1. Houston Chapter AHRMM
October 15, 2013

2. Agenda Meeting goals: Introduction
Give you an overview of distribution as it relates to the supply chain
Share some ideas of how you can more fully use your distributor
Introduce MMS & share our unique customer offering
Introduction
Overview of med/surg and equipment distribution
The value of your distribution partner

3. MMS – A Medical Supply Company
Founded in 1970
Current management acquired the company in 1996
Missouri and New York based
Largest independent “Regional” Distributor with a growing “National”
footprint
Authorized distributor for all major GPOs
Full breadth of products from leading healthcare manufacturers
8 Distribution Centers

4. Markets Served include the entire Continuum of Care
IDN, Acute Care,
Surgi-Center
67%
All Other
(Retail Pharm.,
Industrial,
Gov’t, EMS)
11%
Long Term, Extended Care,
Homecare
12%
Alternate Care, ACO 7%
Hospice 3%

5. Accountability Customized Communication and Reporting Metrics
Back order – Price discrepancy
Fill rate – Contract expiration
Customer Efficiency scorecard
Accuracy & Fill Rate
Traditional 98.5%
L.U.M. 99.0%
<1.0% Picking Errors Monitored Daily
QA on 25% of all daily Trad orders
QA on 50% of all daily L.U.M. orders

6. Types of Distributors Large/National/MMS
Broad product offering
Logistics & IT sophistication
Contract management
Multiple “Value Adds”
Market Specific (e.g., Acute, Physician, LTC, etc.)
Focused product offering
class of trade expertise/targeted “Value Adds”
Category Specialists (e.g., Respiratory, Wound Care, Orthopedic, EMS, Equipment, etc.)
Deep, but narrow, product lines
Clinical expertise

7. AHRMM = HIDA Industry/market/regulatory intelligence
Data for benchmarking
Best Practices
Education for professionals
Basic training
C.E.U.s
Topic specific seminars/webinars
Publications
Networking

8. Health Industry Distributors Association
Founded in 1902
160 Distributor Members
Includes large, small and specialty distributors in all medical markets
130+ Non-Distributors (e.g., manufacturers & supply chain partners)
Avg. Acute Care Distributor
Avg. Physician Distributor
# of SKUs carried
11,500
3,400
# of Manufacturers
431
274

9. What Do Distributors DO?
Reduce the complexity of ordering from multiple manufacturers
Manage pricing/contracts
Assume supply chain risk for Customers & Manufacturers
Customize delivery & logistics: from “traditional/bulk” to L.U.M.
Extend credit
Offer electronic interfaces, ordering & inventory management systems
Integrate, track & communicate supply chain data management
Reduce storage & inventory
Provide Customer Service
Process return goods & recalls
Provide same/next day delivery
Introduce & facilitate education on new products

10. Supply Chain WITHOUT Distribution

11. Supply Chain WITH Distribution
Factoids:
Per Line, Direct-to-Manufacturer Orders Cost 4.1 Times as Much as Distributor Orders
Phone/Fax Orders Cost the Hospital 4.4. Times as Much as EDI/Internet Orders per line
The level of automation used directly impacts process cost & efficiency
Simpler processes (touch points/steps) increase efficiency

12. Hospital Procurement Study: Soft Dollar Spending
MOST Efficient Hospitals LEAST Efficient Hospitals
$8.90/PO to Distributor $15.01/PO to Distributor
$57.35/PO to Manufacturer $63.33/PO to Manufacturer
19,096 Distributor POs ,203 Distributor POs
Avg lines/PO Avg lines/PO
7.1 FTEs FTEs
205 Staff hours/Million $ Staff hours/Million $
med/surg spending med/surg spending
© 2004 Health Industry Distributors Association:

13. Distributors Offer Solutions to Issues That Matter Most
Going green
Remove & recycle corrugated waste
Deliver in totes/carts
Disaster preparedness: Planning for multiple scenarios
Communications: contacts, authorization, ordering
Inventory access: sequestered, stockpiled, alternate DCs
Improved outcomes
Manage protocols
Standardized operations
Drive formulary compliance
Actionable data
Contract optimization and usage analysis

14. Thank You
QUESTIONS?