Data Only Helps When The Data Is True

We’ve lived through a supply chain time warp in healthcare: from clipboards and carbon-copy purchase orders to scanners, dashboards, and automation. Fred sits down with Tracy Cleveland, VP of Supply Chain at Munson Healthcare, to get honest about what actually improved, what still feels broken, and why the “latest tech” only works when the data behind it is clean. If you care about hospital operations, procurement, logistics, or inventory management, this conversation is packed with real-world details that go beyond slogans.

We talk about technology that protects people as much as it boosts productivity, including labor-assist tools and a robotic pallet wrapper that cuts waste and prevents injuries. Then we wade into the uncomfortable middle ground of supplier relationships: are partnerships a strategic advantage, or do they risk leaving money on the table? Tracy shares why many organizations still default to an adversarial mindset, and why collaboration matters more as hospital margins tighten and expectations keep rising.

From there we zoom out to industry-wide benchmarking, why common supply chain metrics are so hard to standardize, and why regional peer comparisons can be more useful than national averages. We also explore deferred infrastructure investment like docks, elevators, and sterile processing, plus the post-pandemic need for end-to-end supply chain transparency, including one example of catching counterfeit product before it ever reached patients. Finally, we address hiring and retention, remote work, and what it takes to build a strong supply chain team in a challenging labor market.

If this helped you think differently about healthcare supply chain strategy, subscribe, share the episode with a colleague, and leave a review with your biggest takeaway.

Transcript

Welcome And Guest Setup

SPEAKER_00 0:03

Hello and welcome to Ticking with Supply Chain Also. I'm Megan with CNOT Company. Thanks for joining us. In today's episode, Fred sits down with Tracy Cleveland, the VP of Supply Chain for Munson Healthcare. Together, they reflect on the vast changes of the supply chain industry and where they see heading in the future. It's a thoughtful and engaging conversation with plenty of takeaways. And now here's your host, Fred Kranz.

SPEAKER_02 0:28

We have a special guest, Tracy Cleveland, the VP of Supply Chain for Munson Healthcare in the lower peninsula of Michigan. Did I get that right, Tracy? You did. We're in the Northwest Lower. I mean, that that is a that is a uh unique uh uh unique description of where where you're located. Um a few months, a few, well, I guess it's been a month or so ago now. I sent out a questionnaire uh to a bunch of people uh because I was going to be celebrating 60 years in uh healthcare, and I wanted to do a special podcast, uh, but I wanted questions from the listeners. And Tracy sent me back a list of questions that I realized was a podcast in itself. So I didn't use any of the questions Tracy sent me during our the podcast that we recorded because I wanted to do this whole podcast where he and I will answer the same questions together. But before we do that, Tracy, why don't you introduce yourself, tell us a little bit about yourself and a little bit about Munson Healthcare?

SPEAKER_01 1:39

Sure, thank you. Uh it's a pleasure to be here. Um, I appreciate uh you inviting me onto this program. I am the supply chain vice president for Munson Healthcare, which supports 11,000 square miles in northern Michigan as our service area. Uh, we're the primary uh healthcare provider in the northern lower peninsula of Michigan. I have been in supply chain uh since about 1993, and so that puts me at about 32 years, not anywhere near 60. Um, so uh, but in the time that I've been doing that, uh Fred and I have crossed paths a couple of times, and so I appreciate his uh wisdom and sage advice when it's available. Uh so I'm happy to spend some time with you today.

Tech That Helps And Fails

SPEAKER_02 2:34

Great, great, great. Well, let's just get right into the question. So, what what I'd like to do is we'll read the question and then you give a response, and then I'll respond to your response. How's that? Okay. So uh, and technology, this is uh really interesting. While you have been in the business, we have gone from clipboards and pencils to scanners, scales, and bots. What technology do you think has helped, and where do you think technology falls short? And in your 30s some years, answer that question.

