True North: A Commitment to Advancing Excellence in the Healthcare Supply Chain
Last April, I retired from Gartner. I believed I had contributed what I could. The plan was simple: ride my bike, travel with my wife, hang with our adult kids, and get more sleep. I didn’t feel old. Family and friends were supportive. It seemed like the right time.
And then a number of companies approached me.
Those conversations forced a reckoning. If you’re going to do something in the last chapter of your career, what is it going to be? Where can you still make a difference? What are you passionate about?
A few years ago, I asked a slightly older friend and colleague what made him think about retirement. He said, “Chronological age, I guess.” He’s still working today. Still contributing. Still shaping the healthcare supply chain well beyond the standard retirement age. He remains one of my heroes.
My thoughts on this phase of life were influenced by Jim Collins’s “Good to Great” and the idea of marrying your passions with your skill set. Retirement has the advantage of letting you worry less about income and more about impact. My adult daughter points out that “true north” is singular by definition, so perhaps my true north is simply helping advance excellence in the healthcare supply chain. Here are the three ways we do that:
Improving Large, Historically Under-addressed Spend Categories
With the financial pressure facing health systems, this is the most practical and immediate opportunity for impact.
Indirect spend and purchased services remain the biggest example. This category often accounts for more than 20% of net patient revenue, yet it is fragmented and inconsistently governed. I wrote about this space more than 15 years ago and have watched health systems struggle to sustain gains. Services do not come in boxes. They span hundreds of categories and are driven by utilization, rate structures, performance expectations, and even the financial viability of vendors. In many organizations, this spend is managed by shadow supply chains embedded in departments. At scale, regional variation further complicates governance and sourcing.
What gives me optimism now is the emergence of more integrated approaches that combine subject matter expertise, disciplined governance, benchmarks from outside of healthcare, and enabling technology. Sustainable improvement in this area requires all of those elements working together. Given current margin realities, this category cannot remain secondary.
Doubling Investment in Technology and Artificial Intelligence in the Healthcare Supply Chain
If history is any guide, healthcare will lag other industries in adopting transformative supply chain technology unless we act deliberately. We are already under-invested in supply chain resources overall and especially in analytics and dedicated technology talent. That gap will only widen if it is not addressed.
AI and advanced platforms are not theoretical. They can help identify variation in purchased services, detect contract leakage, predict supply disruption risk, improve demand forecasting, and optimize inventory and logistics decisions. Other industries have embedded these capabilities into daily operations. The healthcare supply chain has enormous upside if we are willing to invest. My view is simple: health systems should be thinking about doubling their current investment in supply chain technology and AI-enabled capabilities, supported by a right-sized supply chain organization.
Improving the Measure of Excellence
As an industry, we are still early in defining what supply chain excellence truly means. We have benchmarking, but it is often fragmented. Definitions vary. Metrics capture pieces of performance but not the whole. Too often, we measure savings in isolation from capability. The next iteration has to be broader and more disciplined. It should include all supply chain–influenced spend, be consistently defined and auditable, and combine hard performance outcomes with an honest assessment of capabilities.
Two organizations can report similar savings percentages, yet one may have strong governance, clinician alignment, analytics infrastructure, and resiliency planning that make those results sustainable. The other may not. Without incorporating both measurable results and demonstrated capabilities, we don’t get a true picture of maturity. Leaders deserve clear answers to “How do I stack up against my peers?” and just as importantly, “What should I do next to create more value for my health system?” Organizations that operate within data-sharing ecosystems already have an advantage. Transparency and consistency will raise the standard for everyone.
Moving from an independent research role into one that supports specific company development has at times felt like having a foot in two canoes. But progress requires making informed predictions about where the industry needs to go. So far, I feel good about the choices I’ve made.
The healthcare supply chain has proven its importance. The next step is improving its maturity. I may have tried to retire, but purpose has a way of pulling you back in. For now, I’m following my version of true north, focused on being useful and helping advance excellence in the healthcare supply chain.
About the Author
Eric O’Daffer
Strategic Advisor, Healthcare and Life Sciences
Eric O’Daffer is a strategic advisor in healthcare and life sciences at LogicSource, bringing more than 20 years of industry experience. He previously spent 15 years at Gartner as vice president of healthcare supply chain, where he served as a trusted advisor and helped launch the Gartner Healthcare Supply Chain Top 25, a leading benchmark for supply chain excellence.