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January 26, 2023

How to Reduce Your Supply Chain Spend in 2023

2022 has proven to be a difficult year financially for many organizations, especially for health systems. However, a new year offers the opportunity for a clean slate and a refreshed budget. Many health care organizations are looking to reduce their spend, and supply chain can be the best place to start. Our own, Jordan Ohman, chief financial officer at Advantus Health Partners, shares his expertise on current financial trends in supply chain, best practices for health systems and how Advantus Health Partners can help meet your goals.

Jordan is an expert at helping health systems develop cost reduction strategies in supply chain management. In his role at Advantus, Jordan is responsible for financial planning, management of financial risks, record-keeping and reporting. With over a decade of experience in the health care field, Jordan is a seasoned financial leader. Along with supply chain, he has extensive experience in the provider, medical device, and Group Purchasing Organization (GPO) industries. With a well-rounded understanding of the health care finances, Jordan provides insight into what transformational and operational opportunities can best support the needs of health systems.

Current Financial Trends in Supply Chain

Significant cost pressures have grown over the past couple years due to the pandemic and supply chain issues. “There have been supply shortages, inflation, shortages of workers and various disruptions with shipping,” shares Jordan. “These aspects have caused significant financial strain within the industry and in health care.”

“At Advantus Health Partners, we see this as an opportunity,” says Jordan. “Supply chain is an area where there is value to be had and should be at the forefront of efforts to reduce costs.”

Now is the time to address the strain head-on. “If 2022 was a struggle financially for your health system, 2023 will not be any easier,” shares Jordan. “Health systems will be impacted if they are not proactive in reducing their spend. Start looking at your vendors, your contracts and all the services you provide to determine what’s necessary and what is not.”

Jordan’s Best Practices To Reduce Supply Chain Costs

Given recent trends in supply chain, Jordan recommends health systems look at the following areas to reduce their spend:

Work with core suppliers

“By working with your core suppliers and understanding current inventory levels, you can ensure the proper amount of inventory sits on your shelves,” says Jordan.  Having the foresight and understanding of product pipelines is also crucial to mitigating surging inventory costs when there is a shortage. Leaning on your core suppliers to communicate potential risks and develop stock piling strategies that don’t overshoot or under assume necessary inventory levels is key.

Find areas of automation

 “In particular, use your Enterprise Resource Planning (ERP) system to understand if there are ways to optimize technology for automation in areas such as staffing or analytics, or to gain a better understanding of the data flowing through,” shares Jordan. 

At Advantus, we are well versed in utilizing Workday as an ERP in the supply chain space. “We can consult on how best to optimize Workday in supply chain.”

Optimize contract compliance and standardization

Jordan recommends investigating how well your health system is adhering to contract compliance and whether you have standardization within that contract. “Instead of having 10 vendors, see if you get that down to three core vendors,” says Jordan. “Standardization comes from utilizing what you have and knowing how to optimize it.”

“When it comes to contract compliance, Advantus has a very narrow focus on suppliers we work with, giving us the ability to get really good pricing,” shares Jordan. “A focus is to eliminate unnecessary suppliers, so, from a GPO or contract compliance perspective, we have the resources to help companies. Whether they join our GPO or need support in their clinical transformation, we can provide those services today.”

Consolidate purchased services

One of the biggest areas of opportunity is within the purchased services space. “Unless you have a dedicated resource or technology, there can be a lot of spend and waste within the purchased service area,” shares Jordan.

“There is not an easy button for this. There are some pain points where, as a health system, you should determine what is essential for your operations,” shares Jordan. “Whether it’s within supply chain or within the hospitals themselves, assess how you are operating from a team standpoint and your expenses.”

At Advantus, we approach purchase service optimization by recognizing opportunities across your entire portfolio. We have innovative approaches to food and nutrition services, environmental services, clinical engineering and patient transport.

How Advantus Can Help Reduce Your Spend

There are a number of ways Advantus Health Partners can help reduce spend using Jordan’s best practices.

Given the current trends in supply chain and the economy, you may be facing difficult decisions to reduce spend while maintaining clinical quality. “We work closely with our counterparts at the facilities and make sure they understand what we’re working on, what it’s going to take for us to hit certain figures and its downstream effect,” shares Jordan.

We understand how to reduce costs in supply chain while staying focused on quality patient care. “One of our biggest differentiators is that we’re operators,” says Jordan. “We are actually doing the work with our clients to implement these best practices.”

Connect with our team

At Advantus, we work closely with our health care partners and suppliers to develop effective supply chain strategies to eliminate operational inefficiencies, drive growth and maximize the impact of supply chain cost management. Learn how leveraging our advanced operational model, along with the expertise and experience of our team, can help you overcome supply chain challenges and reduce procurement costs. Connect with our team to learn how Advantus’ suite of health care solutions can help your organization determine a successful cost reduction strategy in supply chain.


Chief Financial Officer Supply Chain
of Advantus Health Partners

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