Hospital supply distributor gains WISDOM -- Extranet forms middle links in the chain

Richmond, VA-based Owens & Minor is a major distributor of medical and surgical supplies. The company has developed a supply chain extranet for customers, suppliers and partners that allows each to tap into product information from Owens & Minor's data warehouse.

The online system, WebIntelligence Supporting Decisions from Owens & Minor (WISDOM), is built on Business Objects' business intelligence tool, Web Intelligence. WISDOM sits on top of the company's data warehouse and is accessed by both customers and suppliers for reporting and analysis of customer sales, product inventory, contracts, pricing, orders and shipments.

"As a distributor, Owens & Minor has valuable information to share with both ends of the supply chain--our hospital facility customers and our suppliers," said Don Stoller, director of information management at Owens & Minor. "From the supplier's point of view, over our extranet they are able to analyze how their products are selling among more than 4,000 customers. They also can see what products are in our inventory but not selling. This can reduce inventory levels in our warehouses."

Stoller said that the greatest value to the suppliers using WISDOM comes from the extranet's reporting function. "This allows them to see how they compare to the competition within the product categories," Stoller said. To protect each supplier's privacy, competitors are kept anonymous, yet information can be viewed all the way down to specific hospital facility.

According to Stoller, WISDOM has offered customers an online decision support tool to better understand their expenses and ultimately improve their business practices. They can track ordering patterns to look for ways to consolidate orders, and by analyzing purchasing patterns across multiple facilities, identify opportunities for product standardization. They can also find out where the best opportunities exist for non-contract purchases.

"We have been constantly reducing inventory levels through our DSS (decision support system) over the past two years," said Stoller. "This may be something that is done more proactively by our suppliers (in the future), but at this point it is too early to tell because many of our suppliers are just coming on board."

Asked if the company is becoming as much a consultant as a distributor, Stoller said, "Owens & Minor has always been looked at as a very good box mover, and we are changing our image to include technology and logistic consulting."