Is Experience Enough?
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
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.
New Supply Best Practices Webinar Announced!
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Grow, Lead and Succeed with One Big Idea!
By Robert T. Yokl
I had the pleasure last week of being a presenter at the Hospital Purchasing Service of Michigan’s semi-annual supply chain seminar. While there I talked about some new big ideas on how to grow, lead and succeed in supply chain management which was warmly received.
One of the big ideas that I presented to this group of MMs was that material managers must provide their management with a monthly report outlining their accomplishments (savings, operational improvements, market analysis, challenges and opportunities) for the month, quarter and year-to-date. I told the attendees that this monthly report is absolutely necessary because recent studies have shown that their bosses haven’t a clue of what they do, or, how their supply chain efforts has consistently contributed to their hospitals’ bottom line.
I see this communication strategy as being especially relevant today when I heard from these MMs that some of them can’t get their bosses attention for even 5 minutes a week. In fact, some of the attendees told me that they rarely, if ever, have regularly scheduled meetings with their bosses to discuss their challenges. Is this anyway to run a supply chain department? I don’t think so…
One prescription to solving this universal supply chain challenge is to start to communicate with your bosses through the vehicle of a monthly report. You would do this by beginning dialog with them about what you do, how you positively effect their P & Ls and that you do have information that would make their decisions easier. This would radically change the perception of your bosses that MMs are just buyers — not strategic thinkers.
Your Partner In Innovative Savings,
Bob Yokl
P.S. If you would like more powerful savings and quality ideas like this one I would recommend that you sign-up for our “no cost” weekly Savings Beyond Price™ e-Newsletter at www.Strategicva.com. You will also get a copy of my e-book “Your Target Blueprint for Supply Chain Management Success”, as a bonus.
