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Steve Gray

Advancing the Profession/Industry Influence

Steve Gray was one of the first pioneers and advocates of supply chain management in the provider sector of the industry. Starting in the late 1960s, he applied Industrial Engineering methods materials management in order to optimize operations efficiency and for use in facilities planning. He actually developed the first engineered formulas for determining space requirements and for staffing as well. This replaced the “rule of thumb” and experiential-based means of determining supply chain resource requirements, significantly raising the bar and adding “science” to the art of supply chain management. His consulting firm, Chi Systems, published these formulas for hospitals in the US and Canada and also published for a time Hospital Purchasing Management, which later became Hospital Materials Management.

Work Experience

Steve Gray currently serves as a Partner, Healthcare Provider Solutions, at ACS Inc., a Xerox Co., and has more than 40 years of experience as a management consultant to healthcare providers. His primary area of expertise is business and clinical process redesign in hospitals and physician practices for purposes of cost reduction, quality improvement, and new technology implementation, particularly electronic medical records.

He recently restructured a county-wide ambulatory care delivery system, and redesigned all operational processes for the system; managed a process redesign team for system-wide conversion to Meditech at a children’s healthcare system; conducted process redesign analyses for McKesson clinical applications in a multi-site community health system; and redesigned clinician workflow to support implementation of the Eclipsys Sunrise Clinical Manager CPOE application at a university medical center.

Further he is an Educational and Training Program Instructor In TQM, Reengineering, Six Sigma, Supply Chain Management, Middle Manager Time Allocation and Training, Organizational Restructuring, Performance Benchmarking and Improvement, Business Case Preparation and Process Redesign.

His areas of specialization include:

Hospital operations redesign to implement and support electronic medical records
Technology selection and integration to support personal health records
Accountable Care Organization Development, Operations
Emergency Department Operations Improvement, Surgery Department and Operating Room Operations Improvement, and Supply Chain Operations Improvement
Medication System Redesign and Operations Improvement
Value Analysis For New Diagnostic, Treatment, and Information Technology
Developing Information Technology Integration Strategies and Supporting Services Platforms for Physician Groups forming Accountable Care Organizations.

1969: Performed the first quantitative (work sampling) analysis of the Friesen “no-nursing station” design approach at Scarborough Centenary Hospital in Toronto to show the beneficial impact on nursing time allocations of the centralized supply distribution and “nurse server” materials management system incorporated in the Friesen hospital design.

1969: Working with Herman Miller, designed a “nesting bin” handling system for shared laundry and linen distribution systems, successfully implemented in the San Francisco Bay area for 12 hospitals, based in a shared laundry in San Bruno, CA.

1970: Developed and successfully implemented one of the first central distribution centers serving three hospitals in Northwest Ohio, as part of campus redevelopment projects at two of the hospitals. The central distribution center housed other shared services in addition to materials management.

1971: Developed and cost-justified the construction of a 20-bed “prototype” nursing unit incorporating different room designs for evaluation and experimentation during the design of a replacement hospital. One purpose of the prototype unit was to evaluate different supply handling and storage systems, and develop life-cycle cost analyses of each.

1972-1980: Performed numerous life-cycle cost analyses of automated cart and “module” material movement systems for new hospital design and construction projects around the country. Published the first life-cycle cost analysis methodology “Analyzing Capital Investments” in Hospital Purcha$ing Management, Volume 5, Number 9, September 1980.

1982-1985: Developed and tested materials management labor standards for use in numerous operations improvement consulting assignments, primarily performed for academic medical centers and multi-site health systems. Incorporated these materials management standards in all re-engineering projects performed from 1985-1995.

1982: Wrote and published to first detailed quantitative side-by-side labor cost comparison of the exchange cart-PAR stock methodologies for internal supply distribution. “Exchange Cart vs. Par Stock”, Hospital Purcha$ing Management, Volume 7, Number 11, November 1982, and Volume 8, Number 1, January, 1983.

1969-2003: Managed or performed 138 Materials Management and Supply Chain facility design/development, operations improvement, automated distribution, organization structure, value analysis and cost containment, and staffing consulting projects for hospitals in the United States.

Work Performance

Major Health System on the West Coast, Client Services Executive: Provided strategic planning services for six hospitals and corporate, back office planning, and other services.
Large Medical Center on the West Coast, Client Services Executive: Performed system-wide operations assessment; redesigned ambulatory care, ED, OR operations; redesigned HIM management and systems; assisted with miscellaneous IT design and implementation support projects.
Health System in the Midwest, Client Services Executive: Performed radiology function systems redesign (fills/PACS plan).
Community Hospital, Client Services Executive: Provided house-wide organization and productivity benchmarking for all hospital departments.
Hospital on the East Coast, Client Services Executive: Reviewed imaging operations and provided PACS technology planning.
Rehabilitation Center in the Midwest, [Rehab Institute of Chicago; Chicago, IL (1999)Engagement Manager: Redesigned Pharmacy and HIM operations.
University Medical Center in the Southwest, Client Services Executive: Pharmacy operations redesign and implementation (CPOE, decentralized pharmacy); HIM/revenue cycle redesign and implementation (go to paperless environment).
Religious Affiliated Hospital in the Southeast, Client Services Executive: Focused operations improvement for multiple departments, including materials management and imaging.
Medical Center in the Midwest, [Munson Medical Center; Traverse City, MI (1998)]Client Services Executive: Performed ambulatory surgery center feasibility study.
University Medical Center in the Southwest, Client Services Executive: Focused operations improvement for multiple departments and case management.
Hospital in the Southwest, Client Services Executive: Performed system-wide reengineering.
Rehabilitation Center in the South, Client Services Executive: Performed house-wide operations review.
Health Facility on the East Coast, Client Services Executive: Performed multi-site operations integration, including business office systems integration, supply chain redesign, and organization structure redevelopment.
University Health System in the East, Client Services Executive: Performed supply chain redesign and integration for physician practices, faculty practices and clinics, and hospital facilities.
Hospital on the Plains, Client Services Executive: Performed reengineering and labor productivity benchmarking of all hospital departments.
Hospital in the Northwest, Client Services Executive: Materials management systems design and master facility planning.
Religious Affiliated Hospital in the Midwest, Client Services Executive: Performed case management system design.
Medical Center on the West Coast, Client Services Executive: Performed multi-site operations integration for all departments, clinical programs, and organization structure.
Religious Affiliated Hospital in the East, Client Services Executive: Performed house-wide reengineering.
Hospital in the East, Client Services Executive: Performed surgical services operations improvement.
Medical Center in the East, Client Services Executive: Performed house-wide reengineering.
Hospital in the East, Client Services Executive/Engagement Manager: Designed master facility plan for imaging.
Health System in the East, Client Services Executive: Performed system-wide reengineering.
Medical Facility in the Mid-Atlantic Region, Client Services Executive/Engagement Manager: Performed materials management reengineering and TQM manager training.

