Leading Change
Savings Beyond Price -Weekly eNewsletter – February 4, 2009
Robert T. Yokl
President & Chief Value Strategist
Leading Change
Every crisis has seeds of opportunities for those who are prepared, persistent, persuasive and fearless! If ever there was a time when supply chain professionals need to LEAD CHANGE at their healthcare organizations…it’s now!
With few exceptions hospitals, systems and IDNs are bleeding red ink or at best are having one of the worst financial years in decades because of reduced census, growing receivables, shrinking investment income and higher capital cost. I liken this to a tsunami!
To lighten the load on your healthcare organization’s finances, supply chain professionals need to LEAD CHANGE in their healthcare organizations by:
1. Developing a new vision and strategy for change
The old vision and strategy of just saving on the price isn’t going to work in this new healthcare economy since prices are going up – not down. Your new vision and strategy should be focused on your utilization or in-use cost where on average 26% can be saved almost overnight. That’s were your new and better savings reside!
2. Communicating your change vision to all levels of management
Making change happen is a team effort, not an individual endeavor. Therefore, you must get your senior management and department heads and managers to buy into your vision.
This can best be accomplished with white papers, presentations, and newsletters circulated throughout your organization that would get everyone talking, working and supporting your vision. Yes, this does take some time and effort, but this is what leadership is all about. Talking and walking the walk!
3. Creating high-performance value analysis teams
To implement your new vision and strategy you will need to create high-performance value analysis teams, and not accept your current so-so value analysis team’s performance. I haven’t seen a value analysis team(s) that can’t raise their performance by as much as 10-fold if they are reorganize, reinvent and reinvigorate to save money in new ways.
4. Generating sustainable, measurable and new utilization savings
As I have already mentioned, price savings alone won’t lead your healthcare organization out of this crisis. Only by attacking your utilization misalignments will you make a BIG dent in your supply expense budget. And these sustainable, measureable and new savings will go right to your bottom line where your healthcare organization needs the impact most.
I have just outlined an action plan for you to LEAD CHANGE in your healthcare organization in these uncertain times. This will position you to be a hero instead of a victim in the tsunami that hit us in October 2008.
As I see it, supply chain professionals have an extraordinary opportunity to LEAD CHANGE in their healthcare organization because there are still millions of dollars of untapped savings beyond price to be liberated in your supply chain that you never thought was possible.
Now go and LEAD CHANGE before it’s too late to do so!
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. If you would like more information on how to reorganize, reinvent and reinvigorate your value analysis teams to be better than good you might want to download my White Paper” Strategic Value Analysis®: Savings Beyond Price™” that will give you an insiders’ view on how to do it.
When Savings Stall
Savings Beyond Price -Weekly eNewsletter – December 17, 2008
President & Chief Value Strategist
When Savings Stall
It’s no secret that price savings aren’t king any longer. I hear this truth from supply chain professionals every day who tell me that their GPO, capitation, standardization and custom contract savings have stalled or worse yet, are on life support. Is this your situation?
If so, take a deep breath and then dig and drill down even deeper into your supply chain to uncover the waste and inefficiencies, misuse and value mismatches in your products, services and technologies. By doing this you will find as much as 26% in new untapped savings just waiting to be unearthed. That’s where 79% of your new savings will be coming from in the future. Trust me when I tell you that this is an unassailable fact…not fiction!
The bottom line is that we are in turbulent economic times and your relatively easy heretofore price savings are now history. More importantly, inflation has eaten into ALL or MOST of the savings gains that you have made over the last few years. It’s now time in 2009 to refocus your cost savings efforts on Savings Beyond Price™. This is where a whole new world of virtually untouched savings will open up to you.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P..S. Let us show you how easy it is to unearth these hidden savings with a “test drive” of our Utilizer™ Dashboard where we do all the heavy lifting and you get all the savings.
P.P.S. Don’t forget to check out my new blog article “The Best Advice I Ever Got” that I’m sure will show you how not to become absolutely crazy.
Price Is No Longer King
Savings Beyond Price -Weekly eNewsletter – October 9, 2008
President & Chief Value Strategist
Greetings!
Price Is No Longer King!
It’s no secret that rampant raw-materials inflation (9.8%) is driving product prices up for your healthcare organization. One client of ours told me that his trash can liner prices just went up 40%. Ouch!
That’s why you need to take a deep breath and then dig and drill down even deeper into your supply chain to uncover the waste and inefficiencies, misuse, misapplication and value mismatches in your products, services and technologies. It is there you will find as much as 26% in new savings just waiting to be harvested.
What are you waiting for? Too many supply chain professionals are holding back from attacking these huge savings opportunities because they think that somehow their GPO will find a way to hold back these price increases. Don’t let the facts confuse you with this fiction. Price is no longer king, and let’s face it we’re in turbulent economic times that call for new strategies, tactics and techniques to right our boat.
It’s now time for you to take a deep-dive into your supply chain to find your utilization misalignments in order to minimize your healthcare organizations exposure to this broadening predicament that is universal to all businesses. How you beat the market is by finding better ways to do things other than just hope that your GPO will pull a rabbit out of a hat and make your price increases go away.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P..S. If you are ready to deep-dive into your supply chain why not take a “test drive” of our Utilizer™ Dashboard and we will show you how we do it.
P.P.S. Don’t forget to check out my new blog article “What’s Ahead for Supply Chain Management? This blog will show your the emerging best practices that will be coming in the near future.
