EP 38 – Northwestern Medicine’s Gary Fennessy on the Shift to Partnership-Based Healthcare Procurement

Welcome to the inaugural episode of Smarter Sourcing: Healthcare, with host Eric O’Daffer. Gary Fennessy, VP & Chief Supply Chain Executive at Northwestern Medicine, has been NM's Chief Supply Chain Officer for over 20 years and brings 44 years of industry experience navigating the transformation from a single academic hospital to a multi-site health system. His operational approach during COVID-19 kept Northwestern "two steps ahead of the bear," maintaining full supply availability when other systems faced shortages. That success came from years of building procurement infrastructure and distributor partnerships that most executives overlook until crisis hits.

Gary's leadership development philosophy of "throw you in the deep end but never let you drown" has produced chief supply chain officers now leading major health systems, along with multiple CFOs who came up through his finance and operations teams. He identifies shadow supply chain areas like pharmacy and lab as the next major opportunity for cost reduction, noting that indirect spend now delivers bigger returns than traditional medical supply optimization. His candid admission about delegating AI leadership to his team while timing retirement around the next ERP implementation offers a realistic view of generational transition in healthcare supply chain.

Topics discussed:

• Navigating 44-year healthcare career progression from accounting through finance and operations into corporate leadership

• Managing M&A expansion integrating multiple community health systems into academic medical center operations framework

• Building procurement infrastructure that maintained full supply availability during COVID-19 by staying "two steps ahead of the bear"

• Transitioning from hard-nosed vendor negotiations to collaborative partnership model with distributors, GPOs, and tech providers

• Identifying shadow supply chain opportunities in pharmacy, lab, facilities, and indirect spend categories as next frontier for savings

• Developing leadership talent through "throw them in deep end but never let them drown" philosophy

• Delegating AI and rapid technology adoption to next generation while planning retirement timeline around ERP implementation cycles

• Establishing executive credibility by delivering value through foundational work