Professional Activities

Educational credentials include Bachelor’s and Master’s Degrees in Industrial and Operations Engineering from The University of Michigan, Ann Arbor.
Professional activities: Member/past chairperson of American Association of Healthcare Consultants, past board member of Association of Management Consulting Firms, Diplomate of American College of Healthcare Executives; lecturer at University of Michigan and University of Wisconsin Colleges of Engineering; Preceptor for Management Residency for the Program in Hospital and Health Services Management, Northwestern University.
Feature article on benchmarking, Healthcare Informatics, HIMSS issue — February 1999.
Success Factors in Implementing Organizational Restructuring. Managing Change in Healthcare: Innovative Solutions for People-based Organizations. McGraw-Hill —
December 1998.
Co-authored article for Healthcare Informatics HIMSS issue, titled Juggling Act — Six IT Strategies for Managing the IDS into the Next Century— February 1998.
The Second Wave of Healthcare Reengineering: New Focus on Processes and Growth. Russ Coile’s Health Trends. Co-author, June 1997.
Cost Modeling to Justify Technology Acquisitions. Healthcare Financial Management. Co-author, June 1997.
Managed Care’s Impact on Imaging. Decisions in Imaging Economics. Co-author, November/December 1996.
Leaner Management Structures Prepare Hospitals for Change. Health Care Strategic Management — March 1995.
Hospital Cost Containment Through Productivity Management. Van Nostrand
Reinhold — 1987.
Exchange Cart vs. Par Stock, Parts I and II. Hospital Purchasing Management, Volume 7, Number 11, November 1982, and Volume 8, Number 1, January 1983.
Analyzing Capital Investments. Hospital Purchasing Management, Volume 5, Number 9, September 1980.

IN HIS OWN WORDS…

What do you think about Bellwether League Inc.’s mission and philosophy and how do you feel about becoming an Honoree?
Healthcare costs are a leading cause of today’s economic distress, and if not rationalized soon, will cause major dislocations to our healthcare system. A fifth of those costs are associated with healthcare’s supply chain. Bellwether League’s mission and philosophy bring light and recognition to a group of professionals who successfully have been doing their part to manage this segment of healthcare’s rapidly increasing costs. The management science and techniques that supply chain managers have brought to their task remain among the most exemplary in the industry. Bellwether League is, in my opinion, to be congratulated for its focus on supply chain professionals’ contribution to healthcare management.
I am personally surprised, humbled and very honored to be included in Bellwether League’s esteemed group of Honorees.

What attracted and motivated you to join the healthcare supply chain management field when you did?
I had committed to a career in healthcare management engineering in 1966. As we developed our consulting practice, we, as industrial engineers, became aware of the many resource and operational decisions being made in hospitals that did not seem based on quantitative information or analysis. We became engrossed in operations improvement consultation based on our industrial engineering skills. As the industry became heavily invested in new facilities in the early 1970s, we began to apply our quantitative analysis methods to facility planning. At that time, and as part of hospital facility design, supply chain logistics became a major focal point. Shared distribution centers, automated material movement systems, and nursing unit design (no-nursing station concepts, etc.), were ripe for the application of engineering discipline (and consulting services). We leaped into the breach.

For what one contribution would you like to be most remembered?
The introduction of life-cycle costing analysis methodology for capital investments (automated materials movement systems and facilities), HPS, 1980, and HFM, 1997.

If you were to encourage people – either outside of healthcare or just out of school – to enter the supply chain management field and potentially qualify to be a future Bellwether League Inc. Honoree, what would you tell them?
The healthcare industry is a fertile area in which to build a robust and successful career applying modern management science. The provider portion of the industry is the most fertile. Twenty percent of the costs in the provider portion of the industry relate to the supply chain function. There are still major and significant contributions that can be made to improving and restructuring this function. You will not regret considering a career in healthcare supply chain management.

What is the one industry challenge you would like to see solved in your lifetime?
The successful integration of incentives among providers is the selection, use and management of material and equipment resources in the provision of clinical diagnostic and treatment procedures. Accountable care reimbursement and delivery restructuring schemes that are implied by the new healthcare reform legislation are a start in the right direction, but massive analysis and design work remain ahead. Supply chain professionals, having successfully demonstrated their inclination and skill at applying sound management techniques over the years, are well-positioned to lead this effort.

How important is effective and innovative supply chain management during tough economic times?
Effective and innovative supply chain management is critical to healthcare at all times. During tough economic patches, it should be a focal point for healthcare management teams.

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