Case Study: Inova Health System

In 1995, Inova was operating a highly decentralized contracting and procurement department that was spending $300 million annually for the purchase of all products required to support the hospital, from drugs to copiers to highly sophisticated medical equipment. Eighty percent of the orders were placed by "internal customers" — Inova's employees — who were distributed in 25 physical locations over a 40 mile radius.

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