SPEAKER_01 3:10

So I think where technology um provides visibility into data around product utilization or uh trending in one direction or another is probably the most helpful when it comes to the purchasing procurement team. Um, and then those labor assist technologies are the ones uh when we're talking about logistics and operations and getting product from one spot to another. Um, as our workforce is aging, um we want to make sure that we're avoiding injury at all cost and uh keeping people at work.

SPEAKER_02 3:52

So, what what uh labor assist technologies are you folks utilizing?

SPEAKER_01 3:58

We about two years ago found um an automated robotic uh pallet wrapper. And so you load it up with your stretch wrap and uh place it right next to the pallet, and it will give you the perfect tension wrap on that pallet, and it's not a guy going around and around and around the pallet, bent over, hurting his back, um and waste or wasting the shrink wrap. The the robot puts it at just the right tension and uses significantly less wrap than a person. Safety and savings. Any any other things you're considering? I'd really like to um understand if we could get um uh conveyor technology uh for a small uh small environment. You know, generally that's for a really large distribution center. Uh I'd like to know, you know, find a way to get that conveyor technology in a smaller environment and make it make sense uh for many of the same reasons.

SPEAKER_02 5:11

So from my perspective on this, having started out in the time of um of uh uh uh stones and notepads that you carve things into rocks with, um I'd say the biggest uh technology is the advance of uh of uh computers and being able to aggregate data. Uh we literally did do everything manually. And um fortunately, and uh that we'll keep returning to this, um when I started, most of the hospitals in America were standalone community hospitals. There were the the growth of what we call systems didn't start until the late 80s, early 90s, uh, you know, to become prevalent like it is today. So we really had to had to manage one hospital, maybe a couple clinics offs off site. And and if you were there, you pretty much knew where everything was, knew what was being used, but you still had to go around and physically take inventory or physically make paper orders and you know physically do all the work. The um the uh advance of computer technology uh changed everything. But and we all you and I both uh are friends with Ed Hiscock, who's one of the great uh uh data guys, uh the big problem with the technology always works well, but but uh uh the falling the failing point in that was the um accuracy of the data that you're using to to help support decisions. And I think that um we've gotten better with that. Uh far better. Uh and I think that uh still, however, you know, you have to apply governance and oversight to make sure that the data that you're using is good. But but I don't know where I don't know where places would be today without uh the ability to process data as quickly and as well as we can.

SPEAKER_01 7:11

Yeah, I uh I completely agree. When when I started, the first thing I did in the morning when I came in was sign purchase orders with the pen and remember to push hard enough to get through all four copies.

Supplier Relationships Versus Savings

SPEAKER_02 7:26

Yeah, exactly. Exactly, and then we had to do manual read the receiving was manual, everything. How how much do you think we have shortened cycles like uh uh the payment cycle and stuff just by the presence of of the computers, you know? Oh weeks, yeah, absolutely, yeah. And and it really was it really happened, folks. That's the way it was. The next uh series uh of uh next uh uh subject of your question was relationships. And your question was do relationships between suppliers and supply chain professionals bring value, or does the hospital end up leaving money on the table? Now I'm gonna I want you to answer this first because you're still in the game every day, and you might want to tell uh over your 30 years how how your relationships with suppliers has changed.

SPEAKER_01 8:31

It has. Um I I think the jury on this one is still out. Um where with let me qualify, I pursue relationships with the people that I do business with. I think it's important to understand one another as human beings and identify if you have a shared goal, something that you can work on together. And if you're both working toward a shared goal, uh the outcome is generally better than if you are anonymous to one another. Um I uh internally within the health system, um this is not, I don't believe it's it's the predominant opinion. I think people uh move uh executive leadership, other supply chain leaders would say that you need to have an objective, uh a completely objective, nearly anonymous methodology for uh finding the best value for the organization. Um where I think that falls short is when there's a problem to be solved, and um then you want somebody at the table who understands what your health system is committed to, what the problem is, and what uh a potential outcome could look like that is beneficial to both the supplier and the health system.

