EP 42 - St. Luke's Adrian Wengert on Embedding Medical Directors to Find Cost Savings Buyers Miss

St. Luke’s Health System built a 330,000 square foot consolidated service center with an ASRS featuring 28 automated pickers and nearly 20,000 bins. Adrian Wengert, CSCO & VP of Supply Chain, spent 3 years visiting a dozen health systems before construction, extracting one unanimous lesson: every organization regretted not building bigger. He secured board approval for initially unused space by extending their 10-year pro forma, arguing future expansion would cost significantly more than justifying empty square footage upfront.The automation investment directly addressed Boise's labor market, where three Amazon distribution centers compete for the same warehouse talent.

Facing inflation that has grown fourfold with vendors embedding anticipatory tariffs, St. Luke's is pursuing direct manufacturer relationships, bulk pre-buys, channel fee negotiations, market share consolidation with fewer suppliers, and e-auctions to counter double-digit quarterly supply cost increases. Their clinical integration includes a medical director in supply chain who uncovers opportunities traditional teams miss. Sustainability investments include reusable sharps containers, solar-ready infrastructure for 2 megawatts to power the building and electric vehicle fleet, and blue wrap reduction.

Topics discussed:

• Building 330,000 square foot consolidated service centers larger than needed by extending 10-year pro formas to justify unused space

• Implementing automatic storage and retrieval systems with automated pickers to combat Amazon's labor market saturation

• Integrating tech vendors for goods-to-person automation while managing interface complexity and validation during warehouse implementations

• Unifying supply chain and pharmacy operations infrastructures to reduce transportation costs and create operational efficiencies

• Combating fourfold inflation growth through direct manufacturer relationships, bulk pre-buys, channel fee negotiations, and e-auctions

• Embedding medical directors within supply chain teams to uncover clinical cost reduction opportunities traditional buyers miss

• Deploying contract lifecycle management tools with AI to monitor market share commitments and proactively signal deviations

• Implementing reusable sharps containers, solar-ready infrastructure, and electric vehicle fleet transitions for sustainability ROI