Your Low-Hanging Fruit Has Been Picked! NOW WHAT?
I guess you have figured out by now that “there aren’t any more easy savings to be achieved”, on price, standardization, or even on your distribution fees. And I’m sure you have been asking yourself lately – now what do I do?
Another way to state this reality is that the “fish have stopped jumping into your boat”. This is because we have all have focused our supply chain efforts on price for the last 20 years and have wrung the towel dry in price savings. I’m sure you get it; there is NO more low-hanging fruit to be picked!
Now What? The answer to the dilemma we all face is for you to progress beyond just price savings and move up to the next generation of savings productivity which is called utilization management. To put it another way, you need to attack your wasteful and inefficient consumption, misuse, misapplication and value mismatches in your supply chain where your greatest savings can be achieved.
For instance, just last week I was talking to a MM — who gets it – who told me he just completed a utilization project where he measured the variation in his orthopedic surgeon’s implants and found a $50.00 per case difference between his surgeon’s procedures. Since his hospital performs 1,700 orthopedic cases a year, this could mean a potential savings of $85,000 for him. This is where you too need to expend your time (analyzing your data), vs. trying to shave off another one percent off your orthopedic implant cost, which probably isn’t going to happen.
In brief, your low-hanging fruit has been picked – get over it! There is a whole new world of utilization savings just waiting to be harvested, if and when, you take the time to measure, manage and control them. We call this the new discipline “value analytics*” which is the future of supply chain expense management. Don’t miss the boat on this one!
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* If you would like to see how we perform value analytics with our Utilizer™ Dashboard that will make you job easier, more fun and more profitable you can sign up for a test drive at www.strategicva.com/utilizer.htm.
Changing the Game!
President & Chief Value Strategist
Greetings!
Changing the Game!
What I’m hearing from supply chain professionals is that they are receiving more price increases from their GPOs than price savings offers. I see this as an historic milestone that is “changing the game” of supply chain management – forevermore!
If you think your GPO will continue to pull rabbits out of a hat (in this price is always going up economy) to give you never ending supply expense savings, then you are in for a rude awakening. Even Wal-Mart, Costco and BJ’s Wholesale Club are finding it next to impossible to hold back their vendor’s price increases. So why should healthcare be any different?
The good news is that there are literally billions of dollars of Savings Beyond Price™ in our own back yard in the form of utilization misalignments that have yet to be uncovered in the healthcare marketplace. This situation is analogous to the energy debate we American’s are having now on how much energy resources are available domestically. We are told by experts that these resources (oil, gas, wind, solar, etc.) are almost limitless if we start to explore for them now.
It’s the same with our own healthcare marketplace, we need to start today (not tomorrow or next week) to drill down into our own supply chains to find this hidden “black gold” in our own hospital, system or IDN, because the well is running dry on our price savings.
To sit on the sidelines and hope for the well to fill up again can be dangerous to your healthcare organization’s financial health.
Your Partner In Savings Beyond Price™,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P.S. More and more hospitals, systems and IDNs are jumping on the Utilizer™ Dashboard bandwagon to uncover their utilization misalignments before their price savings run out altogether. Wouldn’t you like to be one of them?
P.P.S. Don’t forget to check out my new blog article “Teach, Teach, Teach for Even More Supply Chain Savings” This blog is all about how you can do it the Costco way for million dollar paydays.
The 26 Cent Solution
Did you know that if you change hundreds of wasteful things you are doing right now in your supply chain that you could reduce your total supply expenditures by as much as .26 cents on every dollar you are spending? Compare this to 1, 2 or 3 cents you are now savings on price.
As a client of mine told me last week, “Today’s savings are NOT about Price; rising cost must be offset by other strategies”. I’m finding that more and more supply chain professionals are agreeing with this statement, but aren’t acting on it as aggressively as they could or should in this (price is always going up) economy. The few trail blazers that have embraced this concept have however saved millions in less than one year – beyond price.
I just read about a major teaching hospital that saved $14 million by completely changing their culture about how things are done at their hospital by making systematic change happen permanently. For instance, they saved $147,000 when they found that all of their towels were being de-linted, instead of just their operating room towels. $100,000 was cut from their telecommunications budget by auditing the use of all of their phones in their building. They saved $87,000 by reducing the frequency of the trash pickups when they found that their dumpsters weren’t full when they were picked up three times a week. And a whopping $400,000 was saved by turning off computers and lights at nights in all their facilities.
That’s just a few real life examples of what any and all healthcare organizations can save when you change the things that you are doing without affecting your patient care at all. It’s really painless, productive and easier than you would think to do so, if you decide to commit to “The 26 Cent Solution” at your healthcare organization.
Your Partner In Savings Beyond Price™,
Bob Yokl
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
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P.S. You wouldn’t believe the huge response we are getting on our Utilizer™ Dashboard. Almost everyone that has seen the Utilizer™ has been blown away with how easy it is to use and the savings that it can generate for them. Our Clients especially like the idea that we do all of the heavy lifting and you get all the savings. Isn’t it time you take a TEST DRIVE too?
P.P.S. Don’t forget to check out my new blog article “When Does Something Become a NO-Brainer?” This blog is all about nothing good happens unless you are willing to experiment – experiment – experiment.
It’s Only Money Right?
Click to enlarge view of comic
Comic – Supply Savings Mumbo Jumbo
This totally new for us and hope you like it. More to come!
