How to Identify Your Best Value Analysis Team Members
Most hospitals, systems and IDNs have value analysis teams that evaluate and select the products, services and technologies that they are buying. The question I would like to pose to you is how do you identify the best VA team leaders and team members? Is it by chance or fact?
For years, we allowed our clients to select their value analysis team members by title or position, only to find that we were leaving this selection to chance – not facts! Our studies were showing that 76% of the team members that were selected by this chance method were failing in their team member roles.
We then realized that this selection process was really a hiring decision and it had to be made more scientifically if our clients were to have the best talent on their value analysis teams. That’s when we instituted our “Team Leader and Team Member Placement Test” based on the top value analysis team member competencies that we have observed were the most successful, more often, in the past.
The result, after eight years of using this test with our clients, shows that if you have a placement test for your team leaders and team members you have a 97% probability of having the best candidates for
your team’s jobs and you can, up front, eliminate any mismatches for this teamwork before it becomes too late or too embarrassing to do so.
So if you want to hit the bull’s-eye every time by truly predicting the performance beforehand of your new value analysis team leaders and team members you need to design a “Team Leader and Team Member Placement Test” for your new team hires based on FACTS, not chance.
New Pay for New Work!
Robert T. Yokl
President & Chief Value Strategist
Greetings!
New Pay for New Work!
We just held our summer session of our Certified Value Analysis 3-day Training Program which brought into the daylight that only a small number of healthcare organizations are rewarding and recognizing their value team members for the hard work that they do.
This hasn’t ever made sense to me, since hospitals, systems and IDNs should be authorizing new pay for new work that these value teams are doing. By incentivizing your value teams you can keep them on track, on budget and keyed up to save even more money for your healthcare organization.
I’m so convinced that this is the right thing to do that we mandate that every healthcare organization that installs our LEAN Value Analysis Program also establish a rewards and recognition program to encourage their value teams to be peak performers. Or, why else would their staff squeeze into their already busy days, weeks and months all this new work. Rewarding people for extra work is not only logical but it’s a key facet of human nature!
Every client of ours who has adopted this philosophy of “new pay for new work” has been repaid for their investment by at least 100 fold. Likewise, their value team members’ productivity, creativity and doggedness has risen to a new level of superior performance.
Reward and recognition programs aren’t just the right thing to do for your value teams, but are a prerequisite for everlasting savings and quality improvements. Without this your value teams aren’t firing on ALL eight cylinders, just meandering along on three or four cylinders!
Isn’t it time you get your value teams into high gear?
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P.S. We have been told by our Value Analysis Resource Web members that our Value Analysis Leader Resource Web is the right product, at the right time and at the right price to fuel their value analysis teams performance. If you haven’t seen this unique knowledge management resource yet, may I suggest that you check it out now at www.strategicva.com/vaweb.htm
P.P.S. Don’t forget to check out my new blog article “Fail Often to Quickly Succeed”. This blog is all about how failure isn’t a stigma, but an opportunity for massive innovation.
Fail Often to Quickly Succeed!
At our CVAL Training Course last week one of my students, a supply chain operation’s manager for a large system in the Mid-West, told me that he goes out of his way to let his value team members know that it is OK to stumble, falter or even fail on the projects that they are working on given that it will lead to even more successes more often and quicker than ever before.
I was very impressed with this operation manager’s attitude toward failure since it is one of the critical success factors in trying, evaluating, experimenting, and adopting or discarding products, services and technologies that you are investigating. More importantly, “rapid decision(s) and swift follow-through are essential to keeping an organization innovative” according to Dan Quinn, CEO of Rath & Strong Management Consulting.
Unfortunately, too many healthcare organizations espouse “finger pointing” as their predominant management style which only stifles innovation, instead of encouraging rapid decision making. It should be your goal therefore, to encourage your project managers to “fail often to quickly succeed”, even if your management is preoccupied with the blame game.
As Thomas Edison once said about inventing the light bulb, “I haven’t failed; I just found 10,000 ways how not to make a light bulb”. If Thomas Edison can fail 10,000 times before he succeeded in making a workable light bulb, then I think that your project managers should be able to fail often and quickly while on their way to million dollar savings success.
New Supply Best Practices Webinar Announced!
Influence Your C-Suite for Positive Results!
Webinar Objectives:
What is Your C-Suite Thinking?
What Are They Really Thinking?
Solution: More and Better TLC
TEACH to Gain Respect
LEAD in the Right Direction
COACH to Gain Commitment
July 17, 2008 - 1:00pm EST.
