Robert T. Yokl

President & Chief Value Strategist

 

Value Analysis is all about SCAMPER

Greetings,

If you aren’t using the techniques of SCAMPER to boost your value analysis savings and improve your quality, then I have a big savings idea to share with you today.  Here’s what I’m talking about!

Value analysis is all about “the search for lower cost alternatives to meet your desired functions (primary, secondary and aesthetic) reliably”.  Whereas, SCAMPER is a proven technique to help you reach this goal. That’s because every new idea is just an addition or modification to something that already existed which SCAMPER helps you flush out.

So if you can modify, adjust, or alter a product, service or technology you are buying you will dramatically increase your odds of coming up with new and better ideas that can save your money or improve your quality.

Here’s a mnemonic developed by Bob Eberle to help you remember the SCAMPER concept when you are applying it to your value analysis studies:

Substitute something: Replacing a disposable with a reusable.

Combine it with something: Adding it to a kit, tray or pack.

Adapt something to it: Add fax chips to PCs to eliminate fax machines.

Modify or Magnify it: Reduce the size, volume or bulk of a item.

Put it to some other use: Use gloves for ice packs (it’s been done).   

Eliminate something: Removing items from kit, tray or pack.

Reverse or Rearrange it: Don’t use custom packs at all (it’s been done).

Simply put, the SCAMPER mnemonic is all about searching out new and better alternatives to what you are doing and what you are buying now and will force you and your VA teams to change your thought patterns. This in turn will change your thinking about how you can save money or improve your quality.  It will open up whole new vistas and pathways that will give you and your VA teams surprising insights and ideas on how to save money in every corner of your healthcare organization.

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. If your value analysis team(s) is in a slump you may want to invest in our two-day on-site advance value analysis training program to move your value analysis teams and committees to the next level of savings performance. 

What happens when you run out of price savings, or as I like to say, “What happens when the fish stop jumping into your boat?”  At a recent seminar that I conducted a MM’s answer to this question was “Look for a new job”.  I don’t think that’s the right answer to this question — do you?

Reality check: Your vendors’ cost for transportation, energy, plastics, etc. (or 80% of the things your hospital buys) will continue to escalate. So who do you think your vendors are going to pass this cost along to? 

Yes you got it right – YOU!

I was just talking to one of my major teaching hospital clients the other day who is scrambling to find more savings in their orthopedic and spine implants, but even after benchmarking his cost with us and bidding his implants using our benchmarks as a guide, he only shaved a few percent off his implant prices. By the way, this client belongs to two GPOs and still can’t get better prices even with his own custom contracts on implants

The next day I talked to another client of ours who is the Vice President of Purchasing for a six hospital system who is racking his brain on how to get better prices for his hospitals, when he never had this challenge before.  Until recently, he always could find a new and better price savings on any commodity he was purchasing.

What does this all mean to you!  If you are betting your career on finding new and better prices for the commodities you buy in the future you are going to be in for a rude awaking – it isn’t going to happen.

On the other hand, if you look beyond price you can make a quantum leap forward in utilization savings that are never ending and are right in front of your eyes just waiting to be harvested.

Savings Beyond Price -Weekly eNewsletter – June 10, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Dollarize to Save Big

Greetings,

One of the techniques that we teach in our advance value analysis training programs is to “dollarize to save big” so that you can, for the first time, negotiate out unwanted and unneeded functions and features on your customer’s requested new (or existing) products, services and technologies.  This is a powerful tactic that you need to understand and then consistently employ in all of your commodity negotiations with your customers.

Here’s an example of what I’m talking about!  There was a recent study conducted by J.D Power asking potential car buyers what functions and features they desired in their cars. This was done without showing them the price of these options. Naturally, one of the highest rated features (second on this list) was a navigation system, but when these same buyers were shown the cost of the navigation system ($1,500) their ranking for this option dropped from second to 10^th on their wish list.  

Why did this happen?  Because when you dollarize the functions or features for any commodity purchase you give your customers a REALITY CHECK to make sure that they absolutely, positively need it.  In most cases, they won’t select a high price option if they can’t value justify it in their own mind. 

Here’s another example?  If you would dollarize how many ports you clinicians need in your IV sets ($1.00 each), you will find most clinicians won’t select more ports then they actually need to get their job done. On the other hand, if you ask these same clinicians how many ports they require in their IV set without dollarizing, every one of them will select the maximum amount available. It’s just human nature to ask for more then you really need to give yourself a safety zone to work in. 

