Key takeaways:

  • Greater diversity in healthcare brings new perspectives, capabilities and competition to the market. It also delivers broader societal benefits by generating health and prosperity for traditionally disadvantaged communities.
  • To support diversity, equity and inclusion (DEI) efforts, one key area providers are turning to is the supply chain, which is uniquely positioned to expand social impact through inclusive sourcing strategies and diverse supplier partners.
  • Through a committed strategy and team, investments and partnerships, education, technology and benchmarking, Henry Ford Health System is leading the way in supplier diversity.

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In and out of the healthcare industry, building an organizational culture of diversity, equity and inclusion (DEI) is no longer aspirational ─ it’s vital.

For the Procure Pulse podcast, Conductiv’s Nancy Daniels, Senior Director of Product and User Experience, recently sat down with two leaders from Henry Ford Health System ─ Bill Moir, Senior Vice President of Supply Chain and Tracy DeWent, Interim Director for Strategic Sourcing ─ to discuss the value of advancing DEI efforts within the supply chain. What follows is an excerpt from that conversation.

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Nancy: Bill, can you share why you believe supplier diversity is so important?

Bill: Supplier diversity needs to be part of a broader strategy for organizations. When I think about supplier diversity, it's about creating wealth within the communities you serve from a healthcare perspective. And by creating this wealth and creating jobs, we’re able to address inequities like insurance inequities, housing inequities and food stability. Beyond this, supplier diversity can:

  • Promote innovation, talent and experience.
  • Drive competition from a strategic sourcing perspective, which ultimately can improve quality and drive down cost.
  • Improve and advance the health and well-being in the communities we serve as healthcare institutions.

Incredibly important elements and why it's so important here at Henry Ford.

Nancy: Let’s dig into actual actions. What is your diversity strategy, Bill?

Bill: When I think about supplier diversity and the importance it should have for an organization ─ this is not strictly a supply chain initiative. Supply chains might be the quarterbacks for your organization, but diversity needs to be an-everyone action and imperative. When I think about why it's so special and why Henry Ford has been so successful, it’s because supplier diversity is built into our culture and the DNA of our leaders.

And, I’d be remiss to not talk about the broader DEI strategic plan for Henry Ford, which was just rolled out recently. It has four pillars:

  1. Anti-racism and social justice advocacy;
  2. Diverse workforce and inclusive culture;
  3. Healthcare equity; and
  4. Community empowerment.

And to make sure you have buy-in up and down throughout your organization is what helps to make these things successful.

But when I focus specifically on supplier diversity, we have a couple of core elements to our strategy. One thing that I'm proud of and I think we've done a nice job on is investments. We've invested in a laundry co-op, which has created jobs here in Detroit. But we've also invested in different partnerships ─ and how we bring jobs back to Detroit.

One is called CEO Action, an initiative that’s industry agnostic and focused on how we advance healthcare equity and inclusion throughout different organizations via ESG strategies, public policy and commitment. We sent one of our supply chain leaders to join their fellowship and help develop techniques and strategies that fit a broader landscape beyond healthcare.

We are also part of the Health Action Network (HAN) membership that was created by 40 providers, Henry Ford being one of them, with the core goal of advancing health equity through supplier diversity and sustainability. And we were one of 12 organizations that had signed pledges around commitments around our supplier diversity spend.

We also created our supplier diversity champion committee – and back to my statement earlier that supplier diversity is not strictly a supply chain initiative. This is a committee made up of different senior leaders across the organization, committed to advancing supplier diversity.

Then there’s our tech and benchmarking. We recently invested in a tool to help us benchmark and develop a pipeline for diverse suppliers. We have a 12 percent spend goal with diverse suppliers – one that we feel is an aggressive goal.

Nancy: Tracy, anything to add regarding the strategy and approach?

Tracy: I think what's important is to set those goals and to ensure that you have the committee in place to not only ensure that we're all in alignment and that we understand the ‘why’, but also to develop the strategies around ‘how’. How are we going to really work that pipeline like Bill described? Because for us at Henry Ford, the key is to not only set the goals, but also figure out and strategize what key areas we can influence the most.

Nancy: Can you speak more about implementing these strategies? I'm sure it's a very multipronged approach.

Bill: Our supplier diversity champion committee is one of the key teams accountable for promoting supplier diversity throughout the organization, and really executing a lot of these goals. As far as the organization's concerned, you know, goal setting is number one. We’ve set goals around spend, inclusion and supplier diversity – but one critical area we’re working on now is how we set functional area goals.

Supplier diversity and spend categories are not built the same, meaning when you look at a category like pharma, most of your pharma's purchased from a tier one supplier that's publicly traded and can't be considered diverse. The goal there isn’t going to be as high as it might be in construction. We’re working through that right now ─ how we set functional area goals owned by different leaders to say, “Here's how we hit our targets.” That’s a key element of that supplier diversity champion.

And we’re hosting community events. We just did our first one in our Jackson community and partnered with Pure Michigan on a virtual webinar, which was one of their most highly attended events this year. We had over 200 diverse and small businesses attend, and we did targeted meetings with about 60 vendors so we could understand the portfolio, products and services they offer and then make sure that we can get them into the RFP process when that time comes. We're going to do that in every one of our communities where we have a large presence.

We’ve also partnered with a large insurance provider here in the state, and we’re hosting education meetings every other month. We've brought in different investment individuals to discuss how to get loans, and we've also brought in people to discuss how you can tap into free resources offered. We've gotten a lot of positive feedback from our diverse suppliers on those education events.

