Are You Hearing the Voice of your Customers?
The term voice of the customer or VOC is used to describe your customers’ needs, wants, desires, and their perceptions of what they need to get their jobs done. It’s only through skillful research that you can understand your customers’ unique functional requirements so that you can cost effectively design, deliver and improve the products, services and technologies they use.
From my prospective, we are too often missing the VOC of our customers in healthcare. By this statement I mean we aren’t spending enough time or energy identifying our customers. No product, service or technology has just one customer value group, since one size does not fit all customers’ requirements. Consequently, this oversight has lead to massive over-standardization in healthcare. This is costing your hospital, system or IDN hundreds of thousand, maybe even millions of dollars annually.
We see this observable fact with just about every client we work with. Just the other day, one of my consultants uncovered that one of our clients had standardized on three pacemakers, with an average cost of $6,800. When they changed their pacemaker product mix, by adding a few more pacemakers, they lowered their average pacemaker cost to $4,200. The effect! Hundred’s of thousands of dollars a year were saved simply by really listening to the VOC.
You too can achieve these kinds of savings by collecting and analyzing data to understand your customers’ practice patterns, trends and variations. You can interview your customers to really understand what they absolutely positively must have to do their jobs and observe how they use their products, services or technologies in the real world. Then and only then, will you be able to say that you truly and wholly understand the voice of your customers.
Start at the Top!
Savings Savings Beyond Price -Weekly eNewsletter – August 27, 2008
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Start at the Top!
On August 28th we will be sharing our ideas on “Offsetting Price Increases in Tough Times” at our monthly webinar. This webinar is designed to be a primer to get you into high gear to counterbalance your rising product cost by employing other saving strategies. However, it won’t be the answer to ALL of your change initiatives because all sustainable change needs to start at the top of your healthcare organization.
Whether you’re using lean, Six Sigma or value analysis to initiate change at your hospital, system or IDN, starting at the top is critical. By this I mean, if you don’t have your C-suite’s uncompromising and unqualified support for what you are trying to accomplish, you will quickly hit a brick wall that you won’t be able to jump over, craw under or circumnavigate.
The easiest way to do so is to establish an executive council to lead your lean, Six Sigma or value analysis initiative with a C-suite member chairing this committee. It would be this council’s charge to guide, monitor, direct and arbitrate disputes on you way to your ultimate success.
If you are unable to gain a commitment for such a council from your C-suite you are then, I’m sorry to say, left to your own devices to keep your initiative afloat in stormy waters. But don’t let this discourage you since “things change and people change” thereby giving you another opportunity to start at the top when the climate is just right for change.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P.S. Did you know that the “Easiest (and fastest) way to save money” is with our Value Analysis Leader Resource Web? That’s right, literally hundreds of million-dollar savings ideas, plus scores of educational materials right at your finger tips — when you need them most.
P.P.S. Don’t forget to check out my new blog article “ How to Create Wining Value Teams”. This blog is all about incentivizing to save, which is one of the key ingredients in creating winning value team(s).
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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.
