers, solar-ready infrastructure for 2 megawatts to power the building and electric vehicle fleet, and blue wrap reduction.  

Topics discussed:

• Building 330,000 square foot consolidated service centers larger than needed by extending 10-year pro formas to justify unused space

• Implementing automatic storage and retrieval systems with automated pickers to combat Amazon's labor market saturation

• Integrating tech vendors for goods-to-person automation while managing interface complexity and validation during warehouse implementations

• Unifying supply chain and pharmacy operations infrastructures to reduce transportation costs and create operational efficiencies

• Combating fourfold inflation growth through direct manufacturer relationships, bulk pre-buys, channel fee negotiations, and e-auctions

• Embedding medical directors within supply chain teams to uncover clinical cost reduction opportunities traditional buyers miss

• Deploying contract lifecycle management tools with AI to monitor market share commitments and proactively signal deviations

• Implementing reusable sharps containers, solar-ready infrastructure, and electric vehicle fleet transitions for sustainability ROI 

EBIT Intelligent Procurement ditched their 50% gain-share model for fixed-fee managed services after recognizing how gain-share creates operational friction: departments paying fees from their budgets start resenting consultants as cost-cutting mercenaries, regardless of actual performance. The fixed-fee pivot quieted the "who really drove this saving?" disputes that derail stakeholder relationships and freed category experts to focus on supplier relationship management and outcomes beyond P&L line items. 

When a client needs marketing expertise for a quarter, then shifts to facilities work the next, CEO Joanne McCourt and her team pull from EBIT's specialist pool without carrying fixed overhead or managing staff augmentation contracts. Their C-suite pitch challenges why companies attempt building procurement capability across fragmented indirect spend instead of investing that talent in core business operations. The MRO reality: manufacturing sites that have operated independently with local contractors for years will emotionally resist centralization, even when compliance requirements and supply chain transparency demand it. The business case exists, but the operational resistance is real. 

Topics discussed:

• Transitioning from 50% gain-share to fixed-fee managed services to eliminate departmental friction and stakeholder resistance

• Implementing virtual procurement models that provide flexible category expertise through monthly fees

• Targeting C-suite executives instead of procurement teams when selling outsourced services to address strategic business priorities 

• Managing emotional resistance when centralizing MRO and facilities procurement across manufacturing sites that operate independently 

• Measuring procurement success through operational outcomes like supplier relationship management, governance improvements, and board-level reputation rather than savings alone

• Protecting revenue through procurement interventions in courier performance issues, payment processing optimization, and customer experience improvements across indirect categories

• Partnering with LogicSource to move away from spreadsheet-based client management systems 

Daniel Hurry, President at Advantus Health Partners & CSCO at Bon Secours Mercy Health, helped  justify building Advantus Health Partners to their board by calculating the admin fee equation, then proving they could negotiate better pricing at their scale. Their commercialization strategy was to skip the crowded commodity categories where another contract for gloves or gowns adds no value, and focus on complex operational purchase services and hyper-complex implants where national GPOs have gaps. 

Healthcare still lacks universal product codes, which means supply chain leaders can't access the real-time demand planning or behavior modification strategies that retail and energy industries built decades ago on UPC data. Instead, healthcare spawned entire cottage industries for data cleanup and item master enrichment, workarounds that other sectors never needed. Dan's leadership development program, built with Miami University's supply chain school through MBA residencies and internships, has now placed five former team members as chief supply chain officers at other health systems, treating talent development as an industry investment rather than internal retention problem.  

