Learn, Look, Ask and Try!
There is a new science called “design thinking” that was created by David Kelly, a professor at Stanford University and Chairman of Ideo (a design firm), that is sweeping the county by re-inventing what we do and how we buy. This new art and science is a perfect match with value analysis because by employing the techniques of “design thinking” it will enable value analysis practitioners to dig and drill down deeper into your supply chain to root out all waste and inefficiency.
This new way of thinking has brought to market the Apple’s computer mouse, the Palm Pilot, light-up lavatory occupied sign used on the Boeing 747s, Polaroid I-Zone camera, new design for shopping carts, LifePort transport for kidneys and a disposable pre-filled insulin injector.
The concept of “design thinking” entails a deep exploration of what we do, what we want to do and what’s holding us back from doing it. The techniques utilized by design thinkers to uncover this information are: cultural probes, behavioral mapping, secondary research and cognitive maps.
Without becoming too detailed about this new science’s tools and techniques, as I see it, it all boils down to four easy to learn concepts:
· Learn what others have done to improve their circumstances by reviewing published articles, white papers and other pertinent documents to search out better ideas.
· Look at what your customers are doing with their products, services and technologies through observations. Kelley’s teams go as far as video taping their client’s customers to determine their unique challenges and opportunities for improvement.
· Ask your customers to map their existing environment to determine the bad, the good and the ugly about the products, services and technologies they are buying.
· Try a new way to provide or deliver the product, service or technology (based on the insights and opportunities uncovered in the learn, look and ask stages of discovery above) by designing a pilot study or prototype to get it right the first time.
These four innovation steps are necessary “…because of inertia and conditioning, we quickly lose the perspective we need to see those improvements. You have to do things to provoke creativity… (or you lose them)”, says Bob Porter of DePaul Health Center, St. Louis, Missouri.
Kelly tells us that, “enlightened trial and error succeeds over the planning of flawed intellects”, because no matter how good you are at planning and think you know all of the answers there is always more to learn about the products, services and technologies you are buying.
As you can readily see, “design thinking” is a new way of thinking about your products, services and technologies, which will lead you to new opportunities for saving that can’t be uncovered in any other way.
Like an anthropologist you need to dig deeper to find new savings in healthcare today just to keep pace with inflation.
Celebrate Success!
Savings Beyond Price -Weekly eNewsletter – November 20, 2008
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Celebrate Success
Teams are just like people, they need to be rewarded and recognized for their success. Otherwise, why would your department heads and managers want to serve on your teams (i.e., value analysis, LEAN management, Six Sigma, etc.) again and again? It’s just human nature!
It doesn’t need to be a big reward or recognition either; small signs of appreciation will do the job. I remember a CEO coming to one of his value analysis team meetings — unannounced — after they had met their 90-day milestone goals. He then personally thanked each and every member of his value analysis team for their exceptional good work.
That’s not all! Before the CEO left the team meeting he gave each team member two tickets to a movie that was playing down the street. The team members were blown away by this reward that only cost this CEO $142.22 to do so. So you see it’s not just the size of the reward that matters, but the acknowledgment for the good work from senior management that counts.
Other CEOs we have worked with have given days off when their value analysis teams met their annual savings goal. Or, better yet, have agreed to and then remitted cash rewards as high as $3,500 per team member for exceeding their team’s goals.
It’s not important how you decide to structure, organize, fund and administer your Incentive Program. What’s important is for your healthcare organization’s senior management to acknowledge and recognize the accomplishments of your teams by frequently celebrating their small and big success every month, every quarter and every year.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P..S. If you want to learn more about how to celebrate success with your teams I would suggest that you listen to our most recent podcast “Incentivize-To-Save™: which will give you the most up-to-date information on this topic.
P.P.S. Don’t forget to check out my new blog article “Shaping the Perfect Value Analysis Team”. This blog will give you the critical success factors in selecting your “perfect” team members vs. selecting them by chance.
Shaping the Perfect Value Analysis Team
We are now working with a new client to re-tool, re-energize and re-structure their supply value analysis program, but one of our first objectives in doing so is the shaping of their “perfect” value analysis teams.
By perfect I mean that this hospital’s reconstituted value analysis teams (surgical, clinical, and support services) will have the right people, with the right competencies, attitude, aptitude and passion to get this hard value work done. This decision won’t be left to happenstance, luck or coincidence! It requires logical methodical judgment!
As I have mentioned in previous columns and blogs, we actually have a logical methodical rating system to select our client’s value analysis team leaders and team members. We use this system instead of selecting team member candidates by their titles, influence in their organization or volunteers who just show up and say they ready to work.
