From the Sunshine State to Improving the Supply Chain

After discovering a passion for supply chain management while on vacation, Matt McGraw is now bringing an abundance of innovation to OSF HealthCare System

Matt McGraw has a funny way of relaxing. “I’m probably one of the only people in the country that fell into my healthcare career while vacationing in Naples, Florida,” McGraw says with a laugh.

It is true, though. The now-vice president of supply chain integration for Peoria, Illinois-based OSF HealthCare System had to take some time off a few years ago, and he decided to accompany his father—an engineering and construction professional for a large healthcare organization—who had a new hospital to build in the Sunshine State. That vacation would ultimately showcase McGraw’s more salient qualities and jumpstart a career in supply chain, where McGraw’s passion and willingness to get dirty has been anything but relaxing.

While most people heading to Florida would have seen fit to set up shop on a beachfront for days on end, McGraw quickly found himself looking for something to do. He asked to head in to work with his father and volunteered to work for free. As he was helping the supply chain group haul equipment into the new hospital, McGraw had a chance encounter with the senior vice president of support services, who asked him if he had given any thought to getting involved in healthcare.

Matt McGraw, OSF HealthCare System

“He didn’t know anything about me other than I was willing to come in and work without being compensated,” McGraw says. “Based on that, he was willing to take a chance.” McGraw soon moved to Naples to begin learning the industry.

McGraw believes that slowly working his way into new roles provided him not only a fundamental set of skills on the way up, but also incentivized him to continue his education. “Every position a person holds needs to be a stepping stone,” he says. “Whatever direction you’re going—up, laterally, or changing all together—you have to continue to learn.”

And McGraw’s interest and passion for supply chain couldn’t have come at a better time. “Supply chain is really coming into its golden age,” he says. “It’s definitely at the forefront of a lot of conversations right now.” In the wake of declining reimbursement models, fast-paced consolidation, and the search for a sustainable cost structure, McGraw sees supply chain in prime position to bear the weight and continue to find solutions for constant financial challenges in healthcare on the whole. “Financial challenges have created a burning platform for supply chain,” McGraw says. “Declining revenues mean you get a captive audience when you’re searching out supply-related savings.” Supply chain has found itself in the C-suite, and McGraw seems primed for the challenge.

As one of Healthcare Purchasing News’ Elite 8, a distinction recognizing supply chain operations worth watching, McGraw has reasons to be energized. Along with more traditional functions, OSF is continually seeking innovative methods to make supply chain a revenue center. That includes managing a supply chain collaborative of 20–30 healthcare entities not actually owned by OSF. Through a partnership with OSF’s purchasing organization, Premier Inc., OSF is able to secure those independent healthcare entities at discounted costs that it would not be able to obtain on its own.

The partnership with Premier has further-reaching revenue implications as well. OSF will act as a licensed implementer for Premier’s enterprise resource planning (ERP) system. OSF’s partnership with Premier and successful implementation of the ERP software has helped net savings of about $32 million since January 2016, and McGraw sees the success as one to leverage. “Because we have operational knowledge of that software and we’re supply chain and finance people, it makes for better implementation of the product,” he says.

The implementation of the new Premier ERP system is part of OSF’s system-wide functional transformation. The ERP has enabled McGraw’s team to condense the system implementation time from nearly six months to between forty-five and sixty days and on-site deployment support to fewer than two weeks. McGraw sees the benefits as
multifaceted. It doesn’t wrap up resources. Instead, it’s its own advertisement for OSF’s implementation services, and as OSF continues to acquire new hospitals, it has standardized a process that is now easily repeatable. Its ease of access to data serves to further enhance Premier’s benefits.

“The system is bringing visibility to our data and putting it at the fingertips of users,” McGraw says. 

OSF’s plans to open a consolidated services center in Peoria will only further reinforce supply chain’s continued and expanding role in generating revenue. The 75,000 square feet of office space and 270,000 square feet of warehouse space will include consolidated administrative operations teams and more. It’s yet another project that may not have concerned supply chain in the past, but now has the department’s full attention.

McGraw says the potential seems limitless, and those prospects seem to carry extra weight coming from someone who discovered his livelihood while he was supposed to be vacationing.

A New Kind of Revenue Center

OSF is still in the early stages of developing a consolidated services center on the north side of Peoria, Illinois, but regardless of the specifics, Matt McGraw says it’s going to dramatically change the supply chain.

The fifty-acre campus “will allow OSF HealthCare to consolidate administrative operations teams that work closely with each other, including human resources, accounts payable, finance, facilities management and construction, pharmacy, and supply chain,” according to OSF. Additional services being considered include internal self-distribution, pharmacological distribution, sterile processing operations for surgical instruments, custom pack building for surgical packs, and food preparation and distribution services.

Photo by Jim Carlson/OSF HealthCare System