Most supply chain organizations have at least three trillion bytes of data in storage but they only have the analytical capability to analyze two trillion bytes due to their data gaps (e.g. missing data, inaccurate data, unclassified data, vague descriptors or inadequate classification of data). In fact, most supply chain organizations have only the capability to execute Value Analytics™ to their completion on only one trillion bytes of data.
What does this technical lingo mean to you? Most supply chain organizations are only capable of analyzing one-third of their data, at best, to uncover hidden utilization savings opportunities. Just imagine what you could do if you had ALL your data analytics steps in place to uncover these new and better savings.
Just the other day a supply chain manager told us that his spend manager didn’t give him the visibility into his supply spend vs. our Utilizer Dashboard, since our Value Analytics™ went deeper and broader into his supply chain than his spend manager did. The bottom line was $7.7 million in utilization savings that were hidden from his view since he was looking at only one-third of his data
So if you want to move to the next level of savings performance beyond price I would encourage you to implement these seven steps:
- CLEANS your data so that it is usable and defect free.
- HARNESS the latest technology to make your job easier. If you tried to perform these analytic studies without software your job would never be done.
- DEVELOP or use a third parties’ Value Analytics™ methodology to hone in on your utilization misalignments.
- ANALYZE the data that your analytics system spews out.
- ESTABLISH and/or utilize your current value analysis teams to ferret out the savings you have identified.
- FIND an executive sponsor or sponsors to champion your initiative and to remove the roadblocks you will encounter along the way.
- INCENTIVIZE your team members to keep them at peak performance.
I know that you are thinking to yourself that “this seven step roadmap is a tall order when you consider I’m already swamped with work.” However, these seven steps only look overwhelming to you if you try to do everything I’m suggesting — at once.
It took Strategic Value Analysis in Healthcare almost 10 years to be able to have them fire on all eight cylinders. What we would recommend you do to get started with your own Value Analytics™ Program is test the waters, since Value Analytics™ in my opinion is the future of supply chain expense management.