The New Jersey health system is minimizing redundancies, reducing inventory and standardizing product lines.
By Daniel Beaird
HealthTrust Performance Group bestowed one of its highest honors on Marlton, N.J.-based Virtua Health last August with its Operational Excellence Award for revamping its warehouse operations by minimizing inventory redundancies, reducing expired inventory and standardizing product lines. The academic health system’s presence in South Jersey includes five hospitals, more than 400 locations, seven emergency departments and eight urgent care centers.
Virtua partners with Penn Medicine for both cancer care and neurosurgery, while clinicians from the Children’s Hospital of Philadelphia provide pediatric care to kids and newborns at Virtua. The Journal of Healthcare Contracting (JHC) spoke with Ana Victoria Sanchez, vice president of Supply Chain and Support Services for Virtua, about its warehouse improvements that resulted in increased efficiency, resiliency and streamlined workflows.
“When I came on board about two years ago, we had gotten to that critical mass state of 2,500 items at our warehouse, but with the expectation to reach 5,000 SKUs in a short period of time,” Sanchez said. “We were using an ERP rather than a warehouse management system, so we implemented a five-year plan that included a warehouse management system.”
That was the first piece of technology to support greater volume, modernization and improved efficiency. HealthTrust recognized Virtua for implementing foundational practices ahead of launching its new warehouse management technology system.
The system was implemented last March, Sanchez said, and it took four months to stabilize, but Virtua is seeing the output of productivity, accuracy rate, put away and outbound, and it’s starting to experience enhanced efficiencies between 15-20%.
“We will have the capacity to manage over 5,000 SKUs and three times the volume in 75,000 square feet, combining the footprint expansion and the purchase of the Perfect Pick® automated storage and retrieval system that uses iBOT® wireless robots to deliver inventory directly to operators,” she said.
Acute and non-acute
And it’s not just Virtua’s acute settings that the warehouse transformation will help. Eighteen ambulatory surgery centers (ASCs) affiliated with Virtua were recently recognized by Newsweek for being among the best ASCs in the nation in 2025 based on quality of care, performance data, patient experience and peer recommendations.
“We’re also looking to run additional ASC business through our warehouse,” Sanchez said. “These are big aspiring plans and we’re moving quickly as it keeps growing.”
“Think of the time and effort spent by nurse managers having to call procurement to ask, ‘where’s my order,’” Sanchez assessed. “With this warehouse expansion, we will improve the experience of our colleagues by reducing time spent managing and tracking orders. Greater efficiency means greater expansion into medical offices and our joint ventures with ASCs.”
Technology takes center stage on all projects
Virtua has almost 70 supply chain projects happening simultaneously and technology is at the center of them all. An ERP change is scheduled for July and inventory management on nursing floors will go live with it. Perioperative departments will go through clinical inventory management changes, which will enable inventory and consumption accuracy. This will integrate with Epic and begin Virtua’s most expansive hospital work revamp to date. It’s also changing the way it schedules orders to make sure they aren’t delivered during the busiest times on the nursing floors and perioperative departments.
“We started it with the perioperative labs, and we’ll go live with the OR in January at our Camden, N.J., hospital, Virtua Our Lady of Lourdes,” Sanchez said.
Once the ERP and warehouse management systems are implemented across the entire organization, the health system will have visibility into consumption and where everything is at a nursing unit level and department level. “The combination of the technology implementations and warehouse automation investments will yield greater accuracy and throughput, and help to forecast how much growth we can take on in inventory planning. It’s helped us look at the operational and logistics side of the hospital and lay the foundation for the use of AI.”
“Never underestimate the process,” Sanchez added. “You can implement technology, but if it doesn’t align with your process, you won’t get the output from it.”
Supply side data and staff adoption
On the supply chain side, Virtua is working with its GPO – HealthTrust – on resiliency and better visibility from its vendors. It participates in HealthTrust’s technology advisory committee, which is on the journey of linking technology and visibility for better resilience and inventory planning.
“The product information has to be accurate,” Sanchez said. “That’s part of our perioperative inventory system interfacing with Epic. By scanning all items, we have a more robust operative record and that drives additional revenue. The data, the governance, the technology – it’s all like the parts of a complex machine.”
Virtua is also shifting the way it categorizes products from its past standard to the United Nations Standard Products and Services Code® (UNSPSC®). Classifying what’s an implant and what type of implant it is, for example, can greatly help the health system achieve the right kind of data, including mitigating insurance claim denials.
“Supply Chain is often the leader on the data we’re using for clinical decision-making,” she said. “It’s critical to have a change management approach at the mid-management level because they’re the ones who are often on the front lines.”
Sanchez said Virtua’s supply chain team aspires to develop internal talent and recruit external talent with experience in inventory, planning, forecasting and product standardization to manage big data and data governance structure. Internships are also part of the plan to meet the future needs of the organization.
As is often the case, major changes also impacted staff retention. “We experienced a turnover rate of about 25%. We’re not an especially large team, so it was challenging. We incorporated temporary staffing and hired the best performers seeking permanent work. We knew the benefits would outweigh the difficulties.”
New team members and veteran staff can’t imagine going back to the old system. They even enjoy competing with one another on productivity.
“Our team is embracing new ways of working together to best support the organization,” she explained. “One of our goals is to provide that Amazon-level of visibility for clients so that everyone feels informed and empowered every step along the way. There’s no going back to the old ways. Not when the future is so promising.”