So, if you want to dramatically reduce the total cost of everything you are buying don’t forget to “dollarize to save big” when you are negotiating with your customers on the things that they say are really important to them. You will be pleasantly surprised at the savings results!

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. Is it time to think about advanced training for your value analysis team/committee?  With many hospitals about to start a new Fiscal Year with more challenging savings goals than ever before, you may want to give your teams an added advantage with advanced value analysis training.

 

What I learned at this meeting was how much you can learn from your peers, if you just take time to talk to them. For instance, I facilitated a discussion between the association’s members on ideas for joint ventures between their hospitals or systems in areas that their GPOs don’t cover or have a weak offering.  When one of the participants asked if it would be a good idea to joint venture with industries in her region too on energy, maintenance supplies, snow removal, etc., I thought this was a brilliant idea that no one had thought of until she raised the subject. 

That’s what learning from your peers with pride is all about! It’s about taking the time to go to your association’s meetings and conferences (regional and national), so that you can talk to your peers about what they are doing, thinking and planning to improve their supply chain management.

There is no better way to invest your time that I can think of to keep you on top of your supply chain game.  It’s like having a business support group that is always ready to answer your questions, discuss your problems and give you new ideas to make your job easier and more fun. 

Savings Beyond Price -Weekly eNewsletter – June 10, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Five Myths vs. Facts!

Greetings,

Over time we all develop a belief system that is based on our life experiences, biases, and traditions but are these viewpoints myths or are they facts? These collective perspectives or assumptions that we gather over time can relate to our supply chain world as well as our life!

From a supply chain perspective if these beliefs and assumptions aren’t tested, inspected and examined vigorously we could be overlooking big breakthroughs in our supply chain management. Here are five myths versus facts that you should be reexamining in order for you to remove any performance gaps in your supply chain operations:

 

1.                Benchmarking Doesn’t Work

I can’t count the times a MM has told me that they believe that benchmarking doesn’t work because it is inexact science or we are different. By holding this belief, these MMs are missing the opportunity to save millions of dollars annually.

To the contrary, benchmarking is an art and science that has been proven in every industry, including healthcare, to be the best methodology to identify gaps in an organization’s performance. This leads us to search out best practices to fill those gaps that are costing us thousands, maybe even millions of dollars annually.

 

2.                Price Savings are Forever

I hope everyone understands that “nothing is forever”, but too many MMs believe that this truism doesn’t apply to price savings when the facts inform us differently. With few exceptions, hospitals, systems and IDNs are just holding the line on inflation (3.9% for 2008) with their price savings, not beating it. This fact would lead me to believe that MMs should be searching out other sources of savings if they want to beat the inflation rate each and every year. 

 

3.                Utilization Management isn’t a Priority

Considering that price savings are slowly disappearing, what better source of new savings (7% to 15%) could there be than utilization (in-use cost)? How then can MMs IGNORE these big savings opportunities by stating that it isn’t a priority?  Shouldn’t the highest level of savings available at a healthcare organization, with the best ROIs, be an uppermost priority to every supply chain manager?

 

4.                Value Analysis is all About GPO Contracts

Every time we visit with a value analysis team we find them evaluating their new GPO contracts, with very little emphasis on the waste and inefficiency in their supply chain.

Value analysis ISN’T about GPO contracts; it’s all about functional analysis, which has nothing to do with GPO contracts. When will we get these two disparate supply chain activities designations right?

   

5.                Purchases Services isn’t in our Scope

I was just told again last week by a value analysis manager that he doesn’t believe that purchase services should be in the scope of his supply value analysis program. Then I asked him who did he think should be functionally analyzing these contracts? 

The way I see it your department heads won’t, your supply chain department is too busy, and your administration doesn’t even have these multi-year million dollar purchases on their radar screen. That’s why purchase service contracts MUST, in my opinion, be in the scope of your supply chain department and evaluated by your value analysis teams. To do less is to relinquish hundreds of thousands of dollars of savings annually.

 

These five myths vs. the facts should raise your consciousness to the possibility that all commonly held beliefs and assumptions aren’t always factually true. That’s why you need to challenge not only your own beliefs and assumptions, but those held by others in your healthcare organization that might not pass the test of time.

