SPANNING THREE DECADES OF
VALUE MANAGEMENT LEADERSHIP
February 14, 2002
MEASURING THE RIGHT
STUFF
Robert T. Yokl
-President
The HCP Group, Ltd.
A recent poll
conducted by HCP showed that material managers believe that they have
adequate benchmarks from their GPOs, consultants, vendors and
benchmarking services to measure their performance and to identify
performance GAPs in their supply chain. Our own empirical experience
would agree with this conclusion, but we have found that these
benchmarks are wrong 98% of the time. Material Managers(MMs) are often
not measuring the right things, or are measuring them inaccurately.
Therefore, MMs think everything is fine when its not!
Measuring The Right
Stuff
Based on HCP’s
extensive benchmarking studies, there are three Supply Chain Management
indices (figure 1) that MMs should be measuring to determine their
performance and identify performance GAPs in their supply chain. We have
found these SCM indices to be reliable, no matter what the size or
characteristics of your hospital or
Figure 1: Supply Chain Management
Index
|
SUPPLY CHAIN MANGEMENT INDICES (SCMI) |
25th Percentile |
50th Percentile |
75th
Percentile |
|
Supply
Expense/Net Operating Revenues |
12% |
14% |
18% |
|
Supply Expense +
Purchase Services/ Net Operating Revenues |
20% |
24% |
28% |
|
Other Operating
Expense/ Net Operating Revenues |
18% |
21% |
26% |
hospital system, as
a guide in determining your supply chain performance. If your hospital
or healthcare system doesn’t fall within the 50th percentile
range of the SCMI, it has been HCP’s experience that you are missing
savings opportunities for your organization.
Our Healthcare
Organization Is Different!
When I mention these
metrics to healthcare executives and MMs throughout the country they
inevitably will tell me that their healthcare organization is DIFFERENT
(geographic location, size, volume, characteristics, specialties, etc.)
and that they couldn’t possibly fit the SCMI profile. However, they
never can give me any evidence to refute the SCMI, only their
opinions. Don’t let this attitude (not invented here) be your fatal
error! Benchmarks are aids in determining your supply chain
performance that shouldn’t be ignored, but acted upon to move your
healthcare organization to the next level of performance.
Copyright
© 2002 The HCP
Group, Ltd.
Robert T. Yokl,
President, The HCP Group, Ltd., has over 35 years of experience as a
consultant and manager in the field of Supply/Value Chain Management and
is one of the country's leading healthcare experts in value analysis,
value engineering and materials management. He is the developer and
program leader of the award winning Certified Value Analysis Practitioner
Training Program™. Mr. Yokl is also the developer of the healthcare
industry's leading ValueNetCentral™ Value Analysis Software. Over the past
two decades he has trained thousands of healthcare managers in his
patented Strategic Value Analysis™ and Team-Based Project Management™
processes and has assisted scores of organizations in developing their own
value management programs. He has published six books, videos and audios
on supply/value chain management. His latest book being, “ Strategic Value
Analysis™: The #1 Smart Strategy for Taking Cost Out of a Healthcare
Organizations’ Supply/Value Chain”.