For many years, I too selected value team members by a toss of the coin and yes, I had a few “super stars” that showed up for this important value work, but not enough of them to grow a team of champions. I’m sure you too are experiencing this same observable fact, which is that too many of your team members aren’t a good productive fit for your value analysis teams.
That’s why you need to fire, retire or transfer these “imperfect” members to other teams where they might be a better fit. We do this all the time with our client’s value analysis teams until we get “perfect” value analysis teams that work.
In the final analysis, if you don’t have the right people on your value analysis teams, you will never reach peak team performance. This team perfection can only be reached if you have a logical, methodical, and precise rating system to identify the right people, with the right competencies, attitude, aptitude and passion who will raise your level of team performance exponentially.
New Software Opens up a Whole New World of Supply Chain Savings Previously Thought Impossible
For Immediate Release – Contact: Robert T. Yokl @ 800-220-4274
New Software Opens up a Whole New World of Supply Chain Savings Previously Thought Impossible
Utilizer™ Dashboard version 3.2 just released! Finally, there is a user friendly software that will enable healthcare organizations to quickly identify their supply utilization misalignments from the 30,000 foot level, right down to the ground level. This simple, effective and affordable Utilizer™ Dashboard will open up a whole new world of supply chain savings most think is impossible.
Skippack, Pa (SVAH) November 14, 2008 – Healthcare managers won’t be at all surprised to hear that the healthcare industry is rife with utilization misspends and misalignments. The root of the problem, according to expert research, is that despite their best efforts, healthcare managers have yet to uncover where their true utilization savings are buried.
Robert T. Yokl, President of Strategic Value Analysis® in Healthcare (SVAH) and a recognized supply chain management expert, recalls talking recently to a healthcare supply chain manager, who told Yokl that he, employing a spend manager, an analytics manager and clinical manager tools, was unable to locate their organization’s utilization misalignments. The job was not impossible, though, as SVAH’s was able to find nearly $4.2 million dollars in utilization misalignments for this organization.
“This very skilled and highly qualified supply chain manager was unable to pinpoint his savings opportunities, but this failure was in no way related to the managers’ skills or qualifications,” Yokl says. “He simply did not have the right tool to accurately find the savings that consistently remain buried in his supply chain data.”
Yokl’s solution is simple: Use the right tools for the job. Over the last eight years, SVAH has conducted hundreds of utilization benchmarking studies for hospitals, systems and IDNs by employing a proprietary utilization dashboard, which has identified close to a half a billion dollars in utilization misalignments for SVAH clients. Yokl says his company’s Utilizer™ Dashboard is the precision tool that hospitals and healthcare institutions really need. “The bottom line is that healthcare organizations can’t do it alone; it’s an impossible task to ask supply chain managers to find thousands, and even millions in supply chain savings using old-school strategies, tools and techniques.”
With this said, SVAH has just recently upgraded its Utilizer™ Dashboard to version 3.2 which now includes an easy to use contract management module that takes the hassle out of managing and controlling the hundreds (maybe even thousands) of contracts healthcare organizations must manage, archive and bid/negotiate almost on a daily basis.
The Utilizer™ Dashboard is available as a subscription service on a fixed monthly fee basis. It identifies all potential utilization savings, and subscribers also receive unlimited phone and e-mail coaching to assist them in translating, strategizing and implementing the savings uncovered with their Utilizer™ Dashboard. Yokl says one of the best features of the dashboard is that “SVAH does all of the heavy lifting and our clients get all of the savings.”
About The Company: Strategic Value Analysis ® in Healthcare, (SVAH) Skippack, Pennsylvania, is a software, training and consulting firm specializing in supply utilization management. SVAH’s mission is to give clients greater control over their supply chain by providing them with better information, better focus, and better systems so that they can make better decisions on their second biggest expenditure.
What Really Works!
Savings Beyond Price -Weekly eNewsletter – November 13, 2008
President & Chief Value Strategist
Greetings!
What Really Works!
If you separate the facts from the fads in healthcare supply chain management you will quickly discover the “must-have” supply chain practices that truly produce superior results. What does really work, you might be surprised to hear, is that you need to go back to basics before you can go forward to big savings results in the future.
From my experience, here are the four primary supply chain best practices that really work and have past the test of time:
1. Committed Volume Purchasing
I can’t think of a healthcare organization that doesn’t belong to one, two or even three GPOs, but very few hospitals that I have observed have jumped on their GPOs committed volume contracts. That’s where the deep deep savings can be achieved for your healthcare organization, because all vendors sharpen their pencils when they know that they will get all of your business, not just some of it. That’s why regional GPOs are becoming a big factor in saving money for their members; they are all steadfastly focused on committed volume purchasing.