SPEAKER_02 10:13

Yeah. So if I were to ask you this, do you think that um most organizations still retain the old adversarial approach to uh suppliers? I think they do. I think they do. I think it's us versus them. Yep, and win versus lose, right? And and I would have to say this I was a liberal arts major, I was a history major, not a um, not a business major. And by the time I went into leadership, I'd already spent seven years uh as a caregiver working on the floors with patients and stuff. So I probably had a different uh perspective than many of the people that were already there, you know, the the purchasing agents and all those all those hard dealing guys and women that were out there. And I've always had uh this approach to uh listen to everybody's uh story or everybody's offering objectively. And when I thought there was something that we uh could we could benefit from, start to forge relationships that serve both ends. You know, the guy that's selling stuff has got to make money too. He's gotta understand uh that he or she's got to understand that you need to have a favorable uh outcome as well. I mean, historically, the worst case scenario of all has always been the orthopedic guys that would go in and uh talk to the doctors and and and take you right out of the process just so they could uh get whatever they wanted the the doctors to use to be put in use. And I think I in fact I know that most organizations are are changing toward a more collaborative approach, but I really like the fact uh that you were honest enough to say that the whole adversarial approach is still behind a lot of people's thought process. And I think now that things are becoming more difficult for everyone, uh it's gonna be more and more important to drop that and start to uh you know say, hey, you know, what do you want to accomplish? This is what we want to accomplish. Maybe we can do things to help us both uh come out favorable, right?

SPEAKER_01 12:36

And I think some manufacturers and suppliers need to really look at the margin that we're talking about. You know, hospitals are having trouble making a positive margin at all, and some suppliers are still 18, 20, 24 percent um profit margins, and that that's an imbalance that isn't sustainable.

SPEAKER_02 13:00

Right, especially with uh the looming effects of some of the legislation that's out there. Uh the um the reduction of people that will have access to health care, which means that that your place is going to have to still treat emergency cases, and you're gonna have to take the hit for people that don't pay. So it people need to be more aware and more and more collaborative. And I think I don't think people get it, but I watch salesmen are still salesmen. They still want to sell you something whether you whether you need it or not. Uh and um and I've tried to tell people for years that healthcare is not a push sale, it's a pull sale. We we buy things because we need something, we buy services because we need a service, but the sales philosophy is to push that on you uh, you know, and and have you make their decision.

SPEAKER_01 13:56

Well, and I just one more thing. When there is a relationship and there's some understanding about the health system, it doesn't mean that we don't still perform an RFP. And so uh I think the person who has a relationship with the health system has the inside track because they understand what our priorities are and they understand what it is we're working toward, whereas another supplier may not. And so if they don't capitalize on that relationship, shame on them.

SPEAKER_02 14:26

Right. And and uh, you know, how long have you been at Munson? Five years, a little over five years. Okay, so you got five years of relationship building. You have people that you know that you can respect and trust, and so you have a a collaborative relationship with them, whether it's formal or not. Uh, you you have built that trust over time. Is that fair to say?

SPEAKER_01 14:48

That is fair to say, and uh happy to say that people that I have known over the course of my career follow followed me, as it were, uh to Traverse City. So I didn't have to start over. Um, you know, there's that national presence for many of these manufacturers. So that's helpful.

Why Benchmarking Metrics Break Down

SPEAKER_02 15:08

Okay, now a category that I think is really interesting. The hardest category, when you when you talk about metrics and you talk about comparing apples to apples, we work in an in an industry where we're actually trying to compare apples to fruit salad because uh everybody measures everything differently. So your question was this, and I'm gonna turn it right around on you. Why is it so hard to find common supply chain metrics across the industry for benchmarking supply chain performance?

