Savings Beyond Price -Weekly eNewsletter – January 7, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Your Secret Weapon for 2009

I had some time over the holidays to think about how the financial crisis we are now experiencing has affected almost all healthcare organizations’ census, investments and revenues, I came to this conclusion: Hospitals don’t need more patients, investment income or even revenues to be profitable.  All they need to do is to become more efficient to be profitable!

This is your hospital’s SECRET WEAPON for 2009 to ensure your healthcare organization’s viability.  I can’t think of any hospital that isn’t wasting their time, money and resources. But the good news is that you can cut 7% to 11% from your supply chain budget now if you waste less.

Here are six ways you can waste less in your supply chain in 2009 to survive in these hard economic times:

1.                      Lock Down Your GPO Contract Compliance

Most hospitals aren’t fully realizing their GPO contract cost benefits (i.e. food, service contracts, paper products, chemicals, physician preference items, etc.) because of their department heads’ resistance to change.  This is unacceptable behavior in this harsh economic climate. Now is the time to lock down the compliance on all of your GPO contracts to realize your full savings potential.

2.                      Attack Your Utilization Misalignments

I can’t think of a better time to attack the biggest waste in your supply chain: Wasteful and inefficient consumption, misuse and value mismatches in your value streams which are costing your hospital 8% to 14% in unnecessary cost. If not now, then when would there be a better time to do so?

3.                      Shrink Your Inventories to a Minimum

Your hospital needs more and better cash flow than ever before. What better way to do so then to take cash off your shelves in the form of unnecessary and unneeded inventory and put it in your hospital’s bank account?   

4.                      Re-energize Your Supply Value Analysis Program

I haven’t seen a supply value analysis program that couldn’t be renewed to be faster, better and to yield more savings beyond price. To do so you will need to refocus your savings on utilization of the products, services and technologies you are buying — not just on price.

5.                      Implement a Productivity Management System

If you don’t have productivity standards for all of your supply chain activities and a monitoring system to hold your staff accountable for their efficiency, then you are wasting a whole lot of time and money getting your work done. Remember: What is measured and monitored will improve!

6.                      Increase Your Use of Technology

There is no better way to cut waste and inefficiency in your supply chain than having technology lead the way.  Using faster, smarter and better technology than you have now gives you ultimate visibility into your supply chain, not just using it for your transactions. In 2009 you need search out better technologies that will make your job easier and more productive!

Yes, we all will have a rocky start in this New Year due to our weak economy, but it doesn’t need to be a catastrophe for those supply chain professionals who decide that there is too much waste and inefficiency in their supply chain that now needs to be removed for increased profitability for your healthcare organization.

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

800-220-4274

P.S. If you are looking for faster, smarter and better technology in this New Year to give you ultimate visibility in your supply chain, why not “test drive” our Utilizer™ Dashboard for even greater savings yield this year.

P.P.S. Don’t forget to check out my new blog “Why Do You Need a Team Mission Statement?” that will show you how to give your teams a common purpose and a firm foundation for their savings work.