2. Classic Value Analysis Techniques
Value analysis in all its flavors, as a MM characterized it to me the other day, can save you money. However, if you were to employ the classic (back-to-basics) tenets of value analysis as espoused by Larry Miles, the Father of value analysis, you will save a lot more money and have better and faster results.
3. LEAN Management Practices
LEAN management has a 28-year history of leaning supply chains of waste and inefficiencies in all industries, including healthcare, by making use of Toyota’s 14 principles of management. LEAN is not only a best proven practice, but a “must-have” approach to supply chain management that will eliminate the huge costs of your hidden waste. The healthcare organizations that we have worked with over the years that religiously applied Toyota’s 14 principles have saved seven to 15% on supply chain expenses – almost overnight.
4. Supply Utilization Management
In the 80s Bill McFaul, the co-founder of McFaul and Lyons consulting firm, coined the phase “consumption management” to focus his clients on savings beyond price™ where the greatest savings can be achieved. We now call this discipline Supply Utilization Management because this art and science encompasses more than just consumption analysis of the products, services and technology you buy, but also targets the value mismatches in supply chains that are bloating hospital’s budgets. This is an old concept whose time has arrived again to be put into practice, since your price savings are slowly on the decline and your low hanging fruit have been picked.
You might want to consider these four best practices as “what’s old is new again” since the right strategies, tactics and techniques never really grow old, but somehow just get lost in the passage of time as we move on to new but not necessarily better best practices. I hope you will revisit these four primary supply chain best practices to produce even more superior results in the future for your healthcare organization.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P..S. If you want to read more about “what’s old is new again” ideas you might want to check my special report “Building a Savings Factory” that will give you even more best practices that have passed the test of time.
P.P.S. Don’t forget to check out my new blog article “Supply Chain Hall of Fame Awards Now a Reality”. This blog will talk about nine men that changed the face of supply chain management in our time.
Supply Chain Hall of Fame Awards Now a Reality
I’ve talked about the “Supply Chain Hall of Fame” Awards before in this blog, but now they are a reality. The first honorees were presented their awards on October 21st at the Renaissance Chicago O’Hare Suites Hotel. As you may remember, this award was given the first time by the Bellwether League to supply chain leaders, futurist and educators of the past and present who have made their mark on our industry.
Supply Chain Hall of Fame Honorees
The honorees were the late Dean S. Ammer, Ph.D., Lee C. Boergadine, Gene D. Burton, Charles E. Housley, Thomas W. Kelly, William J. McFaul, Tom Pirelli, Donald J. Siegle and Alex J. Vallas. All of the honorees weren’t present to receive their award, but here are some of the comments from the ones that did attend from a news release provided by the Bellwether League.
Lee C. Boergadine reflected on his career “from Peoria to here,” as characterized by (Jamie) Kowalski. He called his induction into Bellwether League “one of the most exciting and humbling evenings of my life, second only to the evening my wife Marty said ‘I do.’”
Boergadine then traced his professional and personal development as influenced by five of his fellow inductees. “There’s no more eloquent way to demonstrate what it is to be a bellwether than to be a young man in Central Illinois and have personal contact with my fellow honorees,” he concluded. “Thank you all for the part you played in my life.”
Kowalski recalled meeting with Burton for advice and how Burton gave him four-to-five hours of his time as a demonstration of Burton’s commitment to the profession. The retired Burton expressed appreciation for being able to see people he hasn’t seen in years, thanked Bellwether League and his former employers and employees during his career, and capped his brief comments by thanking his wife of 63 years who was seated in the audience, next to Suzan Logan, who leads his consulting firm Gene Burton & Associates Inc.
(Thomas) Kelly called it a “thrill” to receive Bellwether League’s award and a “capstone” to his career. “When I was a young buck getting started at GE, [a manager] told me there were four things you need for success: A good education (Kelly highlighted his Jesuit school in New York), work hard (he told audience members to ask his wife Mary in attendance about the dinners and parent-teacher conferences he missed), mentors (he cited two, his boss at Massachusetts General Hospital Randy McDonald and Bellwether League Board Member Tom Hughes) and you have to be lucky.”
As you can see, it was an emotional time for these awardees who started their supply chain careers just like all of us just wanting to make a difference. Well, these individuals sure did make a difference in how we in the healthcare supply chain management see our jobs today. Not as buyers, but as supply chain executives who manage multi-million dollar supply chain businesses that can make a big difference in our healthcare organization’s bottom line. Congratulation to these supply chain heroes for their contribution to our discipline.