I happen to be co-chairing our supplier diversity task force through our GPO, which is Premier. And we're looking at how, as an industry, we continue to push the envelope with our vendors. For example, tier one is only one element to diverse spend ─ but if you look at tier two spend or even tier three spend, those are critical areas where we need to make sure our partners are taking the right steps with their ESG strategies, with their supplier diversity strategies to continue to promote this.

If Henry Ford just focuses on our million dollars to spend, we're missing the billions of dollars the industry commands that can really make a difference in creating wealth in these historically marginalized communities. You need to push the envelope and bring everyone along.

Nancy: Let's talk about goals and metrics. What exactly are you tracking and why?

Bill: This is honestly one of the harder things to accomplish when it comes to supplier diversity metrics, because it depends on how you define supplier diversity.

Here at Henry Ford, we’ll do business with any suppliers that bring quality, cost-effective products and value to our organization. However, to be considered diverse in the eyes of Henry Ford, suppliers need to be certified through one of the national certification committees, whether it's a national minority development council, women council, etc.

We count our minority- and women-owned tier one spends, and that’s where we have the 12 percent goal. However, we have a separate goal for construction. Construction is a little bit different. That goal is both tier one and tier two, and we have a different target up through 2025 for that.

Another one we're working on tracking is tier two spend across all of our vendors. As I mentioned, we’ve invested in that analytics tool. We're starting to ask our key suppliers, diverse or not, to start submitting their diversity data so we can better track that.

Spend is an important metric, but just spending the dollars is not good enough. The other critical metric we've been tracking is diverse supplier inclusion ─ who we’re including in our RFPs and bids. We have targets for that, and we also have targets for what percentage we award. It’s quantitative, but also qualitative in that we’re actually doing what we say we’re going to do. Those are some of the key metrics on our scorecard.

And we recently just hired an analytics leader, not specifically for supplier diversity, but for supply chain. That's working through how we map this and put this in a more easily digestible format, not only for supply chain, but for our customers, our team members and our leaders that are part of some of these committees accountable for making things happen. I think that visibility long term will certainly help us push the envelope more and more.

Nancy: I’m going to turn the conversation to talking about how you find diverse suppliers. Tracy, can you speak about how you source diverse suppliers and how you track things?

Tracy: One of the key ways that we find diverse suppliers is by using our analytics solution. For example, if we’re going to one of those events in the community, we’re not only gathering information from them on the opportunities that exist at Henry Ford ─ we’re following up and sending diverse suppliers a link to our vendor profile. This gives them the opportunity to go in and register on our vendor profile as well as provide more about their capabilities, their diversity status and their tier two commitment. This process gives us a really good way to uncover those suppliers.

Another way we find diverse suppliers is ensuring that our contract sourcing specialists are really connected to our supplier diversity team; connecting to understand what other resources are available, as well as working with our other supplier resources to uncover areas in particular geographies that would meet our requirements.

We also spend time listening to our suppliers to understand what is going well and what barriers they're experiencing, so that we can streamline the process to make it more efficient. We continuously tweaking our tool to make sure that when our suppliers are going in, they have an easy way to describe their capabilities in a streamlined format.

Nancy: Do you give them feedback on their performance, even if they were part of a review process and didn't get the contract?

Tracy: Our contract specialists are engaged with those suppliers throughout the entire process and do exactly that. They share feedback with them ─ whether they win the award or don't. We also keep track of those metrics that Bill was describing. We keep track of, for example, if a contract wasn’t awarded to a particular diverse supplier, the reason why. We also keep information to understand the positive impact too, on some of those awards. And we do marketing to share what is working and try to help others really understand what those suppliers’ capabilities, so that we can help to grow appropriately across the Henry Ford Health System, as applicable and as opportunities present themselves.

Bill: One thing to share with our listeners ─ if you are a diverse supplier, make sure you're asking for that feedback if you didn’t win the award. For any other healthcare providers or anyone seeking to do business with diverse suppliers, be open and be transparent with them and say, “Here's why you didn’t win that bid.” Folks get better through constructive feedback. That’s something we're committed to here at Henry Ford.

Nancy: Clearly Henry Ford Health System is a leader in this area and many of our listeners will be thinking ─ how do I get here? Could you give some tips on how hospitals could start to set things up to optimize success?

Bill: From an organizational perspective, supply chain has our strategic sourcing pillar, and we have our operations pillar ─ but the new pillar we just invested in is a vice president of supplier diversity in place-based investments. We’re working through putting some dedicated folks on that individual's team, which we’re really excited about. How they interact with our strategic sourcing pillar and our operations pillar supply chain is critical.

Another thing we're thinking about is how we’re setting up our award criteria. Criteria can shift based on what you're strategically sourcing, but we're putting supplier diversity up there with quality and cost as far as critical elements of what must be part of a vendor bid package to Henry Ford. And again, I've already talked about the analytics platforms we've invested in.

Overall, diversity can't be something you do on the side. It must be something you make a concerted effort toward ─ organizationally, timewise, etc. ─ if you want to make this a priority and advance beyond just hitting a couple of home runs with a couple of large awards.

Tracy: One of the things I feel like organizations miss is that sometimes there are folks that may not understand why diversity is important and how to articulate it. Just a one- to-two-minute elevator speech on the importance of supplier diversity to your organization. It helps when people feel like they understand how they connect to that work and how it makes a difference when they are presented with an opportunity to have a conversation with a supplier, or to articulate that internally to another colleague.

At Henry Ford, that’s something that everyone understands – how this is about creating wealth and health in our communities. It's not just about the numbers, but it's really about the outcomes that we're seeing by working together.