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NOVEMBER 6, 2002

PART II: How to Build Blockbuster Value Teams

“If You Understand Function, Spec Function, Solicit Function and Buy Function, You Will Reap The Benefits Of Hundreds of Thousands of Dollars In New Savings Annually – Beyond Price.”

Robert T. Yokl - President - The HCP Group, Ltd.

All healthcare organizations are being challenged to lower their cost due to reduced reimbursement and higher expenses but are running out of ideas on how to do it.  The ripe fruit has been picked in the vineyard; now the hard work needs to be done to move to the next level of savings performance.  One answer to this dilemma is for healthcare organizations to deploy value teams trained in functional analysis (the #2 ingredient in building blockbuster value teams) to uncover and then drive out all of the waste and inefficiency in their organizations’ supply/value chain.

Understand Functions First Before, Price, Aesthetics, or Trials

When Larry Miles, the father of value analysis, told us that, “ most people evaluate a product, service or technology, they only look at the product, service or technology’s aesthetics and not its reason for being …FUNCTION”, he was talking about one of the critical elements to success in value analysis.  From my own experience this conundrum is even more convoluted in healthcare, because when most people in healthcare evaluate a product, service or technology they first look at price, then aesthetics, then arrange for a trial before they even understand the function or purpose of the product, service or technology under evaluation.  This sequence of actions is guaranteed to leave dollars on the table and create value mismatches (over-specification or under-specification), which just clogs up your supply/value chain. 

Value Analysis: The Study of Function

Value analysis isn’t the study of price, aesthetics or trials of products, services and new technologies, but is “The Study of Function and The Search For Lower Cost Alternatives to Meet Those Functions precisely”. As Larry Miles said, “ The more one understands the functions of a product, service or technology, the more opportunities arise for dramatically reducing the cost of the product, service or technology, by substituting and/or in some cases eliminating an element of a product, service or technology with an equal or better product or services”. This is what value analysis is all about….FUNCTION; not price, not aesthetics or trials. 

Starting With A Blank Piece of Paper

The best way to persuade your value teams to avoid price, aesthetics or trials first is to have them start with a blank piece of paper to define the functional requirements (primary, secondary and aesthetics) that the product, service or technology under evaluation requires, then look for lower cost alternatives to meet those functions reliably.  This can only be accomplished through VA/VE Customer Mapping™ and by “Shadow-ing” your customers to understand their unique needs, wants and desires, then negotiating with them to weed out any functions that aren’t necessary or required for peek performance.

Reap The Benefits of a Functional Approach to Value Analysis

If your value teams understand your customers’ functions, specify your customers’ functions, solicit functions and buy functions, you will reap the benefits of hundreds of thousands of dollars in new savings annually – “beyond price”. This is how to build blockbuster value teams that will move your organization to the next level of savings performance.  Next week’s VMS&T will focus on the #3 ingredient “data analytics” on how to build blockbuster value teams to continue our journey to value management maturity for your healthcare organization. 

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”.