Banner Health’s Three Innovative Supply Chain Strategies During COVID-19

At the height of the pandemic, surging COVID-19 cases and product demand spikes created immense pressure on health systems to obtain personal protective equipment (PPE).

Like other health care providers, Premier member Banner Health – comprised of 30 hospitals and more than 50,000 employees across six states – recognized early on that accessing high-quality PPE to protect their frontline workers and patients was vital.

While supply shortages affected Banner, the health system was able to recover from them quickly as a result of actions taken to:

• Diversify supply sources
• Optimize internal processes
• Harness the power of data

These strategies allowed Banner Health access to more than 10 million isolation gowns as well as other critical PPE for caregivers - all while decreasing product lead time, maximizing efficiencies and achieving cost savings.

As a longstanding partner of Premier, the Banner Health team turned to our supply chain experts to support their effort and help solve for pandemic-induced challenges.

Here’s how advance planning and innovative, creative strategies enabled Banner to obtain products in short supply.

Strategy #1: Diversify Supply Sources

For Banner, a future-forward supply chain management strategy requires diversifying production and Banner’s supplier base – both abroad and here at home – to mitigate risk and help ensure timely product access.

“A vital component to success in this effort was the groundwork we’d laid years prior to diversify sourcing strategies, including direct-to-manufacturer and forward-buy activities,” explained Doug Bowen, Banner Health’s Vice President of Supply Chain Services. “Eliminating unnecessary middlemen like brokers and importers, and working directly with untapped, global producers gave us greater efficiencies and reduced lead time of hard-to-source products.”

Throughout COVID-19, Premier’s nimble and expedited direct sourcing support allowed Banner to quickly find PPE and other supplies that were just not available from conventional sources. What’s more? Premier members who leverage our direct sourcing capabilities see an average of $40 million in annualized savings.

While global direct sourcing is one cornerstone of Banner’s strategy to diversify its supply chain, so is investing in greater U.S. manufacturing capacity. “To help reduce overreliance on other parts of the globe, we realized early on that we needed to boost domestic production of essential medical gear,” said Bowen.

To help meet this goal, Banner and 15 other leading health systems invested in Prestige Ameritech, a Texas-based producer of much sought-after N95 face masks. With this investment, Prestige is now providing more than 60 million U.S.-made N95s, surgical masks and goggles per year for Banner and other participating Premier members.

Strategy #2: Optimize Internal Processes

Banner further alleviated risk with an investment and focus on distribution and inventory management as well as supply conservation measures.

“We started looking for ways to streamline our distribution and opened Banner Health’s Consolidated Service Center and Distribution Warehouse in 2004,” said Bowen. “With more than 200,000 square feet and capacity for 7,000 pallets, our warehouse is centrally located to serve all our facilities in the Phoenix area, and allows our team to maximize storage and efficiencies.”

Alongside this advanced inventory control, the Banner team recognizes that a clinically integrated supply chain is necessary to thrive in today’s health care environment. Via Banner’s direct sourcing partnership with Premier, for instance, all products come from validated and inspected suppliers and designed to the Banner team’s clinical standards at the lowest price point available.

Holistically, clinical integration in the Banner supply chain:

• Drives supply requirements and helps limit waste
• Ensures all products are held to the highest safety and clinical standards
• Gives Banner clinicians access to high-quality products at the right price and affords them more time to focus on patient care

In addition, the Banner supply chain team, together with its providers and frontline workers, made PPE conservation a key priority to protect against COVID-related supply shortages. “We’ve encouraged all of our people to follow CDC-recommended PPE conservation protocols and be judicious in their use of supplies to protect our clinicians, employees and patients,” explained Bowen.

Strategy #3: Harness the Power of Data

Underpinning its holistic supply chain strategy, Banner is leveraging technology to better understand risk, provide greater visibility and support continuous operational transformation. During COVID-19, for example, Premier’s supply chain technology-enabled Banner with the ability to better plan and allocate supplies, as well as fast-track critical products via Premier’s expedited sourcing agreements.

“Many supply chains, both in and out of health care, still rely on disconnected data sets and outdated, manual processes. At Banner, we’re committed to building integrated digital supply networks that can anticipate and respond to future shocks in the supply chain, minimize their impact and position us for operational success,” said Bowen. “Technology enablement is the key to a modern, effective and resilient supply chain.

Outside of pandemic-related preparedness, the innovative Banner team is also leveraging Premier technology to better manage purchased services contracts, automate supply chain invoicing and payables processes, and enable its leaders to align with cost, quality and outcome improvements systemwide.

The Results

• 10 million+ clinically vetted isolation gowns for Banner’s frontline caregivers
• 60 million+ N95s, surgical masks and goggles annually for Banner and other Premier members via the Prestige Ameritech investment
• Decreased product lead time, maximized efficiencies and cost savings – while accessing the PPE and supplies needed to protect clinicians, employees and patients
• Banner Health’s Supply Chain has been ranked in the Gartner Healthcare Supply Chain Top 25 for 7 consecutive years and is currently ranked #5
• Overall, Premier forward buys for Banner and other members have gone on to source 130 million masks and 50 million gowns during 2020

“We continue to do everything we can to protect our health care workers while they care for our communities. Creative partnerships, innovative sourcing and distribution strategies, conservation measures and technology can lower barriers to entry and drive stable supply.

– Doug Bowen, Vice President of Supply Chain Services, Banner Health

Learn More

Premier continues to rally together with our members to ensure access to the supplies, data, analytics and intelligence needed to survive and thrive in a challenging environment.

• Check out our COVID-19 response
• Get Premier experts’ take on five key strategies to build a more resilient supply chain of the future
• Explore all of Premier’s supply chain solutions