SPEAKER_01 15:42

My first answer is I don't know. I I think that in part um there is uh a sense of protection around the operation. And so when we start to try and identify common metrics or common variables, people don't want to show because you know it's uh there's a bit of protection or or geofencing um around their operation that they're just not prepared to share. Um and I don't understand the hesitation when it comes to um a collaborative benchmarking effort. Um, it just you know, I I understand the difference between academic medical center and a small community hospital, uh a veterans hospital or a different specialty hospital, that they are different. But I believe that we can find common metrics and build a benchmark that we could compare our efficiency and our productivity and our effectiveness um in a way that's non-threatening. Um I I still think it's possible. I just don't know how to get there.

SPEAKER_02 17:05

So do you measure what what do you measure?

SPEAKER_01 17:10

We measure um everything from lines picked to dollars spent to um savings achieved uh per um professional, per category. I mean we just we measure all sorts of data elements within the supply chain. Um I would be absolutely happy to say, we'll pick these five, and we'll we can all publish these five metrics and just see uh what it is comparatively.

SPEAKER_00 17:47

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SPEAKER_02 18:14

Yeah, I've always thought that wanting to compare yourself against someone nationally served no purpose. Here's what here's the way I've always looked at metrics. I've looked at, first off, all of our customers are usually clinical areas or specialty areas that uh have unique things that they do and that they can measure. And I've thought, number one, that when I wanted to do metrics, I would talk with someone and say, okay, what are the important things that you want to you tell me what you think we should measure, and we'll measure that. And and then the comparison that I think is important is measuring you, your performance against yourself. If you get down to if then, if I'm going to, if I'm going to get a robot to push supplies around, and it costs me X amount of uh labor dollars right now to do this, uh the robot costs Y, how much will my labor dollars plus the robot cost me? You know, you these are things you can measure. Yep.

SPEAKER_01 19:21

And these are things that these are things that we do measure. My concern is we can compare ourselves to ourselves and watch our marginal improvement over time. But if there's a similar-sized organization somewhere else, let's say uh Southeast Michigan or Iowa or somewhere else, um, and they're much better at it than I am, then I'm comparing myself to myself and I'm still lousy. I would like to know if I'm lousy or not.

SPEAKER_02 19:57

So, what you're saying is you want to find a uh a similar cohort that you can identify, maybe maybe regionally, uh, because regionally is very important. I think regionally is far more important than nationally. Okay. I I just came back from uh a meeting in Chicago yesterday and I drove out and drove back. And you know, I think the probably the raw price of gasoline is the same in every one of those places, but that's not what you pay at the pump. It's it's it vary from um it varies from under$3 to I stopped at one place coming back yesterday and they were out of 87 octane, so I had to pay over$4 for 89 octane. Uh but but regionally, I think is a valid uh comparison. So I I guess you could probably get together a group of cohorts and and uh build a collaborative, say, hey, let's measure these things together. And at the same time, if you see that they're doing something at 96 uh uh cents on the dollar for something you're doing at 105, you can call a person up and say, What are you doing? Tell me what you're doing that I'm not. Yeah, then that's a different way to use the data, I believe. More more accurate. Would you agree with that? I would, yeah.

SPEAKER_01 21:17

And I know that competitors or or even regional colleagues are sometimes reluctant to share their pricing. Well, there's certain things we can't share, but um just performance, you know. I I think it's I think it's achievable.

Deferred Infrastructure That Hurts Care

SPEAKER_02 21:36

Well, here the next uh set of questions is I think this is interesting because I never thought about this until you asked this, but I've always had this one pet area that I'll talk about when it's my turn. Um, infrastructure investment. Where is the most important deferred maintenance investment for a healthcare supply chain? Docks, elevators,