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. Don’t forget to sign up for this ONE-TIME-ONLY “How to Create, Manage and Maintain High Performance Value Analysis Teams”  NO COST webinar on June 17^th (Eastern) at 1:00pm (Eastern). This webinar is exclusively designed for those hospitals, systems and IDNs who are seriously looking for new and better strategies, tactics and techniques to take your supply value analysis program to the next level of savings performance.

Well, I found early on in my career that it was easy to get the best pricing on everything that I bought if I contracted through my GPO or bid a commodity that wasn’t under a GPO contract.  I didn’t need to lose sleep over this important, but very manageable activity any longer.

That’s when I realized that value analysis was where the action, opportunities, and recognition were in any healthcare organization. From that point forward, at every hospital, system and IDN I worked I immediately formed value analysis teams to root out the waste and inefficiency in my healthcare organization’s supply chain.

By doing so, I immediately saved my hospital, system or IDN millions of dollars (beyond price) annually, and gained a reputation as a superb material manager.   This reputation wouldn’t have come to pass if I decided to use my skills to shave two or three cents off the pencils I was buying.

More importantly, because of the high visibility my value analysis teams attained in these healthcare organizations everyone in the organization knew us by our achievements (better quality, service and reduced cost).  When it came time for my annual pay raise or bonus negotiations my senior management never quibbled about giving me a raise or promotion because they had seen my work first hand in a very observable way.  

So if you are looking for more money, more recognition and more promotions in your healthcare organization, I would recommend that you “focus on what matters” – value analysis. And let your price savings become an automatic and systematic task that shouldn’t take much of your valuable time at all.

Savings Beyond Price -Weekly eNewsletter – June 3, 2009

Robert T. Yokl

President & Chief Value Strategist

 

No Magic Bullet

Greetings,

I think that there is a tendency in healthcare for supply chain professionals to seek out a “magic bullet” that will be a quick fix to ALL of our supply chain expense management challenges. But is this really the best path for you to take to improve your supply chain performance?

For years we all thought that the big quick fix was to have high compliance with our GPOs. Then every one thought the road to success was to purchase a new MMIS system to give them high visibility in their supply spend. This was followed by a massive movement by hospitals, systems and IDNs to cleanse their data. Now we all seem to be jumping on the data analytics train as if this is ultimate quick fix to all our supply expense management issues.

This is the road often traveled by supply chain professionals in their search for better performance, but these quick fixes will never sustain long-lasting bottom-line results. If you want to be better than good in your supply chain performance you will need to choose systemic solutions, not quick fixes.

We have worked with numerous healthcare organizations that have employed all of the quick fixes I just talked about, but they still haven’t optimized, institutionalized or operationalized their supply chains’ savings efforts. This is because these organizations haven’t systematized these efforts into a cohesive operating plan, but instead jump from one quick fix to another hoping that this new “magic bullet” will be the definitive answer to all of their supply expense management problems.

It is now high time for healthcare organizations, with limited time, money and resources, to ditch these quick fixes in favor of a strategic, systematic and programmatic performance improvement effort that seamlessly fits into a carefully thought out supply chain expense management short and long-range plan.

This way when a new saving idea, suggestion or scheme comes across your desk you won’t get caught up in quick fixes, band-aids or costly fads that don’t meet your exact strategic or tactical goals and objectives for any given year.

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. Don’t forget to sign up for this ONE-TIME-ONLY “How to Create, Manage and Maintain High Performance Value Analysis Teams”  NO COST webinar on June 17^th (Eastern). This webinar is exclusively designed for those hospitals, systems and IDNs who are seriously looking for new and better strategies, tactics and techniques to take your supply value analysis program to the next level of savings performance.

 

]]> http://savingsbeyondprice.com/savingsblog/how-to-create-manage-and-maintain-high-performance-value-analysis-teams/feed/ 0 http://savingsbeyondprice.com/savingsblog/are-you-getting-serious-about-value-analysis/ http://savingsbeyondprice.com/savingsblog/are-you-getting-serious-about-value-analysis/#comments Wed, 03 Jun 2009 13:43:49 +0000 Robert Yokl http://savingsbeyondprice.com/savingsblog/?p=134 We are seeing a very positive emerging trend in healthcare today: hospitals, systems and IDNs are getting serious about value analysis. The question I have for you is “Are you getting serious about value analysis too!”

