Choosing Cost Reduction Strategies for 2009
Savings Beyond Price -Weekly eNewsletter – December 11 2008
Robert T. Yokl
President & Chief Value Strategist
Choosing Cost Reduction Strategies for 2009
An article in the Hospital Materials Management newsletter predicts that GPO pricing will be going up in 2009 by as much 3.6%, even with the decrease in oil prices. Therefore, if you are looking to reduce your supply expenses in 2009 with your GPO contracts this isn’t a strategy you can count on to accomplish this goal.
That’s why when choosing strategies for cost reduction for 2009; you should be looking for inflation proof stratagems to keep your cost down permanently, not episodically. Here are some recommendations:
1. Re-specify Everything you Buy and Save Big
Since things change and people change, the products, services and technology that you are buying today aren’t being employed the same way that they were where when you first specified them 5, 7 or even 13 years ago. That’s why you can dramatically reduce your cost on almost everything you buy by re-specifying your customer’s exact requirements today.
2. Benchmark your Purchase Service Contracts
We are finding there is an unclaimed gold mine in all hospitals purchase service contracts, if only hospitals would start to trend, track and benchmark these high ticket purchases. Just recently, we identified a $4 million plus (i.e., 26.4%) savings opportunities in a client’s total purchase service spend. This dramatic case study should alert your attention to focus on the supply chain operational area. Paying more mindful attention to this could equate to huge savings.
3. Attack your Utilization Misalignments
I can’t emphasis enough that your hospital’s supply utilization misalignments is another virgin area of your supply chain operations that has been overlooked, neglected, or ignored for years. This is where 79% of your new savings could be coming from in the future. Don’t wait any longer to tap into these huge unending steams of savings opportunities.
So when you are choosing your strategies for cost reduction in 2009 don’t overlook these three inflation proof Savings Beyond Price™ stratagems that will boost your savings yield by 3%, 7% or even 15% in less than 12 to 18 months.
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 know more about how to master your purchase service contracts why not check out my article “The Last Frontier in Supply Chain Management” in the December 2008 issue of HPN magazine.
P.P.S. Don’t forget to check out my new blog article “New Thinking for Turbulent Times” which will show you how to work smarter, not harder in this economic downturn.
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