Reduces Next Day Air Shipments, Increases Vendor Participation and Realizes Significant Cost Savings
Mountain States Health Alliance (MSHA), a not-for-profit health care organization based in Johnson City, Tenn., operates a family of 13 hospitals serving a 29-county, four-state region (Northeast Tennessee, Southwest Virginia, Southeastern Kentucky and Western North Carolina).
Prior to working with TRIOSE, MSHA did not have good visibility of its freight expense and had taken the initiative to implement an internal program to reduce its freight spend. The organization knew there were dollars to be saved, but all 13 hospitals had their own process for managing freight, which made implementing a formal process complicated. MSHA has thousands of vendor partners, but inbound routing instructions to those vendors were inconsistent across the organization due to the large number of locations.
As each location was working under its own internal, self-managed freight management program, vendor participation remained low, outbound shipments were consistently being shipped at unnecessarily high rates and total savings results were hard to measure. The organization as a whole was in need of a dedicated logistics partner and a comprehensive freight management solution across all locations to help consolidate the efforts of all the facilities into meaningful reports that would help the supply chain make informed decisions.
MSHA conducted a comprehensive assessment of its supply chain processes and evaluated a number of logistics companies, including TRIOSE. After performing its due diligence, MSHA ultimately decided to partner with TRIOSE, who collaborated with its supply chain team to implement a tailored freight management solution.
TRIOSE committed to MSHA consolidation of its carrier invoices for streamlined billing, standardized routing instructions and consistent messaging to all vendor partners. The first step was the consolidation of 728 annual carrier invoices down to one single weekly invoice that accurately allocates cost to each location. This enabled TRIOSE to work with MSHA stakeholders and their information system experts in the supply chain to gain system-wide visibility of their total freight expense. TRIOSE was also able to increase vendor participation and over time reduce the number of Next Day Air Shipments to further maximize savings.
“These early efforts of my predecessors is what has laid the groundwork for supply chain to have complete visibility of our inbound freight spend with suppliers, as well as how efficiently we are shipping packages outbound,” said Jessica Denney, corporate purchasing manager at MSHA. “Thanks to TRIOSE’s team of experts who truly excel in customer service and strive for continuous improvement, my team and I are running a tighter ship. We have more vendors participating in our freight program and complete visibility of our freight expense, allowing us to drive more cost savings than we were ever able to realize independently.”
TRIOSE delivered on its promise, managing 77% more inbound freight expense on a system-wide level, implementing streamlined reporting analytics and providing one weekly itemized invoice to accounts payable to bring visibility to the MSHA Corporate Purchasing Team.
Additionally, TRIOSE worked directly with MSHA’s Supply Chain Department to not only identify the priority service level (air) shipments, but also work with the supply chain team to implement a plan to reduce those shipments for even greater savings.
Today, MSHA has reduced its Next Day Air Shipments to 16% by moving those packages to ground for an overall lower shipping cost.
After a year, TRIOSE more than doubled its initial savings projections, saving MSHA approximately $351,000. To date, TRIOSE, in partnership with MSHA, has achieved more than $1.3 million in savings.