UPMC cuts costs in the supply chain

UPMC aims to reduce supply chain costs by moving all electronic transactions with suppliers to an electronic data interchange (EDI).

UPMC tapped Ontario, Canada based Toreion Corp. for the technology that makes it possible. Also, aUPMC subsidiary is teaming up with Toreion to further develop and market the technology.

“Toreion’s innovative platform makes it easy and cost-effective for suppliers to do business with us electronically, and it allows our vendors to avoid the high costs of using the standard healthcare-only exchange,” said James Szilagy, chief supply chain officer at UPMC. “With Toreion, we are proving that electronic data exchange in healthcare should be viewed and priced as a commodity, as it is in other established industries, allowing us to focus even more of our resources on world-class patient care.”

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UPMC and its suppliers can exchange data through a variety of methods instead of being forced through a healthcare-only hub. Particularly for suppliers that primarily serve non-health care customers, this approach can avoid the duplication and additional costs of processing transactions through the kind of healthcare-only

EDI platform that is typical in the industry, Szilagy said. The technology helps improve efficiency at UPMC by providing automated email reminders that help track supplier acknowledgments of dispatched purchase orders.

Customized reports are sent daily to UPMC’s buyers, including information on back-orders, price changes and out-of-stock situations, enabling supply chain staff to focus real-time on critical activities without having to use multiple websites and passwords. Also, Toreion’s technology allows suppliers to electronically submit invoices according to customer-specific standards, eliminating paper documents and processing costs.

Based on the savings and improved functionality achieved at UPMC, privately held Toreion and Prodigo Solutions LLC, a wholly owned subsidiary of UPMC, have entered into a co-development and marketing relationship to provide similar benefits to others in the healthcare industry.

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“Together, we will ensure that Toreion’s technology continues to meet the rapidly changing needs of health care providers so that they can better serve their patients,” said Marlin Doner, vice president of corporate development at Toreion.