Webinar Leader - Robert T. Yokl, President/Chief Value Strategist Strategic Value Analysis in Healthcare
Remember…The Webinar May Be FREE But The Information is Priceless
LEAN Six Sigma: The Future is Now!
I had an electronic interview last week with Rick Dana Barlow Senior Editor of Hospital Purchasing News, for a future article on LEAN Six Sigma. This HPN interview got me thinking about how important it is for supply chain professionals to get on the LEAN Six Sigma train to meet their huge challenges over the next decade. Here are some of the ideas I spoke about in my HPN interview that I think you will find of interest.
First of all, Lean Management and Six Sigma are two different, but complementary methodologies, linked together into a unifying process called LEAN Six Sigma. LEAN Six Sigma has helped thousands of companies and hundreds of healthcare organizations dramatically improve their quality and increase their bottom line. What makes Lean management and Six Sigma different from TQM/CQI is their highly disciplined approach, their focus on waste and inefficiencies in the supply chain, speed and reducing the wide variances in products, services and processes employed and then controlling them – forevermore!
The healthcare supply chains are an ideal application for the Lean management or Six Sigma principles because they are transaction-based functions. For example, one big lesson we have learned from Toyota, the creators of Lean Management, is that purchasing departments can have as much as 50% non-value-added activities (i.e. activities customers wouldn’t pay for if they knew about them) that can be reduced by as much as a third by employing the Lean Management methodology. In this age of doing more with less we in supply chain management need to embrace these proven concepts so that we can optimize our resources just to keep pace with the changing healthcare marketplace.
Just as important, Lean Management and Six Sigma offers supply chain managers a disciplined, standardized, repeatable, and measurable system to reduce their cost and improve their quality. Its tenets can be applied to any initiative that a supply chain manager is asked to undertake (inventory management, PPIs, standardization, utilization, etc.) These concepts are really a magic bullet for supply chain managers to have even faster, better and more consistent supply chain operations.
I believe that the reason that more supply chain managers haven’t adopted these concepts is their belief that it will take too much of their time for them to learn, manage and sustain these new ways of doing things. In reality these concepts will actually save thousands of hours of year in reduced time, effort and expenses for supply chain managers. Education is the answer to moving material managers from a passive to an active role in adopting these new ways to managing their complex multi-million dollar supply chains.
That’s it for the short excerpt from my HPN interview, but it shouldn’t be the end of our dialog on this important topic. I would like to hear your ideas on this subject matter as well so we can get all supply chain professionals on the LEAN Six Sigma train.
How Are You Selecting Your Value Analysis Projects?
First of all, don’t confuse new or renewal GPO contracts as being value analysis projects, because they are not. This is contract management in its purest sense, which is a whole other discipline that has its own rules and models.
What I’m talking about here is the way in which you selecting your VA projects, which can unearth millions of dollars of savings in your value streams. For the best results, you should establish criteria for the selection of your VA projects. Here are five criteria I would suggest you start with:
1. Dollar Threshold: No VA project should be undertaken on a product, service or technology that has less than a $25,000 annual spend. The reason: Your ROI would be very small, if at all!
2. Projected Timeline: If your VA project will take more than 90-days to complete it might be better to break the project into smaller projects. Projects that have long timelines tend to go off track. Keep your projects in bit size pieces!
3. Probability of Success: If you only have a 50% probability of success in implementing a project (e.g. orthopedic implant study) then delay the project until you have an 80% success factor.
4. Project Alignment: If your VA project is not supported by your management then I would delay it for another day. Why fight city hall – you rarely win!
5. Solution Clarity: If you already know the solution to a problem (e.g. defective material) then don’t initiate a VA project — just fix the problem. It will save you a lot of time and effort by doing so.
These are just a few ideas to get you on the road to selecting the best VA Projects using criteria vs. gut feel with the greatest possible ROIs.
Your Partner In Innovative Savings,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
P.S. My staff thinks I’m crazy to offer our e-newsletter subscribers a 30-day “test drive” on our Utilizer™ Dashboard and you only pay if it works! But I’m so convinced that once you try it you won’t want to live without it that I have turned a deaf ear to my staff’s objections to bring you this outrageous “pay if it works” guarantee. Email me to learn more about this special offer - bobpres@strategicva.com
P.P.S. Don’t forget to check out my new blog article “A Lean Way of Thinking! This will give you a new way of thinking about your workload.
A Lean Way of Thinking!