For years value analysis was something we told our bosses and colleagues we were doing to make them think we were on the cutting edge of supply chain management. We knew however in our heart of hearts that our team(s) or committee(s) weren’t generating the savings and quality improvements that they could or should be. We knew our team or committee members weren’t attending meetings, that we weren’t getting management support that we needed to be successful and that our department heads and managers too often placed barriers in our path that prevented us from making savings happen.

That was then, this is now!  We are now seeing hospitals, systems and IDNs providing formal advanced training for their senior management and value analysis teams in the classic tenets of value analysis, organizing their teams to save and seeking out new power tools to manage, monitor and control their supply value analysis program. They are hiring professional trained value analysis coordinators, managers or directors to manage their supply value analysis program.

Why Now, not then? No hospital, system or IDN, with their dip in revenues due to the recession, can leave a significant 7% to 15% in utilization supply expense savings on the table untouched. In the past this 7% to 15% seemed nice to have, but now is critical to their survival.  That’s where value analysis comes to the rescue!

Value analysis, if practiced patiently, fervently, artfully and scientifically is the vital savings engine that all healthcare organizations (large and small) need to make Savings Beyond Price™ quickly happen. But this budding success story won’t materialize unless your senior management, team(s) or committee(s) has the requisite tools, training and executive management support required to create, manage and maintain high performance value analysis teams.  

So if your hospital, system or IDN is getting serious about value analysis just remember this important salient fact: value analysis isn’t about establishing a value analysis team or teams and then telling them to GO SAVE MONEY!  It’s all about having highly trained, motivated and incentivized VA team leaders and team members that understand, internalize and vigorously apply the six-step value analysis methodology to uncover and then implement any and all savings opportunities for your healthcare organization. 

Savings Beyond Price -Weekly eNewsletter – May 27, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Are You Really Different?

Greetings,

When we discuss our benchmark findings with our clients they often say, “My hospital is different”.  This is frequently their first reaction to savings opportunities we have uncovered for them with our UTILIZER™ Dashboard. The question they should be asking themselves is, “why are we different?

Here’s why! Hospitals of the same size, type and with similar operating characteristics should be utilizing, within an acceptable range, their individual products, services and technologies at the same velocity and intensity.

If you find that you are NOT within an acceptable range (plus or minus 3%) through benchmarking, then you need to seriously question why not. In some cases, you will find that you are indeed different and your benchmarks need to be reset to account for your legitimate differentiation. Here are three reasons in which hospitals are genuinely different:

1.                Unique Conditions – One hospital we worked with was utilizing a huge quantity of disposable bath systems only to find that they didn’t have showers in their patient rooms. This physical constraint required this hospital to use more of this product since they had no alternative.

2.                Management Fiat – A client’s corporate office mandated that their four hospitals standardize on hyper-allergenic gloves throughout their facilities. Naturally, they would have more dollars in this category of purchase than their peers.

3.                Operating Culture – It was decided by another client of ours that they would employ Oxisensors on their patients using PCA Pumps for Pain Meds. to make doubly sure they were safe. This substantially increased the volume of Oxisensors this hospital was buying.

4.                Tradition & Rituals – Another client of ours placed logos on many of their products (coffee/soda cups, patient water cups, carafes, etc.) that increased the cost on all of these commodities. This certainly made them different than most of our clients.

So as you can see, there are justifiable reasons why your hospital might be DIFFERENT in the way you utilize your products, services and technologies.  However, these outliers are not be construed as common practices in our industry. That’s why you need to measure and observe why you are different, before you can make the case that your hospital is really different!

 

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. Our clients find that our UTILIZER™ Dashboard is an easy way to indentify utilization misalignments, instead of just “skimming the surface” of their savings.  Take a “test drive” today!

A much better way is to share the workload with your value analysis team members. I will guarantee that by doing so, you will increase your savings output by 300%, 400% or even 500%. If you don’t have a value analysis team(s) now, then it is high time you establish one to lighten your workload, increase your throughput and boost your buy-in on your savings ideas. 

It then becomes your job to facilitate, coach, train and consult with your VA team leaders and VA team members to ensure that your VA team is on track, on budget and on target to save big for your healthcare organization.

One of the secrets of personal productivity is DELEGATION: Assigning others your responsibility, but not your accountability to get things done! That’s what a VA team can do for you. It will provide you with many extra experienced hands that you will need to operate at peak performance.  The alternative is to continue to be swamped, frazzled and overworked while getting little, if any, real, robust savings work done.  

