When Millie Maddocks bought Chicago-based MAC Medical Supply Company from her husband in 2000, her small business’s path ahead looked uncertain.
MAC Medical had been a successful cardiology equipment manufacturer and distributor and Bill Maddocks, who was retiring, had already sold those lucrative lines of business.
But she needn’t have worried. Millie Maddocks has steered the medical supply company to 30% annual growth in the last three years and will book $15 million in sales this year. MAC Medical now employs 16—hiring five just the last year---and has relocated its national warehouse in a 75,000 square foot facility to Munster, Ind.
The Maddockses faced a dilemma familiar to many family-owned small businesses: how to transition a successful enterprise into something new while facing the challenges of new leadership.
Bill Maddocks, who began working in the medical field more than 30 years ago, said the company his wife operates today barely resembles the firm he sold her.
“She had to morph this company into a new organization in reaction to changes within today’s healthcare business climate,” he said. “She had to scramble and hustle, but it’s turned out well.”
Minority-owned Business: Capitalizing on an Opportunity
Millie Maddocks turned what some might have considered a negative into an asset. MAC Medical qualifies under federal contracting rules as a “woman-owned business.”
Because the federal government recognizes that women and minority-owned businesses have been historically disadvantaged, underutilized and often locked out of the supply chain, it has mandated that its contractors allocate a percentage of their purchasing to diverse suppliers, businesses owned and operated by women, African-Americans, Hispanics and other minorities. Because hospitals and large national suppliers contract with the federal government through Medicare, Medicaid and other agencies, they must abide by those mandates.
MAC Medical Vice President Scot O’Flaherty called the company “a diversity supplier in healthcare with an emphasis on logistics and distribution” that has formed strategic relationships with large national suppliers to participate in the supply chain.
“Millie’s involvement is paramount to our continued growth,” said O’Flaherty. “She has helped to pull up other women’s businesses and that process has helped us gain access to new markets.”
In addition to selling and distributing a number of medical supplies directly to hospitals and other healthcare providers, MAC Medical also sells and distributes to large national suppliers and promotes and markets the products of other minority-owned companies.
Millie Maddocks said her firm markets hundreds of products, from wound care and exam room supplies and toiletries to medical equipment, devices and supplies.
“Most of our business is traditional buy and sell from manufacturers to providers and other distributors, but we also do sourcing logistics; pick, pack and ship and work as an aggregator, or master distributor, providing distribution services for multiple small manufacturers,” she said.
MAC Medical’s success is partly due to the irrepressible Millie Maddocks, a tough-talking Serbian-American who began working in hospitals while a teenager.
“Millie is a whirlwind, a tornado,” observed Angela Wilkes, both a client and a mentor to Maddocks in her role as director of supplier diversity and sustainability for national medical supplier Owens & Minor. Wilkes is also the founder and chair for the national Healthcare Supplier Diversity Alliance, a not for profit organization that supports minority-owned healthcare supply firms.
Wilkes said Millie Maddocks is relentless in her ability to sell her company and the value it delivers.
“Millie is very difficult to say ‘no’ to,” she observed. “Her customer service is as good as it gets and she brings a high level of strategic partnership, along with the flexibility of a small company. She can act and move on a dime and instinctively knows how to connect get things done.”
MAC Medical customer Mary Byrne, director of material management for MetroSouth Medical Center in Blue Island, Ill., said the south suburban Chicago hospital buys the company’s products through a group purchasing organization (GPO) contract.
“We buy her products and first and foremost, the prices are very competitive and the quality is very high,” Byrne said. “They offer education on how to use the product, and that kind of service can play a role. We might need training. I’ve bought products from other distributors who don’t have good reps and it makes it hard to use their product. MAC Medical isn’t like that.”
Millie Maddocks said MAC Medical partners with many manufacturers who produce private label products for them, as well as bigger healthcare distributors. “The unique niche that MAC Medical has taken advantage of is that the cost to serve the big distributors (large medical suppliers) requires regular weekly replenishments for those products, even though these small companies may only produce or distribute a few products. We have started to manage transportation for those companies and aggregate them under the umbrella of MAC Medical. The big companies can qualify those as diversity purchases and grow more efficient, while the small manufacturers and suppliers gain financial advantage because of the lower shipping rates we’re able to offer.”
One of MAC Medical’s early successes was buying and selling medical chart recording paper, which offered Millie Maddocks a chance to break in to Owens & Minor, Wilkes’ employer. That business relationship led to a mentoring arrangement between Maddocks and Wilkes, who delights in the success of her protégé.
“She and her company have been a model for success for relationships between a large, major corporation and a small, woman-owned business.”
Women and minority suppliers face obstacles
Wilkes said that supplier diversity is a relatively new concept in the healthcare industry, a movement that is sometimes disparaged as a passing trend.
“But increasingly more diverse populations are being served by our hospitals and companies,” she said. “To offer a better delivery of care to the patient, we need a diverse workplace and an economic base to support that supply chain. It makes good business sense and good healthcare delivery sense. We want to improve the quality of care to patients and that’s imperative for hospital and suppliers.”
Wilkes predicted that opportunities will expand for women and minority-owned businesses in healthcare. “There are structures in place that allow tremendous growth potential for them in the health supply chain, primarily through acquisition and consolidation,” she observed. “This is a great opportunity for entrepreneurs with an interest in getting into this industry and getting to know it and learn it and actually do the work.”
Overcoming adversity through diversity
Richard Manson, president and CEO of Brentwood, Tenn.-based medical supplier, SourceMark, said to succeed in the competitive climate of medical suppliers, small firms like his and Maddocks’ must form strategic relationships.
“Then it’s a win-win for everyone. You can’t take on these big companies,” Manson said. “They will shut you down.”
Manson, whose firm employs 15 and whose annual sales exceed $10 million, admitted that while the industry has made progress, it still has a long way to go before it allows women and minority owned businesses a chance to fairly compete.
“The industry historically has treated diversity as something they have to do, but don’t really want to do, as a headache. And there is a stigma attached,” he said. “What they don’t always recognize is that diverse suppliers have the ability to drive down costs. We’re more agile, hungrier, and can make decisions quickly.”
Millie Maddocks agreed. But in case any of her customers worry, she said her company will proudly remain a woman-owned business after she retires. “My daughter will take over when I leave,” she vowed.
Tips from the C-Suite
- Be relentless, urged Chicago-based MAC Medical Supply Company President and CEO Millie Maddocks. “If you don’t ask, you don’t know and you don’t get.”
- “Be prepared to capitalize on change and chaos: they are opportunities in disguise,” said Richard Manson, president and CEO of SourceMark, a Brentwood, Tenn., medical supplier.
- The value of networking should never be overlooked. “I’ve been involved in women’s business organizations, sat on several conference panels and talked about how I grew my business,” said Maddocks. “Promoting women in business has opened doors to promoting my own business.”
- Establish and maintain strategic relationships. “We have worked with large, national conglomerates to help them achieve their diversity goals and that has opened new opportunities for us to introduce them to other suppliers and us to new products and services,” said Scot O’Flaherty, vice president, MAC Medical.