Healthcare Supply Chain Strategic Planning
Isn’t it Time You Look in the Mirror?
Material management (or supply chain management) as it is now called) has been red hot for 27 years in healthcare, yet very few healthcare organizations have taken the time to develop a Strategic Supply Chain Operations Plan (SSCOP) to fine tune their multi-million dollar business operations. Few healthcare organizations ever take the time to refresh their SSCOP plan if they have one to compensate for the winds of change that take place yearly and will affect their healthcare organization.
Winds of Change: Big changes will dramatically affect your healthcare organization is the economic melt down we are all experiencing. Your elective admissions are slowing, your investments have shrunk by double digits, your prices have escalated, your sources of credit lines are shrinking and your capital budgets are on life-support.
Master Change: We in supply chain management always seem to be herky–jerky when it comes to strategic operational planning, when the fact is planning is the little known secret you desperately need to stay on top of your game. By looking at where you have been, where you are now and where you want (or need) to be in 1, 2, 3 or 5 years with your supply chain management program, you can manage these unpredictable winds of change more effectively.
Anticipate Change: This is the situation with one of our clients whose management is telling him he needs to do more with less. He has responded to this challenge by developing a Supply Chain Operations Plan, with our assistance that includes reinventing and re-tooling his purchasing operations and supply value analysis program to be leaner, meaner and more productive. As a result our client has proactively increasing his supply saving yield by 11.4 over the next few years.
If you want to be left standing when the winds of change hit your healthcare organization, you need to master change by anticipating change with your own Strategic Supply Chain Operations Plan that will keep you afloat in good times and bad.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P..S. Don’t wait until a crisis arises at your healthcare organization to create your Strategic Supply Chain Operations Plan. Be proactive, responsive and visionary by making planning a continual process of improving your supply chain each and every year so that you can master the winds of change.
P.P.S. Don’t forget to check out my new blog article, “The Case for “Know-Nothing” Value Teams. This blog will show you how to achieve better, unbiased decisions from your value analysis project managers every time.
The Case for “Know-Nothing” Value Teams`
When we orientate our client’s executive management teams for the first time on how our Team-Based Project Management™ Team model works they can’t believe we espouse the concept of “Know-Nothing” value teams. Or, to put it another way, we recommend assigning value analysis projects to value team members from outside the area of their expertise to obtain the maximum results. These executives predictable first reaction to this new and different idea is that it doesn’t make any sense.
On the contrary, we have found over the last 12 years that if you want different results than you have been achieving on your value analysis projects then you need to embrace a disconnected value team model to obtain new, better and more lasting results. Here are six reasons why this new, different and client tested model works every time:
1. Unbiased Analysis
All value team members have built-in biases about the project, services and technologies they use. Therefore, to insure an objective, data-driven and arms-length view of the issues it is critical that a project manager be assigned who doesn’t bring any baggage with them that will negatively affect their projects efforts.
2. Eliminates Preconceived Solutions
We call this rush to judgment: a project manager deciding prematurely what the solution should be for their value analysis study. Having a project manager for outside the home of the project, service or technology under investigation virtually eliminates the problem.
3. Reduces Turf Protection
If you own (i.e. use, recommend or are an advocate of) the product, service or technology under investigation and are assigned a project on your turf, you will have a natural tendency to protect your turf from any change whatsoever. However, if you have NO ownership you are free from organizational and cultural pressure to give an independent solution to the case at hand.
4. Stretches Project Managers
You have heard the expression that a person “phoned in their report” with little or no effort on their part since they didn’t take the project seriously or thought they knew ALL the answers and the right solution to the problem. This doesn’t happen when a project manager “knows nothing” about a project and is then forced, by their ignorance, to thoroughly investigate the subject at hand. The big benefit is that you won’t have predefined solutions to your value analysis studies before they even get started and the quality of your VA studies will improve exponentially.
5. Increases Team Knowledge
You will quickly notice that when you employ the “Know-Nothing” principles to your value team model it will straight away promote a cross-pollination of new and better ideas and knowledge heretofore missing from your value methodology. It will also surface new relevant facts and a candor that will lead to much better outcomes.
6. Keep Ideas Fresh
Most fresh ideas come from without, not within an organization, department or unit. Once you understand and incorporate this paradigm shift into your value analysis methodology you will be quickly rewarded with more original ideas and genuine breakthroughs in your service quality and total cost reductions than ever before.
Change management is ALL about setting the stage for change, not forcing change to happen. The “Know-Nothing” concept is one technique that we have employed for 12 years with our client’s value teams that made change happen naturally, organically and logically. I firmly believe that you too can make use of this concept to make a big leap forward in your value teams’ performance.
