Case Study

Cornerstone Healthcare Group Improves Purchasing Processes and Data with Centralized Inventory Management Software

Cornerstone Healthcare Group offers:

18 long-term acute care hospitals

8 senior living communities

1 skilled nursing facility

1 behavioral health hospital

1 home health and hospice agency

Healthcare organizations, especially those with multiple locations, often realize significant benefits by centralizing procurement though a single platform. That’s what Cornerstone Healthcare Group discovered when it turned to Envi®, an innovative inventory management and procurement software by Inventory Optimization Solutions (IOS), a Provista company.

Founded in 1990, Cornerstone provides three services: specialty hospitals, senior living and behavioral health. The Dallas-based organization prides itself on its quality of care. A couple of years ago, Cornerstone realized it had 18 item masters—records of important information about inventory items—across 18 facilities nationwide. This presented multiple challenges:

  • Lack of visibility into centralized buying, which negatively affected sourcing and reporting.
  • A procurement system that wasn’t user-friendly or intuitive.
  • The creation of purchase orders (POs) and other processes were time consuming.

To solve these issues, Cornerstone implemented Envi. It used a staggered approach to roll out the software, starting in August 2016 with a behavioral health facility. As successes and benefits accumulated, the platform was strategically implemented across all 18 long-term acute care hospitals from April 2017 through August 2017.    

Achieving Strategic Goals and Initiatives 

Cornerstone’s previous system was not user-friendly. Sourcing purchases, extracting data and running reports were problematic, which made supporting cost-savings initiatives difficult.

“Our goal was to have a system in place to streamline purchasing,” says Luis Martinez, vice president of Supply Chain for Cornerstone. “We wanted to have visibility into a single item master so we could control some of the goals we have, such as formulary development, contract compliance and controlled spend.”

Envi allows Cornerstone to centralize purchasing, address inventory in a user-friendly manner and have accurate information. These benefits extend to all locations. A centralized platform also enables a single data entry, like entering a price for an item, to be updated across all facilities.

“With Envi, we have the ability to show costs on a granular level. This is not only coming from corporate, but also from materials managers who can pull the information and have talking points to give to their CEOs and review with them where they’re spending money.”

—Cameron Gummer, corporate purchasing director for Cornerstone. 

 “We needed the functionality to export the item master and have a robust set of reports,” explains Cameron Gummer, corporate purchasing director for Cornerstone.“The reporting functionality has changed the world we live in as far as being able to share information with our CEOs at the local level. With Envi, we have the ability to show costs on a granular level. This is not only coming from corporate, but also from materials managers who can pull the information and have talking points to give to their CEOs and review with them where they’re spending money.”

Pain-Free Implementation is an Ah-Ha Moment

Gummer admits she was worried about hitting roadblocks during implementation. “I assumed it would be a difficult process,” she says. “I was utterly shocked at how easy and simple it was, and how quickly our materials managers adapted to using it.”

Martinez agrees. “We had an aggressive timeline to roll this out,” he notes. “Honestly, I can’t think of a time where something didn’t go right.”

They credit the success to strong communication throughout the process. “The Provista team was great at communicating and were always there to help,” Gummer says. “We have strategic plans, and they’re part of that strategy. It’s a really great partnership.”

Provista Enables New Process Improvements

At the same time Cornerstone switched to Envi, it also began using the procurement services offered by Provista, the organization’s group purchasing organization (GPO) that was providing best-in-class contract pricing and supply chain solutions. Provista, in conjunction with IOS, has a procurement team in place that has the ability to issue purchase orders (POs), which makes life much easier for materials managers.

“Our materials managers were issuing POs. Now they just issue order entries in Envi,” Gummer says. “Provista takes those order entries and issues the PO to the vendor. This gives materials managers time back in their day so they can focus on other areas.”

Another benefit is the ability to physically scan entries, rather than the old method of writing down item numbers, which has slashed time spent on this process by 40%. In addition, Provista notifies Cornerstone of backorders and can recommend product substitutions. The Envi technology also lets users quickly see any pricing not on contract. This helps drive contract utilization.

“One big lever that we pulled last year was price alignment services with Provista,” Martinez adds. “The team monitored spend on a regular basis, checking POs against contracts and making sure we had correct pricing. They identified the credits we were due, mainly from the distributor end. Those were large credits we were getting back.”

“We can walk into any meeting and feel confident in our data, whether it’s receipts history or a certain category of spend. This is huge because it gives our department credibility.”

Luis Martinez, vice president of Supply Chain for Cornerstone.  

Technology and Expertise Solve Problems

Using Envi and working with Provista solved Cornerstone’s procurement pain points and enabled new capabilities:

  • A user-friendly platform simplifies the PO process, tracking inventory and reporting.
  • Strategic sourcing via a single platform is helping Cornerstone realize its vision of centralized procurement.
  • Drive savings through several key initiatives, including contract utilization, formulary development and management, and inventory reduction.

One of Cornerstone’s current goals is to move toward a single formulary. “Envi allows us to put a foundation in place for identifying things that are on formulary, not on formulary and de-activate things we shouldn’t be purchasing,” Martinez notes. 

Envi also gives Martinez and others peace of mind that they can trust their data. Local materials managers can now leverage data sets when meeting with CEOs, while dashboards and pricing visibility are provided from the Dallas corporate offices.

“Not only can we pull data quickly, we also have a high level of confidence that it’s correct,” he points out. “We can walk into any meeting and feel confident in our data, whether it’s receipts history or a certain category of spend. This is huge because it gives our department credibility when we’re having discussion with accounting, the executive team, or whoever it may be, that we’re a reliable source of information. That wasn’t the case with the previous system.”

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