How SMI has helped innovate the supply chain and improve patient-centric healthcare delivery over the last two decades.
October 2024 – The Journal of Healthcare Contracting
SMI is celebrating its 20th anniversary this year at its Fall 2024 Forum in Austin, Texas. The nonprofit, member-driven community of providers, suppliers, and distributors has been working together the past two decades to reshape the supply chain and improve patient-centric healthcare delivery.
SMI was the brain child of two visionaries, Carl Manley and John Gaida. Both Carl and John sought to bring both sides of the trading partner relationship together to work on important issues and industry challenges just as Integrated Delivery Networks (IDNs) were forming.
“When SMI was founded, Carl Manley had just started his direct distribution strategy at Sentara Health and that was new to us,” said Steve Gundersen, retired vice president and general manager of BD. “There was a lot of interesting things going on.”
Gundersen recognized Manley, John Gaida, Jane Pleasants, Jim Francis and Tom Hughes for their vision for SMI 20 years ago. “That vision and the underpinnings are still the same today,” he said. “We’re not going to talk about buying or selling anything.”
He says that was refreshing but strange for a commercial person to hear. If the buying and selling part was out, what were they going to talk about?
“It ended up centering around a big portion of my job at the time and that was how to make the industry more effective and more efficient,” Gundersen said. “How do we work together? Because we were all trying to solve the same problems, but we were doing it individually.”
The SMI board of directors, made up of half providers and half industry partners, brought a balanced approach to non-transactional buying and selling, and its board chair rotated every few years between the provider side and industry partner side.
“It was symbolic of the initiatives and the roll-up-the-sleeves activities that impacted everyone in the field,” Gundersen said. “We wouldn’t pick something that was solely provider centric. It was balanced and unique.”
The motivation of the founders was to raise industry awareness about the initiatives SMI was tackling and to create a positive legacy in the industry.
“I knew Tom Hughes very well and the trust he developed between a manufacturer like me and a provider like Jane Pleasants was unique,” Gundersen said. “Very few people could do that back then. And Carl Manley had the right get-it-done attitude, and he was open to change and collaboration. And working with Jane Pleasants made me appreciate providers as really good people.”
Gundersen also mentioned Carol Stone, Jim Natale, Vance Moore, Deb Templeton, Armin Cline, Keith Kuchta and the SMI staff as those who came together with a strong conviction to get something done for change.
SMI initiatives and best practices
Today, SMI holds two in-person forums per year with educational webinars and work in between. Its staff utilizes technology to help members exchange information and keep them together.
“We invite anyone who wants to join our webinars to come and learn, and we don’t charge anything,” Gundersen said. “They are so valuable. The CEO of BD and the CFO of AdventHealth were recently on a webinar discussing sustainability, for example.”
Groups and councils provide leadership and structure to tackle SMI’s initiatives. Gundersen used the case of “The Perfect Order” and a group he facilitated at SMI to describe how the organization has helped define the success or failure of the healthcare supply chain.
“What’s the perfect order,” he asked. “The right product at the right price, undamaged, on time and in full. But that’s not so easy. There’s probably 30 people in each healthcare company trying to figure that out and thousands within the provider network. And what does on time actually mean?”
The board of directors
Gundersen’s group set out to characterize the perfect order through internal processes, or a common metric concept that was reflective of the efficiency of both providers and industry partners.
Industry standards was another initiative and how those standards are applied to products in production and how they are driven through the provider to the patient’s bedside in a seamless manner.
These initiatives as well as sharing best practices over the past 20 years have been significant results of SMI.
For providers and industry partners
Jane Pleasants, executive director of SMI, was with Duke Health for over 20 years.
“One of the founding principles of SMI in 2004 was it must be the executive for both the industry side and the provider side,” she said. “As a provider at the time, there was no other organization I could go to and see my peers.”
Pleasants says she learned a number of best practices through SMI while at Duke and shared them with her C-suite.
“I had my SMI peers on speed dial or text,” she said. “I could ask a question at any moment and get an answer. In between meetings, when I had an issue at my organization, I leaned on my relationships created at SMI in the most important and impactful ways at Duke.”
Pleasants says removing selling from the equation took away the tension.
“People talk about their families and the vacations they went on as well as challenges for the industry,” she said. “Competitors are authentically talking side-by-side to providers or industry peers.”
“I learned so much from everybody else,” she said.
Senior executive leadership required
SMI members are required to be senior executives at their healthcare organizations and that’s a big way it helped change the industry, according to Pleasants. “Simply because of who the members are that are there,” she said.
Gundersen believes SMI’s leadership in the industry, through those senior executives, can lead to more advocacy in the future and planning around issues like resiliency.
“I hope we can make faster fact-based assessments of the issues and apply rigor to resolve problems quickly and advocacy is stronger, so government has the input and expertise it needs from SMI and organizations like it,” he said.
Gundersen says sometimes providers decide on their own how they are going to handle sustainability or resiliency, for example, leaving manufacturers to respond to many different questions about those topics.
“What’s your plan if event X happens in Taiwan,” he asked. “These are things that manufacturing companies have been doing for a long time but they’re doing them better now. When we see a potential problem, how are we attacking it and sharing information to be ready in the future?”
Staying small
SMI’s mission is to drive and influence change in the industry, and having the right mix and making sure the right thought leaders are present is more important to SMI than its size. “That’s why it has to stay small,” Pleasants said. “It allows everyone to know you by your first name. I think we lose the sweet spot in the mission if we try to get larger.”
Pivoting quickly to what’s on the minds of members is important to Pleasants. It drives SMI’s forum content and its success, and it was critical during the Covid-19 pandemic. Four in-person forums were canceled during the pandemic and being able to pivot was some kudos to SMI’s staff as they learned different techniques to keep the membership in touch.
They spread virtual conferences over a few weeks and months to stay connected throughout the year and it was so popular that when in-person forums returned, members asked if they could keep the webinars and virtual speakers’ series.
“We had a board meeting every month during those 24 months in the pandemic to make sure our members would come out the other side with us and they did,” Pleasants said.
Succession planning and the future
The Board of Directors at SMI is balanced between providers and industry partners.
“We rotate the chairs of the smaller committees and the main board from provider to industry partner,” Pleasants explained. “The succession planning has been well thought out in that the chair-elect participates in all of the executive director board discussions.”
Regular updates include the board chair, the chair-elect and the past chair for continuity. Board member terms are three years and may be renewed for an additional term. Unlike many boards that have a “parent” organization it reports to, the SMI board is SMI’s
only governing body.
“Continuity was very impactful during the pandemic as we developed the strategic plan as a board and carried it through Covid,” Pleasants said.
“If we could implement data standards, we could be like the grocery industry and know what’s on our shelves,” she said. “A lot of pain around resiliency would go away because the data would be at our fingertips.”
That’s a goal to carry into the next generation of SMI leaders. Gundersen is serving as chair-emeritus, but the next 20 years will be led by the next generation.
“They’re strong leaders who are really involved in SMI including leading the work of our councils,” Pleasants said. “They’re really giving us great input on where SMI should go in the future.”
The organization is also advancing female leaders in its Advancing Women Leaders program to elevate women into executive level positions.
“The founding members were unwavering about a balanced board and initiatives,” Gundersen said. “They formed the strategy and the focus for many years to come.”