Doing less with more is a mantra in healthcare organizations today. Everyone is scrambling to get their routine, but important work done, while trying to find time for those special projects that seem to be coming up more frequently than ever before.
Supply chain professionals are caught up in this whirlwind of activity too and are having a hard time coming up for air. Instead of worrying about it, which is a waste of your imagination, I would suggest supply chain professionals embrace “a lean way of thinking” so that you can find time for those things that are really important to get done.
When I was a material manager for four hospitals and one system, over my long career, I never ever had enough staff, sufficient money in my budget or the technology to get everything done that needed to be done. But I did have “a lean way of thinking” that I call how thinking vs. what if thinking that led me to design new ways of doing things that reduced my workload 10-fold.
For example, I designed a “Debit Memo” that attached to my vendor’s invoice that authorized my payable’s department to deduct or adjust a vendor’s invoice’ for price discrepancy, missed discounts, freight charges, etc. that didn’t agree with my purchasing order. This tactic saved me and my hospital’s payable’s department hundreds of hours a year of haggling with vendors or waiting for their credits. Yes, sometimes we had to credit the vendor back for some of these debits, but this was a rare occasion because my PO was law. Case Closed!
The point here is that this is just one of my scores of how thinking ideas that enabled me to dig out of the holes I always inherited when I took on a new job as a material manager. By the time I left a hospital or system I had their operations humming with my “lean way of thinking”.
You can do the same thing at your healthcare organization by thinking about how you can improve your supply chain operations without spending any money or adding any staff. It’s a fun game you can win!
Finally, once you get the knack of how thinking you will be stunned at how many new and better innovations you can bring about in your supply chain. I’ve done it hundreds of times and I know you can do it too.
How to Save More in Less Time!
I can’t think of anyone in supply chain management who doesn’t want to save more in less time. However, this isn’t going to happen with more GPO contracts, more standardization, more capitation or even more custom contracts, since this ripe fruit has almost been picked clean in your vineyard.
This is just churning the same old savings, over and over again, without having any real effect on your hospital’s bottom line, since inflation (3.4% annually) has been eating into all of your so-called savings for years. The future of supply chain expense management isn’t in the old ways of doing things, but instead is all about utilization management.
This is where you will achieve double-digit savings (26% on average) on just about any utilization project that you decide to attack. More importantly, it will require less time than any of the above strategies, tactics and techniques, I just mentioned, to reduce your supply expenses!
So if you aren’t on the utilization management train already, may I suggest that you start thinking beyond price by digging deeper and broader in your supply chain to identify and remove the wasteful and inefficient consumption, misuse, misapplication and mismatches in your value streams.
Then, and only then, will you save more in less time which will be sustainable over the long-term.
Your Partner In Innovative Savings,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
P.S. Would it be worth .82 cents to have ALL of the resources you required to be wildly successful with your hospital or system’s supply value analysis program? Well this isn’t a fantasy, but a reality with our innovative Value Analysis Resource Web. Check it out for yourself at www.strategicva.com/vaweb.htm. i PROMISE You — YOU won’t be disappointed!
P.P.S. Don’t forget to check out my new blog article “Stop the Madness with Your GPO Contracts”. This will give you some ideas on how to manage this important chore more effectively.
Stop the Madness with Your GPO Contracts
I have been told by value analysis managers throughout the country that they spend 96% of their time evaluating new or renewal GPO contracts, which isn’t value analysis at all. When I tell them that there is only 1%, 2% or 3% savings to be achieved with their GPO contracts and, on average, 26% to be saved on any value analysis project they conduct, they soon understand that they are spending their time on the wrong side of the supply chain equation – price!
The next question I’m always asked by value analysis managers is, “How do I STOP THE MADNESS with my GPO contracts, so that I can spend the required time on my value analysis projects?” Here’s three strategies that I tell them to employ to get organized, prioritize and optimize their time to save even more:
- Start a campaign with your peers to insist that their GPOs write contracts with 3, 5 and 10 year lifecycles – not one year terms. Not only will this tactic reduce the number of GPO contract renewals, but will enable GPOs to lock in their prices over the long-term, since inflation is the real threat to price stability in the healthcare marketplace. For example, Southwest Airlines has not been affected by the current energy crisis since they locked in their fuel prices over the long-term. Your GPO can provide this same price protection for you!
- Don’t change your manufacturers just because there is a new GPO contract being offered by your GPO, because the cost of change will usually cost your more than the contract savings being offered. You can do this by searching out comparable contracts with other GPOs (yes, you might need to join more GPOs to do so), so that you can continue to purchase from your preferred manufacturer at competitive prices. Your justification: Contract churn isn’t and will never be a cost effective way to do business.
