There is no Finish Line with Savings
I love the philosophy of Costco (super warehouse club), which can be reduced to “there is no finish line with savings” for our club members. Costco meets this mission by not providing bags for their customers, only carrying one brand of each product in each category, reducing their lighting costs on sunny days since every store has huge skylights, and delivering their products on pallets and then placing them right into Costco’s warehouse stores without double handling. They only accept one credit card (American Express) which gives them ultimate leverage with their credit card company. As you can see, Costco’s savings efforts are a never-ending cycle…
As you might have observed, Costco doesn’t meet this “no finish line to savings” goal by just focusing on the price at the pump. They incessantly are searching for better ways to lower their total cost of acquisition to disposition. Another way they do this is with their private label brand called Kirkland Signature, which is highly acclaimed in a number of categories (batteries, laundry detergent, cookware, etc.), as #1 rated in the marketplace. My wife and I have found this to be accurate with most of the Kirkland Signature brand of clothing which is indeed superior to even some of the nationally advertised brands we had been buying for years.
My goal with this blog article was to give you some big and little ideas on how your hospital, system or IDN can emulate one of our nation’s leaders in providing your customers with a never ending cycle of savings. It’s not about price, but it’s all about finding innovative ways to reduce your total supply chain cost.
Here are a few questions you should ponder as you investigate your own never-ending cycle of savings for your healthcare organization:
- What percentage of private label brands are you buying?
- Are you utilizing a purchasing card for small purchases?
- Do you have too many hand offs of your products?
- Are your buyers looking beyond price for big savings?
- Are you employing the latest technologies to reduce your cost?
This is just a sampling of the type of questions you must ask yourself to create an environment for a never-ending cycle of savings, since there is no finish line with savings for today’s supply chain professionals if you are to meet the changes of the new healthcare economy.
Filed Under: savingsblog • Supply Chain
