Late last year, Gartner released its sixth annual Healthcare Supply Chain Top 25 ranking. The 2014 ranking identifies organizations across the value chain that are focused on reducing supply chain inefficiencies, while improving the quality of healthcare. Healthcare supply chain leaders continue to optimize their capabilities, while preparing for changes that population health models will drive through the supply chain.

“The Healthcare Supply Chain Top 25 for 2014 reflects the metaphorical middle part of a marathon journey to build patient-driven supply networks,” said Eric O’Daffer, research vice president at Gartner.

“The participants know the route, but the excitement of the starting line has worn off and a few aches and pains have set in,” O’Daffer added. “Each company knows the real pain is coming later in the race, and that the only path is forward — there is no going back.”

Leading the Way

Cardinal Health retained the top spot in the Healthcare Supply Chain Top 25 for the fourth consecutive year, despite facing stiff headwinds as it absorbed the loss of $25 billion in business at Walgreens. Cardinal continues to have the widest breadth of any company in healthcare.

Cardinal is a manufacturer, wholesaler, distributor, retail pharmacy and a connector at many points in between. Cardinal continues its heritage of customer collaboration, especially in medical products distribution by further integrating the acquisition of home healthcare company, AssuraMed, and, in 2014, getting deeper in medical devices through the $320 million acquisition of AccessClosure.

In the No. 2 spot for the third year in a row, Mayo Foundation is a model of consistency, combining the balance of high quality of healthcare scores and solid bond rating with top echelon peer and analyst scores. Mayo continues to demonstrate leadership in the healthcare value chain by retaining and developing top talent.

Mayo’s Clinical Care Network group has successfully linked value in supply chain to quality and controlled cost of patient care. The company’s refresh of its strategic plan in 2014 also shows that the organization is not resting on its achievements.

Intermountain Healthcare climbs one spot into the No. 3 position in the rankings based on continued peer and analyst recognition of its capabilities. In addition, Intermountain Healthcare has a tremendous bond rating and solid quality-of-care scores.

Intermountain represents one of the closest things to a literal “City on a Hill” in the world of healthcare providers. This is achieved through Intermountain’s $40 million investment in its supply chain center.

“Discipline to stay the course and incrementally build capabilities are the hallmarks of companies on this year’s ranking,” O’Daffer said.

“Companies near the top differentiate themselves by realizing that core capabilities are necessary but not sufficient, so they look for innovation,” O’Daffer added. “Organizations that retain talent and keep a focus on how supply chain supports their organization’s mission and aligns with the business strategy are the ones that are able to sustain excellence in their supply chain.”

High Performance

O’Daffer said that making it into the Top 25 ranking takes strong quantitative performance along with recognition of peers and analysts. With 21 of 25 organizations repeating from Gartner’s 2013 study, consistency and capabilities resonate, but innovation is also critical in elevating companies near the top of the list.

Consolidation has been a well-documented trend of healthcare providers for some time; however, manufacturers have joined in mergers and acquisitions (M&A) in 2014 in full force.

These manufacturers seek to be indispensable to providers and find complementary product lines that can help them impact care at their largest integrated delivery networks (IDNs). In addition, it also  appears that the big deals seem to be getting even bigger as organizations across the value chain realize the many benefits of scale in their relationships.

More detailed analysis is available in the report “The Healthcare Supply Chain Top 25 for 2014.” The report is available at