Shared Services West

Today, Ontario’s healthcare system faces significant financial and organizational pressures and funding constraints coupled with budgetary deficits which have created a need to find greater value within existing hospital managerial services. Shared Services West(SSW) has greater value and cost savings to its member hospitals by providing integrated P2P [procure-to-pay] supply chain service delivery.

SSW is a non-profit Shared Service Organization (SSO) established in 2001 by four hospitals in the GTA — Credit Valley Hospital (CVH), Halton Healthcare Services (HHS), Trillium Health Care (THC), and William Osler Health System (In December 2011, the Credit Valley Hospital and Trillium Heath Centre merged into a single hospital group, Trillium Health Partners (THP)). The goal of this SSO was to merge the supply chains of the four hospital groups into a single organization – SSW. This integration would create greater value for member hospitals through the creation of ‘economies of scale’ for sourcing as well as efficiency through a standardized delivery processes.

At its inception, SSW’s mandate was to focus solely on large regional sourcing contracts for the core member hospitals primarily for medical and surgical supplies. By 2008, these hospitals agreed that in order to generate greater value through their supply chain they would merge the related P2P services under SSW. The scope of SSW’s supply chain delivery services today includes sourcing, purchasing and logistics management. The future plans also constitute of SSW assuming each hospital’s accounts payable functions.

In addition to the four member hospital groups, SSW currently provides services (sourcing, purchasing and logistics) to customer hospitals as well. Customers currently include Baycrest Health Sciences, Runnymede Healthcare Centre, West Park Healthcare Centre, Haldimand War Memorial Hospital, Edgewater Gardens, and Headwaters Health Care Centre. “We have a very flexible model for our customer hospitals. We provide the customer with only the services they need, whether it’s just one service or the whole of SSW services,” says Jim Hudson, CEO of SSW.

Whenever the hospitals require a new product or service, SSW works with the hospital to source the item and negotiate the contract. SSW manages the fulfilment of those contracts from purchasing through to receiving on behalf of the members and customers. “There is a significant component of provincial policy compliance required when sourcing and purchasing for our hospitals, so part of our role is to ensure compliance throughout the end-to-end supply chain process,” says Hudson.

Since 2009, SSW has delivered significant value through savings and efficiencies for its member hospital groups (HHS, Osler and the new THP) and customer hospitals. In addition, SSW manages its members’ logistics departments and helps customers streamline their inventory management and delivery processes.

While the supply chain services always face challenges in regards to time constraints, costs and organizational logistics, according to Hudson, the biggest challenge for the company today is the increased volume of supply chain activity channeled by the hospitals to SSW due to changes in procurement regulations for public sector organizations.

Outside of sourcing, purchasing and day to day product delivery within their hospitals, a growing facet of supply chain service provided by SSW is sourcing equipment for redevelopment projects (building expansions). Hudson explained that this type of new development needs to be equipped in a relatively short period of time and requires effective support. “Our ability to source for these types of redevelopment projects resonates strongly with our potential customers, as many hospitals are undergoing some redevelopment on a regular basis,” says Hudson.

Further Plans

While supply chain service improvement is a given in regards to long-term goals, SSW also sees opportunity in developing stronger skills in service areas that can further benefit the hospitals. “While we are focusing on sourcing and purchasing, we have also significantly improved the productivity of the hospitals’ logistics. We are also looking to bring more customers [hospitals] under our umbrella, as this will give us greater economies in the sourcing market.”

Besides its hospital customer base, SSW also provides sourcing support to other health service providers linked to each LHIN. “We are looking to extend our services to them through contracts currently in place for our hospitals so they too can take advantage of our contracts and sourcing services,” says Hudson.

SSW continues to seek new ways to enhance value through the integration of other hospital managerial functions in the future. While delivering supply chain services currently keeps SSW’s hands full, the company continues to consider taking on, centralizing and streamlining services as a proven method to raising efficiencies.