Supplier diversity, in any supply chain, is good business practice. In the health care industry, the benefits are uniquely connected to the hospitals because diverse suppliers are often found in local communities. By actively utilizing diverse suppliers, hospitals help build a healthier local economy that enables more people to afford care for themselves and their families. Utilizing local diverse suppliers also helps build loyalty to providers in that health system. This interdependence, and opportunity to be part of growth initiatives, sums up what brought Shaleta Dunn to Vizient in March as senior director of program services, supplier diversity.
“I have been intentional in my career to make sure programs I’m involved with offer a very real economic impact to diverse businesses and communities. That has always been my ‘why’. Vizient is committed and well-positioned to grow their supplier diversity program and I’m excited to lead these collaborative efforts with our members and suppliers,” said Dunn.
Since stepping into her role at Vizient, Dunn has visited multiple members, including those on the Vizient Supplier Diversity Advisory Council to understand their perspectives, challenges and what they want and need from Vizient to either implement, or further expand and increase their diverse supplier inclusion and spend. To achieve their goals for supplier diversity, including increasing spend with diverse suppliers, she has also represented the Vizient membership at key industry trade group events, including the National Minority Supplier Diversity Council (NMSDC) and Women’s Business Enterprise National Council (WBENC), and she also negotiated an agreement with the Initiative for a Competitive Inner City (ICIC) to help diverse suppliers gain much-needed business development support and access to capital to grow their businesses.
Based on the knowledge gained in meetings with members, the Supplier Diversity Advisory Council and industry groups, Dunn believes that Vizient can immediately assist members with strengthening their supplier diversity strategies through benchmarking assistance, program assessments and goal setting, utilization of the Vizient contract catalog, and tools that track spend to measure performance.
Benchmarking to understand opportunity
Benchmarking a hospital both to its peers and to national data is important when setting goals and establishing accountability metrics that enable tracking of success and identifying areas for improvement. Hospitals and health systems find great value in understanding what other systems are doing in the diverse supplier inclusion and utilization space to meet goals. Those new to supplier diversity often begin by asking where there are opportunities, both nationally and locally, to identify and contract with diverse vendors.
“Members want and need data that provides accurate comparisons, and that’s part of what we do at Vizient. We are able to share some of the best practices and benchmarks around increasing supplier diversity that we see happening in the industry and within our membership.”
According to Dunn, census data, the NMSDC and WBENC databases of certified, diverse firms, and local or state certifying authorities are all good starting points to review local demographic information. These third-party resources can also help providers gain insight into the number of woman-, minority- and veteran-owned businesses in a given geographic area. “For example, the data may show that a particular member’s community has 300 woman-owned businesses. From there we help them assess how many of those woman-owned businesses may be appropriate for their supply chain needs and if so, are they viable businesses that we can work with?” Dunn said.
In addition to third-party benchmarking data, Vizient can also provide Tier I and Tier II diverse-supplier spend data from member hospitals that are reporting into our databases. “We can tell a member, ‘This is how much you’ve spent with diverse suppliers that are on Vizient contract,’ and we can share overall, without naming names, what a similarly situated hospital member has spent with diverse suppliers,” Dunn said. “From there we can help them identify where they can grow their diverse spend.”
The search for diverse suppliers and tracking spend is now easier
The updated and improved Vizient contract catalog is an essential resource for members who have established goals for diversity spend or those who are just getting a program off the ground. One of the features of the diverse supplier section of the catalog is the ability to locate suppliers by diversity designation. This is important since many hospital systems have an overall goal and then goals by type of diverse supplier.
“The overall goal might be 35 percent and may be further identified as 10 percent woman-owned businesses, 15 percent minority and 7 percent veteran,” said Dunn. “The contract catalog gives them the ability to search and find diverse supplier(s) that match that criteria.” The catalog contains specific information regarding the suppliers’ diverse certifications. In each supplier profile, if they’ve also identified other validated and self-certifications obtained, those are listed.
A key part of performance is measurement and Vizient can assist members with tracking Tier II spend (spend that happens with a diverse supplier but through a prime supplier). “The Vizient Supplier Connection tool gives members the ability to see what their systems are spending, even down to individual clinics within their health system. Within Tier II spending, it also breaks down the spend data to the actual diverse supplier when reported by the prime supplier,” said Dunn.
By applying a member’s spend data to related best practices, Vizient is able to present members with new opportunities for business with a diverse supplier. Dunn added that, in some cases, “there may be a supplier already on contract or a new diverse supplier that could possibly be put on contract that could increase their diverse supplier participation.”
Getting involved in the Supplier Diversity Advisory Council
The Vizient Supplier Diversity Advisory Council serves as the voice of members in the area of supplier diversity and is currently accepting nominations for terms beginning January 1, 2019. “The role of the council is to tell us what their needs are, where there are gaps in our contract offerings, share ideas for addressing common barriers and really drive what the Vizient goals are within the supplier diversity program,” Dunn said. Longer term, she intends to leverage the council to develop and publish best practices for a supplier diversity program within a member system, specifically around Tier I and Tier II spending.
“I’m excited to be part of Vizient and to work with members,” said Dunn. “The company is committed to advancing opportunities that include a greater number of diverse suppliers in their contract portfolio and in the supply chains of member hospitals. We want our program to grow because we know that diverse suppliers bring innovation and cost savings for our members and directly impact the communities they serve.”