Savings Beyond Price -Weekly eNewsletter – May 12, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Greetings,

Do you know how much supply expense savings you are leaving on the table by “Skimming the Surface” of your supply chain savings?  The answer is 7% to 15% of your total supply spend, or 1 to 2 million dollars per occupied bed.

For example, if your hospital averages 180 occupied beds, you can almost guarantee a savings of $1.8 to 3.6 million over a 12 to 18 month period.  You do the math for your healthcare organization. I can promise you that new utilization savings opportunities you are losing today will outshine your current and even future GPO savings. 

You can dig deeper and broader into your supply chain for new, different and more substantial savings opportunities that won’t be uncovered by traditional supply cost management efforts. You will need to mimic the methods and practices of Sherlock Holmes (the fictional 19th century English master detective) to discover these hidden savings.

Holmes was famous for his intellectual prowess and renowned for his skillful use of astute observation, deductive reasoning and inference to solve his most difficult cases. You too will need to observe, deduce and greatly expand your investigative skills to determine how your customers are actually employing the products, services and technologies you are buying for them.

In most situations, you will find that your customers are swamped with work. They don’t have the time to stop and analyze the best use of this product, service or technology, if they are being wasted, or if there is a lower cost alternative that could meet the required function.

That’s why it’s your job (or your value analysis teams) as a supply chain professional, to avoid “Skimming the Surface” of supply chain savings. Instead, become a supply chain master detective who performs detailed investigations in order to uncover your hospital, systems or IDNs utilization misalignments.  That’s where your biggest savings opportunities reside today — not in price. 

 

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S.  If you are looking to get better than good at project management, you might want to sign up for a “test drive” of our Utilizer™ Dashboard so that you can see for yourself how our project management module will enable you to easily manage multi-projects with two clicks of your mouse.

It’s the same with the effects of our recession today. We have a great opportunity in these tough times to use this crisis to our advantage. Management at most healthcare organizations will be open to new and better savings ideas.  Our department heads and managers will be more malleable when it comes to saving money. Even our doctors will be more open to discuss how they can help us in this predicament.

Case in Point! One hospital client of ours told us just last week that their surgeons asked them to establish a committee that would sit down on a regular basis to help their operating room director to identify and then implement new savings ideas.  This hospital is being very proactive with their Value Analysis and Lean savings programs and the surgeons want to make a positive impact as well.

This is an unprecedented turn of events for this hospital, which I believe can be replicated nationwide, if only you decide to turn these tough times into a great opportunity to get your savings ideas heard, accepted and then implemented.

This isn’t a time to be frozen in your tracks.  To the contrary, it’s the best time that I have seen in decades for you to maximize your savings efforts by engaging your executive management and hospital staff in meaningful discussions that result in even more productive and efficient methods and practices than ever before.

Savings Beyond Price -Weekly eNewsletter – May 6, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Too Many Competing Priorities

Greetings,

One thing I have noticed lately is that healthcare organizations have too many competing priorities to keep on track, on budget and on target.

We see this phenomenon with our LEAN Value Analysis Program that we are installing at our clients’ facilities. Once we arrive on the scene, we immediately find that we are competing for time, money and resources with Six Sigma, Quality Excellence, LEAN Management and other initiatives that are also of a HIGH PRIORITY.

With so many competing priorities, how do you and we make our project deadlines, achieve our savings and quality goals and at the same time effectively balance our limited resources across multiple projects? 

In brief, the answer is to sharpen your PROJECT MANAGEMENT skills. Project management isn’t just a buzz word; it is a body of knowledge honed over many years that will give you the techniques, tools and tactics that will enable you to build a solid foundation to manage any and all project lifecycles that you are faced in healthcare today.

Just the other day a client told me that one of the most effective project management tactics that he had found was to automate his project management process. Before he had done this, he said he had hundreds of projects that he didn’t know the status of, but now with two clicks of his mouse he can see the progress on all of his projects at one time. He now tells me that he can finally sleep at night without worrying that his projects aren’t on time and on budget.  

I can promise you that your hospital, system or IDN won’t be slowing down any time soon on their multi-projects with competing priorities. Therefore, you will need to find ways to increase your efficiency and effectiveness on the multi-projects that your management assigns to you and your supply chain team.  Project management is the answer!

 

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S.  If you are looking to get better than good at project management, you might want to sign up for a “test drive” of our Utilizer™ Dashboard so that you can see for yourself how our project management module will enable you to easily manage multi-projects with two clicks of your mouse.