- If you are a large enough healthcare organization to do so, write long-term custom contracts with your GPOs assistance, so that you can lock in your prices for the foreseeable future.
I’m sure you can think of a few more and even better strategies to organize, prioritize and optimize the time you are now expending evaluating your GPO contracts now that I have opened Pandora’s Box. It’s my opinion, that if we don’t STOP THIS MADNESS it will have a stifling effect on your supply chain effectiveness in the sort and long-term.
If you agree or don’t agree with my take on this topic, I would love to hear your comments on this pressing problem.
Your Partner in Innovative savings,
Bob Yokl
President & Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P.S. If you would like more powerful savings and quality ideas like this one I would recommend that you sign-up for our “no cost” weekly Savings Beyond Price™ e-Newsletter at www.Strategicva.com. You will also get a copy of my e-book “Your Target Blueprint for Supply Chain Management Success”, as a bonus.
Who Needs Project Management?
Of all of the tactics that I have employed, over the years, to save money one of the most powerful advances in our programs has been project management. It’s fundamental, time-tested and successful at all organizations who have employed it to manage their savings initiatives.
Yet, throughout my travels I rarely see it used at healthcare organizations for the planning, organizing and managing of their value analysis projects. This is a missed opportunity because this tactic will enable you to set time-lines on your projects, keep things moving on your projects, monitor and control your projects, get the most out of your limited resources and enable you to manage multiple projects with ease.
Save the easy way! At one time we too didn’t use project management techniques to manage our client’s value analysis projects only to find that our client’s team members were going every which way – but forward. That’s when we realized we had to do something different to control these unruly herds. We found that by providing a practical, easy-to-use project management system for planning, organization and managing our client’s projects we could tame the herd, speed up projects and perform 10x more value analysis studies than ever before. That’s what successful management can do for you.
So who needs project management? I would say everyone who wants a systematic approach to staying on top of all of your value analysis multiple projects at once and doesn’t want to leave anything to chance, happenstance or fate! Doesn’t that sound like you?
Your Partner In Innovative Savings,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
P.S. Almost Everyone who has seen a demo of our Utilizer™ Dashboard has told us that it is just what they have been looking for to manage and control their utilization misalignments! Isn’t it time you sign up for a demo too?
P.P.S. Don’t forget to check out my new blog article “Grow, Lead and Succeed with One Big Idea”, that will give you one big tactic that you can’t afford to miss to improve your communications with your bosses.
Are You Really Practicing Value Analysis or Are You Doing Something Else? (Revisited)
I have written often about healthcare organizations’ value teams not practicing value analysis, but are instead doing something else. But what I didn’t know, until we started conducting our Certified Value Analysis Leadership Program (CVAL) in 2007, is that value analysis coordinators, managers and directors aren’t practicing value analysis either.
What I have found from my interaction with these coordinators, managers and directors, at our three-day CVAL program, is that these individuals spend most of their time evaluating new and renewal GPO contracts! That’s not value analysis at all, that’s contract management in its purest sense.
After these very intense three days of training I’m happy to report that most of the attendees at our CVAL program finally realize that they aren’t practicing value analysis and have decided that going beyond price is where they want to go in the future with their value analysis programs.
As I mentioned last week at the North Carolina Materials Management Association annual conference, hospitals should have an annual audit of their pricing, then fill in the gaps of their contract portfolio where needed. It doesn’t make sense for these individuals to spin their wheels and waste their time trying to eke out a few more percentages savings with their GPO contracts, when there is about 26% savings on just about any commodity these individuals would investigate using the techniques of value analysis.
I went on to tell the NCMMA members that they should petition their GPOs to have more 3, 5 and 10 year contracts, with annual renewals, so their members could stop the madness of trying to keep up with their new and renewal GPO contracts that are e-mailed to them daily.
Bottom Line! Value analysis coordinators, managers and directors need to get back to basics by actually practicing the tenets of value analysis and then move away from being contract managers. Contract management isn’t your job (it’s your purchasing department’s job) and it’s not what you were hired for.
It’s your job to study the functions of the products, services and technologies your hospital is buying, and then search for lower cost alternatives to meet those functions. That’s what’s missing from your value analysis program and is holding back huge savings for your hospital.