SPEAKER_01 22:00

replenishment tech or other so for me right now it is almost everything infrastructure um for because for years the way capital was allocated was through a sort of competitive process where people would come to a meeting annually and pitch their uh capital request and however could an elevator compete with a linear accelerator or an MRI right and so the very exciting medical technology would win and the infrastructure would be deferred perhaps again and again um but the cost to the organization when an elevator goes down is incredible the patient experience suffers efficiency suffers um you may incur injuries that you wouldn't otherwise incur because of longer trips or using the stairs or whatever and so um I believe that it is that uh dock elevator uh facilities infrastructure that has suffered and I supply chains right behind you know um right behind it with with replenishment technology and uh work assist but I I think the buildings are probably uh suffering the most yeah and I would um I I'll tell you what my pet area is here but historically I uh capital uh was a real key point for me and I tried to help I tried to have the organizations that I was responsible for develop long-term capital plans that took that provided every year for uh net you know routine replacement of items uh you buy a bed if it was made by Hill Ron you could buy it when you're 20 and still be using it when you're 80 but and it never never never gets looked at but it needs to be so we would develop air uh develop uh percentages for you know replacement of of aging technology and then clinical technology and then uh then contingencies and you would always have to fight the the doctors always uh had have been to RSNA or some conference that they uh saw something with more lights than whatever they had were using now had and wanted it this year.

SPEAKER_02 24:30

But the area that I think especially if you're if you're in a in an IBM that is acquiring and growing the area of biggest opportunity that I see is central uh supply sterile processing. That's the area that uh sterilizers last forever too and the way the only way that anybody ever takes a look at sterile processing is uh when something goes wrong.

Communication Then And Now

SPEAKER_01 24:56

But if you pick up if you if you acquire three hospitals you've acquired three three uh sterile processing operations that are outdated outmoded and need to be uh looked at uh immediately but never never get looked at so that that's the area that I think is the biggest opportunity for uh places to take action make plans and uh improve operations and lower cost well especially if you're planning a a growth strategy um you know if you introduce a new service line or uh hire a new physician you need to be able to push those cases through um in a timely timely way without overinvesting in the instrumentation uh and implants or whatever it is that he specializes he or she specializes in so um that that is another that's part of the building um from my perspective um the the sterilizers have to work um the washers have to work the the elevators have to work between sterile processing and the OR in arrive in the clean core um on time and fully uh fully available yeah so we're talking about the same thing I just got a a more specific niche in there so the last thing finally communications and I have to read this you started before email or smartphones official communication was by US mail was the quality of the communication better when you had to take the time to compose a letter and then send it on a three-day journey to the recipient okay you first well I didn't have the the total world changing uh uh communication impact that that I think you have lived through um but I'll tell you even when I started um we were using the landline telephones um to have our conversation so there was not text there was not commonly uh email communication and so I I think that the composition and content of the communication was better um because it was more thoughtfully constructed and there wasn't this sense of real-time immediate urgency to respond and I think some of that urgency is because the technology allows it um you know your phone buzzes on your hip and you want to know what what did they say who is it what's going on so um I think it was better. What do you think?

Supply Chain Transparency And Counterfeits

SPEAKER_02 27:51

Well you know interestingly enough when I started um I it as soon as I became a director which was probably 1974 or so you know I use a telephone I I I prefer communication by voice okay and there are two types there's a there's the external with the with the vendors that you're talking about there was also the internal and and in those days um the internal communication was either get out of your office and go talk to someone face to face or send an inner office memo and the inner office memo was always a CYA event really when you get right down to it. Something had happened uh you wanted to make sure that that whatever you said was recorded and carbon copied to whoever it needed to be copied to so that you didn't get chewed out. Um and I I hated that because the the best communication is face to face the best communication is is talking to each other and asking questions and uh and relating to each other with respect. Sometimes you do have to formalize things and if uh especially if there was a problem with a vendor equipment or whatever something of that nature you did have to send those those letters and stuff but it was a last resort I mean I've always been I've always I've always prided myself on being willing to show up and uh and take my medicine from somebody if I messed up face to face and say I'm sorry what can I do to what can I do to make this better. Um and it's it seems to work it still works today. The biggest problem I've seen for our communication is that we are from when we're talking with suppliers we've never talked with their supply chain we've always talked with their salespeople and and uh and I think I think that what I'm seeing now more coming uh more and more into being is organizations that are becoming more familiar with the supply chains of the suppliers that they deal with and I think there's been some real benefit to that have you had any experience with that well I since the pandemic that has been a real focus to understand uh where is this product coming from where is it manufactured what's you know what's the real status of its transportation um all of that so I think that we have had to become more well informed on what's going on uh in the supply chain from the supplier to us rather than just when the product hits our dock to when it gets utilized by the patient.

