Savings Beyond Price -Weekly eNewsletter – March 18, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Is Experience Enough?

Greetings,

Don Moyer of ThoughtForDesign.com tells us that “Wisdom may come from experience, but mere wisdom isn’t always enough to tackle the complicated challenges facing today’s senior managers”.

What Moyer is talking about is that when faced with complex challenges supply chain managers in particular fall back on their past experience to solve their new multifaceted problems.  When in fact, a more insightful solution is called for that isn’t in your old playbook! 

A good example of this pattern is the trend toward of switching GPOs to obtain a better savings yield. Our past experience tells us that “price is king” and we must push the envelope to continue to reduce our pricing.

This “experience trap”, as authors Kishore Sengupta and Taretk K. Abdel-Hamid call it, can be misleading and ambiguous given that all GPOs are CREATED EQUAL and won’t actually reduce your cost in the long-term.

Supply chain managers need new insights to comprehend that price is “only the tip of the iceberg” and that real, sustainable and long-lasting savings can only be found in their utilization misalignments (in-use cost) where 79% of all new savings reside. 

You can either ignore these new insights or pick up on them, when faced with complex problems, to ensure that you complement your long-held empirical experience with new ways of doing things for bigger, better and longer-lasting results.  squeezing the towel dry in supply chain savings one penny at a 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. If you are looking for new insights with your supply value analysis program you might want to download my white Paper “EVOLUTION” to gain new wisdom for bigger, better and longer-lasting results.