P.S. If you would like more powerful savings ideas like this one I would recommend that you sign-up for our “no cost” weekly Savings Beyond Price™ e-Newsletter at www.Strategicva.com. You will also get a copy of my e-book “Your Target Blueprint for Supply Chain Management Success”, as a bonus.
Building Your Toolkit!
I spoke last week at the North Carolina Association of Materials Managers Annual conference on the topic “Value Analysis 2.0: New Rules, Systems and Models for Long-Lasting Savings Success”, which gave me an even more in-depth insight into the challenges that supply chain professionals are facing today.
I also had lunch with a few MMs and value analysis managers at the conference who wanted to know how they could uncover the big and robust utilization savings that I talked about in my presentation. This is when I realized that supply chain professionals aren’t building their toolkits with the precise tools to prepare them for the future of supply chain expense management, i.e. utilization management.
This is because the old tools that healthcare organizations have been employing (MMIS, ERP, and spend managers) for years won’t get this new work accomplished. That’s why we now need to embrace the new art and science of value analytics to search out our utilization misalignments and eliminate them. By doing so supply chain professionals can save 3%, 7% or even 12% in our supply expenses – beyond price.
If you would like to know more about this new and emerging discipline I would suggest that you download my new special report “Utilization Management: The Future of Supply Expense Management” that will show you what you need to do to build your toolkit to meet this challenges in the 21st century.
Your Partner In Innovative Savings,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
P.S. This is the last call (deadline May 31st) for applicants for our Certified Value Analysis Leadership Training program at our early bird rate of $1,192 ($211 discount). If you have been thinking about applying to this one of a kind program this is the time to do it. Otherwise, you will miss this discount period! Learn More
P.P.S. Don’t forget to check out my new blog article “Are You Really Practicing Value Analysis or Doing Something Else” (Revisited). This is where I talk about how I have found that value analysis coordinators, managers and directors aren’t practicing value analysis either. – to their disadvantage! Read Here
Don’t Take Everything I Write or Say as Gospel
By Robert T. Yokl, Chief Value Strategist
I received an e-mail last week from a operating room director who had a real problem with an article I wrote for HPN magazine in April, 2008 titled “Zero Waste Must be Your Goal: Supply chain managers can make a huge impact by eliminating waste in 8 areas”. She thought my recommendations to reduce waste to zero wouldn’t work in her operating room.
Specifically this writer had a big problem with my suggesting that all hospitals should embrace the philosophy of just-in-time inventories, since she felt she needed to carry many critical items that didn’t move for years. She believed that a hospital OR wasn’t like an automobile factory that had much more control over their environment.
What I told this OR director, by return e-mail, was that she was right that all my suggestions wouldn’t work in her operating room, but that when I write an article I must write it with a broad and diverse audience in mind. So I need, therefore, to be somewhat generic vs. specific with many of my ideas.
But I did tell her that I thought that many of my ideas would work, such as, cutting down on her waiting time for information, supplies signatures or people, not overproducing linen packs, instrument packs, kits and trays, cut down on transportation time of her materials and patients and reducing extra motion in all areas of her operations.
So I wouldn’t take everything I write or say as gospel, however I would look for those gems that will make your job more productive, efficient and a whole lot easier. I consider it my job to find new ways to help you do even things better than good.
P.S. If you would like more powerful savings ideas like this one I would recommend that you sign-up for our “no cost” weekly Savings Beyond Price™ e-Newsletter at www.Strategicva.com. You will also get a copy of my e-book “Your Target Blueprint for Supply Chain Management Success”, as a bonus.
Just How Good Is Your Supply Chain Radar?
Just How Good Is Your Supply Chain Radar?
A recent client I was working with on a Supply Chain Scorecard Program and then subsequently a Strategic Value Analysis® Program vehemently disagreed with many of the metrics and benchmarks that SVAH utilized to identify savings opportunities for their organization in all of their products and commodity areas. Now keep in mind, I was dealing with the VP of Operating Room Services who up to this point had run their product standardization and evaluation committee (for 7-years prior) before we were engaged by their system to perform our supply chain savings services. No matter what product and/or commodity group I showed on their savings opportunity scorecard he would disagree that I did not have my facts correct or that the benchmark metrics were outright wrong.
Is it conceivable to think that you can know where all of your savings opportunities are before they inflict damage to your bottom line?
Do you want be proactive instead of reactive?
