Savings Beyond Price -Weekly eNewsletter – April 29, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Rethinking Your Supply Chain

Greetings,

“Companies (and healthcare organizations) are searching for the right combination of smart cost cuts, strategic investments to get them through the current recession and position them to succeed when the economy rebounds.  The question everyone is asking: What will be the new normal?” This is the reaction of Jean V. Murphy, a writer for Supply Chain Brain, to the realities of our new economy.

If there was ever a time to rethink your supply chain strategies this is it. No longer can it just be about price which only represents 1%, 2% or 3% savings for your healthcare organization annually. If your hospital, system or IDN wants to remain viable in this new economy, they and you will need to ATTACK all of your supply chain cost – all at the same time.

Because the NEW NORMAL, as Murphy calls it, will still mean reduced demand for your healthcare organizations’ services for many, many years, even if President Obama passes his national healthcare in this congressional session. Nothing happens quickly in Washington!

The only way for your healthcare organization to survive in these turbulent times is for them to doggedly manage and control their fixed and viable costs. Since your supply chain expenses are the second largest viable expenditure for your hospital, system or IDN this is YOUR responsibility.

Case in Point! We are working with a large healthcare system that is speeding up their plans to ratchet down ALL of their supply chain cost (price, utilization, inventory, physician preference items, contracts and logistics) at a breathtaking pace now that they realize what the impact of the NEW NORMAL means to their system. No longer is their corporate office accepting weak excuses from their hospital divisions on why the timing isn’t right for these initiatives, because they recognize that cost is our enemy and we must always be on the attack.

Is this the mind-set you too have with your supply chain cost? If not, why not, since your healthcare organization’s survival depends on it!

 

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 interested in moving beyond price savings alone you might want to revisit my White Paper, “Building a Savings Factory” to get your saving machine humming again.