Topics discussed:

• Building Advantus by calculating admin fee equations versus internal operating costs to justify better pricing at scale

• Commercializing GPOs by targeting complex operational purchase categories and hyper-complex implants where market gaps exist

• Implementing single-partner category strategies with open-book economics and daily KPI-driven continuous improvement cycles 

• Addressing healthcare's universal product code gap that prevents real-time demand planning available in retail and energy industries

• Managing dual chief supply chain officer and GPO president roles through execution excellence despite political and communication challenges

• Developing supply chain talent through MBA residency programs with Miami University producing five chief supply chain officers

• Navigating post-merger integration and pandemic disruptions while launching new commercial GPO operations and maintaining ministry focus

• Shifting supply chain strategy from foundational pricing benchmarks toward utilization management and consumption analytics at point of use  

Procurement at Memorial Sloan Kettering Cancer Center requires abandoning traditional sourcing language when working with physicians whose primary concern is patient outcomes, not optimization metrics, but Matthew Laud, Director of Strategic Sourcing & Supplier Management, has figured out the translation. Framing procurement's value into clinical terms creates the trust necessary for physicians to delegate critical supply decisions. His approach centers on connecting procurement capabilities to Memorial Sloan Kettering's mission of eradicating cancer, using the universal impact of cancer as common ground for building stakeholder relationships.

In turn, his distinction between good vendors and great partners hinges on suppliers who proactively deliver value beyond contractual obligations, whether through emerging technologies that provide competitive advantages or flexible pricing that redirects savings toward patient care. Matthew implements this through rigorous category management including quarterly business reviews, stakeholder scorecards, and regular rebidding of existing suppliers to drive continuous improvement. He also shares why visiting hospital rooms to see sourced medical devices in use with cancer patients provides fulfillment that recognition and praise never could, reinforcing the tangible connection between vendor negotiations and life-saving treatments.

Topics discussed:

• Translating procurement terminology into clinical language that resonates with physicians focused on patient outcomes

• Building trust with stakeholders in cancer treatment by connecting sourcing capabilities to the mission of eradicating cancer

• Distinguishing good vendors who meet basic requirements from great partners who proactively deliver value through emerging technology, flexible pricing, or enhanced capabilities

• Category management frameworks, including quarterly business reviews, stakeholder scorecards, and regular supplier rebidding to maintain quality while managing costs

• Overcoming gatekeeper resistance from internal procurement teams through strategic networking at industry summits and tech events

• Managing sourcing complexity across hundreds of acquired entities with independent sourcing teams and category structures

• Thriving in procurement's inherent ambiguity by developing complete execution plans from vague, high-level business requests

• Operating as an unsung hero who finds fulfillment in impact rather than recognition

• Evaluating emerging AI tools and new vendors through rigorous RFP processes that test capabilities against established competitors

• Advancing diversity in both internal team composition and supplier selection to reflect the patient populations being served 

Welcome to the inaugural episode of Smarter Sourcing: Healthcare, with host Eric O’Daffer. Gary Fennessy, VP & Chief Supply Chain Executive at Northwestern Medicine, has been NM's Chief Supply Chain Officer for over 20 years and brings 44 years of industry experience navigating the transformation from a single academic hospital to a multi-site health system. His operational approach during COVID-19 kept Northwestern "two steps ahead of the bear," maintaining full supply availability when other systems faced shortages. That success came from years of building procurement infrastructure and distributor partnerships that most executives overlook until crisis hits.

Gary's leadership development philosophy of "throw you in the deep end but never let you drown" has produced chief supply chain officers now leading major health systems, along with multiple CFOs who came up through his finance and operations teams. He identifies shadow supply chain areas like pharmacy and lab as the next major opportunity for cost reduction, noting that indirect spend now delivers bigger returns than traditional medical supply optimization. His candid admission about delegating AI leadership to his team while timing retirement around the next ERP implementation offers a realistic view of generational transition in healthcare supply chain. 

Topics discussed:

• Navigating 44-year healthcare career progression from accounting through finance and operations into corporate leadership 

• Managing M&A expansion integrating multiple community health systems into academic medical center operations framework

• Building procurement infrastructure that maintained full supply availability during COVID-19 by staying "two steps ahead of the bear"

• Transitioning from hard-nosed vendor negotiations to collaborative partnership model with distributors, GPOs, and tech providers

• Identifying shadow supply chain opportunities in pharmacy, lab, facilities, and indirect spend categories as next frontier for savings

• Developing leadership talent through "throw them in deep end but never let them drown" philosophy 

• Delegating AI and rapid technology adoption to next generation while planning retirement timeline around ERP implementation cycles

• Establishing executive credibility by delivering value through foundational work