For example, we were being challenged on their IV Set usage per case mix adjusted patient day, whereby the metrics showed a savings opportunity of $155,000 on an $850,000 annual spend, an 18% savings opportunity!Interestingly enough, this hospital just completed their own analysis by their product evaluation committee on their IV Sets and concluded that everything was in-line and that they were optimized on their costs and quality (I did not see any supporting data other than discussions from committee meeting minutes that could support their findings). I held firm, I knew my numbers were good and I had over 301 hospitals in my database to back me up that I was in the “Savings Zone,” whether my client wanted to believe me or not.
As it occurred we continued to work together and set up their supply value analysis program which of course IV sets was at the top of the list. Now the unique thing about our company is that we have seen IV Set studies at 50 different hospitals and health systems, so we get to bring all the best practices, questions and strategies to the table for our clients. Here is what we found out with this particular IV Set Study/Analysis.
- The Good News! They had the best price – they were part of a large IDN and had a direct manufacturer agreement, no price savings could be achieved. We compared them to our best price database and they ranked in the top 95th percentile.
- Not labeling was costing them thousands - All the departments were not date/time labeling their IV Sets correctly or at all to let other nurses know when an IV Set was set up on the patient, therefore they would automatically change the set (often too soon) on the patient to insure quality. The best practice is to change the set between 72-hours and 96-hours. Because they were not labeling correctly a good Nurse would change the set so not to endanger the patient by leaving the IV Set on too long. $25,000 to $35,000 in utilization savings!
- They had been sold a wrong bill of goods – 11-months prior to SVAH’s engagement, the hospital’s product evaluation committee had approved the implementation of an IV Set locking device that cost $5.00 (in addition to the IV Set cost) to be utilized solely on central intravenous lines for an annual added expenditure of $5,000. This made sense to all and would add to the quality of care for patients with the central lines. What happened was, the product was then misused on every IV Set throughout the entire hospital which added $120,000 in added cost as opposed to $5,000. $115,000 overrun! (They did not know this overrun situation was happening because they had no system to monitor their commodity costs) The hospital then re-evaluated and found that the product was not required at all, they returned to using sterile tape! $120,000 in savings.
- There is more! - the client opted not to pursue this product category until a later date because of the major changes that the two opportunities above would make to their nursing staff, but they will then revisit this product line to look at the value/function of the products being utilized. There could be thousands more here!
Up to this point, my client did not have the tools or knowledge base that SVAH brought to the table that would uncover these hidden/invisible savings opportunities in their hospital’s supply chain. My client did not believe that there was that much savings on this particular commodity grouping but was only working with what they knew from their product evaluation committee and existing supply intelligence told them. It was not on his radar screen!
Your Partner In Innovative Savings,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
P.S. If you are looking to establish, enhance, re-energize and dramatically improve your value analysis program (or you have hit the wall on savings) then our Certified Value Analysis Leader Program to be held on June 24-26 is the ticket for you. And, as a bonus, you will receive a one-year subscription to our new Value Analysis Resource Web at “no cost” to you. Note: Only 17 days left to save on our early bird rate of $1,192.00! click here to learn more
It’s About Time
It’s About Time!
The 2008 Hospital Financial Managers’ Supply Chain Survey documents that one of the top areas where both MMs and CFOs agree is that there are “tremendous” savings opportunities is contract management.
Yet, our own surveys show that MMs spend the least amount of their time and effort in this area of their responsibility, an area where 7% to 15% in new savings can be achieved. How can we reconcile these two assessments?
It’s my opinion both of these analyses are correct! I can make this statement because when I talk to MMs about their contracts (supplies, and purchase services) they tell me that they know that there are big savings in their contracts, but they don’t have the time, point of reference or tactics to ratchet down these huge costs any further.
Considering that most hospitals’ purchase services are equal to or greater than their supply expenses, this is a vast unexplored area where there is a lot of ripe fruit to be picked. Now how can we get this fruit harvested?
The answer: First, automate your contract administration function so you can have the time to save. Second, benchmark your contracts so that you know where to save. Third, perform value analysis studies on your contracts so that you can wring the towel dry on savings. Lastly, set performance standards for your contractors so that you can be assured that you are getting what you paid for.
With this said, isn’t it about time we ALL start focusing on the 50% to 55% of our supply spend that we have been overlooking for years.
Your Partner In Innovative Savings,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
P.S. If you are looking to establish, enhance, re-energize and dramatically improve your value analysis program (or you have hit the wall on savings) then our Certified Value Analysis Leader Program to be held on June 24-26 is the ticket for you. And, as a bonus, you will receive a one-year subscription to our new Value Analysis Resource Web at “no cost” to you.
