Strategies and Tactics for Successful Vendor Management

The real challenge for managers is navigating the complexities of vendor management in order to ensure facilities support high-quality patient care.

By Dan Hounsell, Senior Editor

The array of vendors serving hospitals and other healthcare facilities can seem overwhelming. From suppliers of spare parts and equipment to contractors providing construction and consulting services, facility managers have their hands full ensuring a reliable, cost-effective flow of products and services. 

But managers are hardly the only ones who face challenges in these relationships. 

“One of the first things that comes to mind is the diversity and the different types of spaces we see within healthcare,” says Brad Shokes, managing director of the healthcare division of JLL. “It's controlled by a lot of regulatory requirements, a lot of different requirements for different types of space so that hospitals can be certified to receive reimbursement for Medicare and Medicaid. If it's a behavioral health unit versus an ambulatory surgical center or a medical office building, the uniqueness of the space creates different complexities for vendors.” 

The real challenge for managers is navigating the complexities of vendor management in order to ensure facilities support high-quality patient care. 

Eye on technology 

One critical element in managing the array of vendors in healthcare facilities is ensuring the presence of reliable technology to streamline the process. 

“When we go into help support in a hospital system to help manage their facilities, we bring technology that we typically don't see in healthcare,” Shokes says. “That's not to say that they don't have technology. They do because there's a lot of things beyond the real estate world that they have to manage from a vendor standpoint. Think about all the original equipment manufacturers and the MRI machines and X ray machines and all those types of things. They've got to have a robust program for managing vendors.” 

To effectively support that robust program, managers need to ensure their vendor management software and CMMS use accurate, robust data. 

"Ensuring that you've got the appropriate asset data is something that's extremely important to us on the front end of coming into any engagement that we have with the client,” Shokes says. “We need to understand what assets are within the building, where they're at, their age, what condition they're in, what are the appropriate maintenance routines that we need to have scheduled? That's the type of data that a vendor needs to be able to accurately come in and deliver service.” 

Aggregating success 

Just as healthcare facilities have become more complex in recent years, so has the landscape of vendors offering products and services to support operations. Shokes points to a recent development in this landscape that is creating challenges for managers. 

“One of the things that I've seen, especially as we see the decentralization of healthcare across the country, is the use of aggregators,” he says. “Aggregators are partnering with local and regional supplier networks to try to pull people together through technology, and it sometimes impedes a more unified category solution that our supply chain folks can create.” 

In the aggregator business model, the aggregator firm collects information about particular providers, signs contracts with these providers and sells their services under its own brand to healthcare facilities. 

“We do often use (aggregators) to manage work because it's easier to use an aggregator than to have 50 different suppliers and 50 different locations,” he says. “There is an absolute important purpose and value to using an aggregator network, but it becomes that much more complicated in a hospital or ambulatory setting because the expectation for performance, the understanding of healthcare and the quality is much higher, and (aggregators) tend to be more focused on getting somebody out there to fix the problem.” 

One particular challenge for managers in working with aggregators can be ensuring consistency of service. 

“We don't know who's going to show up, and it could be a different person each time,” he says. “There's a need for that in certain areas of real estate. I just have a real concern with that in the healthcare space if they don't have a group that is specifically catered toward understanding that sector.” 

Avoiding mistakes 

Given the complexity of vendor management in healthcare facilities, mistakes are inevitable, and they are not all tied to the actual products and services. Many involve the need for managers to address the human side of the process. 

“One of the first things that comes to mind is making sure that we don't treat our suppliers or vendors poorly,” Shokes says. “These are people that we have formed strong strategic partnerships with, and it's important to make sure that you understand that you've got to have common goals that are going to best allow hospitals to serve patients and create a wonderful patient experience now.  

“Don't have a use-and-abuse relationship with your vendors. Make sure that you're developing good relationships with your partners and your suppliers to ensure that you're delivering the best outcomes for your clients. In some cases, facility managers are new to the FM role, or they’re new to the hospital, and if it's not managed well, they're going to have to go through this three- to six-month training period, which is going to cause disruption as it relates to their relationships with their partners.” 

Partnership can be the missing element in effective vendor management and the one that managers must work to create. 

“We need to develop trust with our suppliers and our partners that are going to be on site,” Shokes says. “I want these people to expect that they're going to treat that building as if it's theirs. I want them to walk through that building and identify safety issues. I want them to escalate those to the real estate teams. I want to make sure that we're getting the most out of them because they are partners, and they want to be there and want to help. 

“How does our service delivery align with goals to ensure that our vendors are aligned with the goals of the healthcare organization? You get a lot more out of your providers if you ensure that they're aligned with the goals of the organization.” 

Dan Hounsell is senior editor of the facilities market. He has more than 30 years of experience writing about facilities maintenance, engineering and management. 

June 21, 2023

Topic Area: Maintenance and Operations

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