ADVANCED TECHNOLOGIES TO PUT YOU IN

CONTROL OF YOUR COST AND QUALITY

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VALUE MANAGEMENT STRATEGIES & TACTICS

           For Week of March 14, 2002

IF YOU TRULY HEAR YOUR CUSTOMERS

YOU WIN!

Robert T. Yokl

 President

The HCP Group, Ltd.

Most healthcare organization don’t know it but they are being strangled by wasteful products, services, technologies and processes, and are essentially throwing away profits that can go directly to their bottom line.  This the premise of James P. Womack and Daniel T. Jones’ book Lean Thinking: Banish Waste and Create Wealth in your Corporation. Their studies have documented that healthcare providers, airlines and other industries can profit by trimming waste in most of their daily functions.  The authors argue that, with few exceptions, managers are preoccupied by their own problems, as well as by their outdated notions of what customers want.  As a result, too many organizations produce little of real value and enormous amounts of waste.  We have observed hospitals buying filtered intravenous administration sets at a 25% up charge, when there is no medical evidence to prove that filtered sets are medical indicated for all patients. Or throwing out reusable pulse oximeter thought to be disposables to cite two examples of waste in healthcare organizations.

My own empirical experiences shows that 80% of the products, services, technologies and processes that we are utilizing can be made much leaner and 10% of what we are doing ISN’T NEEDED AT ALL.  Womack and Joes say, it all starts with LEAN THINKING. “ Lean thinking helps you get your priorities straight.”  Why would we make, buy or sell any product, service or technology that hasn’t been validated by our customers (internal and external) to be absolutely, positively required or desirable?  Jones tells the story of Pratt & Whiney spending millions developing a new 800,000 horsepower airplane engine because it would get 5% better fuel consumption, when gasoline at the time of development was so cheap that fuel efficiency was way down on a customer’s list of concerns.  Why then don’t we listen to customers, needs, wants and desires?  Because we listen, but we don’t hear what our customers are saying!

To truly understand our customers we must work side by side with them or at least visit with them routinely to know exactly what they are doing, saying and thinking!  At CCUNA Mutual Insurance Group, for instance, their executives spend a month every two years actually working at a client’s company in order to understand how their customers think. Some might call this TUNING INTO YOUR CUSTOMERS.  By doing so you can build a competitive advantage, since most organizations don’t hear or translate properly what their customers are saying. An excellent example of misreading of our customers was when Coca Cola decided to ask its customers if they liked the taste of an new product called NEW COKE that they were thinking of launching.  When their customers said they liked the taste of NEW COKE over Classic Coke they launched the NEW COKE product only to find out that their customers went BALLISTIC! Why, because they didn’t really hear or translate what their customers were really saying, which was,  “we like the taste of NEW COKE, but we still want our Classic Coke too.  This same mistake (not hearing what our customers are saying) is being made every day in every healthcare organization in American.  When will we learn we can become lean and mean by reinventing our products, services, technologies and processes ONLY TO OUR CUSTOMER’S ORDER?

“ HCP’s Advanced Technologies Change The Culture Of Healthcare Organizations, So that They Can Drive Out All Waste And Inefficiency in Their Supply/Value Chain

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