Hiring Challenges And Remote Teams

SPEAKER_01 30:32

Now we need to kind of understand what's happening from the point of origin all the way to the doc and then to the patient. And sometimes at a very detailed level um because of the components and and if they can be um uh you know uh counterfeit or not. Um again back during the pandemic we at Munson Healthcare had one example uh where we ended up with counterfeit product um and uh we identified it before it was ever uh went beyond our dock um and then we had to work backward through uh the distributor that had brought it to us and then where did they get it? And you know so we were made whole they were made whole um somebody who got arrested um further back up the chain. But to your point we need to know now where we used to just take it on faith that the product that was coming to the dock was what we ordered and it was appropriate. That is not always the case today. Okay well that that's all the questions Tracy but I there was one thing that you and I had talked about a little while ago um that I just have you comment on because I know that I know that you know not being um Trinity Health and Lavonia Michigan and not being one of the gigantic places being being in the upper lower peninsula of Michigan um you probably face challenges with acquiring and retaining uh folks for your supply chain um how do you go is that a big issue for you and if so how do you what do you how do you go about getting the people you need and keeping them yeah so um recruiting talent to northern Michigan um is is a challenge um and uh not just in supply chain um recruiting physicians recruiting nurses recruiting rad techs and the whole the whole nine yards everybody um there are no longer enough uh people to fill all of the roles that we have within the health system I think we have over 400 vacancies in our health system today and so um we are doing everything from working with foreign recruiters to going to college uh colleges college campuses across the upper Midwest um to recruit new grads and and new people into healthcare and then we are also um sort of a hybrid environment now so we don't they don't have to come all the way to Traverse City to be a part of our team and so uh that remote work component um has made its way um into our team and so our procurement team and sourcing team um are rarely together in an office environment anymore.

Final Thoughts And How To Reach Us

SPEAKER_02 33:42

You know so being able to get up from your desk and walk down the hallway and talk to one of your colleagues is now getting on a video call um and entering their office uh uh via uh virtual um communication but still incredibly valuable because of that cross connection and and common um components across service lines right and so I'm really looking for those people who are committed to supply chain excellence um who want to be a part of uh what's going on up here um hopefully they'll want to come and move up here and be part of our community but maybe not and so we have to uh adapt and see how we can make it work uh work best well i think i think they should want to give traver city uh a look i know i've always wanted to go visit the upper peninsula and i've never been there so i might make it yet before my time runs out here well well you can do two birds with one stone traver city is a beautiful vacation destination all on its own and then the upper peninsula is just about an hour and a half drive and the mighty macknaw bridge uh up and across is that's just an experience all by itself that that's my goal has always been to drive across the Mackinac Island Bridge you know so so uh Tracy thank you so much for joining us today it's been a pleasure having you on um I I always look forward to talking with you I know that I see your name uh a lot of times in some of the stuff I write and everything and I I appreciate that uh and I wish you continued good luck and good health.

SPEAKER_01 35:28

Well thank you very much and I hope you stick with us as long as you enjoy it uh you've been a a real gift to the supply chain community over the years and uh we appreciate your reflections your advice and your guidance so thank you thank you and have a have a good day Tracy thank you well that's all for today thanks so much for joining us and don't forget to hit that subscribe button and connect with us online so you'll never miss an episode and can catch up on all the ones you might have missed.

SPEAKER_00 36:01

Got a topic you're fired up about or maybe you want to be a guest on the show Fred would love to hear from you. Just reach out at S C R A N S at S T L N C E dot com. See you next time