Savings Beyond Price™
Innovative Supply Savings and Quality Solutions That Work
by Strategic Value Analysis® in Healthcare
Did You Know...?
That Value Analysis Was Developed Back In the 1940's After World War II as a Way to Find Lower Cost but Higher Quality Alternative products and methods. This was Due to the Lack of Material Resources At The End of The War.
Savings Beyond Price -Weekly eNewsletter - May 6, 2010
Robert T. Yokl
President & Chief Value Strategist
What is your Savings Span?
Greetings,
I have talked about the concept of “Savings Span” (the span of control you have over your supply chain expenses) before, but not in these terms. So I thought I would give it another try, since I’m still hearing too many supply chain managers tell me that they aren’t responsible for most of the purchase service contracts their healthcare organizations are buying.
Why is this important? We have found that purchase service savings are equal to or greater than any and all supply savings on any given period that we measure for our clients. That’s why it is mission critical for you to enlarge your SPAN of CONTROL into every area of your supply chain operations because if you don’t – nobody else in your healthcare organization will take on this responsibility.
For example, clients of ours, whose span of control is LIMITLESS, have documented savings in their transcription services of $250,292, telecommunications of $752,922, utilities $192,546, etc., because they see it as their responsibility to manage and control all of their healthcare organization’s purchase service contracts. Not just a few of them!
What’s holding back these savings? We have found that supply chain managers who don’t attack these ripe and bountiful savings don’t think it’s their responsibility to do so. However, from my experience this is virgin territory that no one has claimed in your healthcare organization that you can move under your span of control.
No one ever stopped me! I extended my span of control with impunity at every hospital, system and IDN that I worked when I was a material manager. When I was a young MM I did it because I didn’t know any better. I thought everyone did it! When I was a mature MM, I did it because I knew that I could save millions for my healthcare organization. Best of all, I found that no one would stop me in my quest to expand my control over all my hospital’s purchase service contracts since no one was in charge of this area at my hospital, system or IDN operations. These organizations let the door open for me to jump in with both feet, which you also can do with impunity.
Don’t limit your span of control! I like the word LIMITLESS because it speaks to the boundless savings opportunities that are available to all supply chain managers if they are willing to jump in with both feet. Since most hospitals, systems and IDNs supply savings are shrinking, why not open new savings doors that will result in 12% to 18% overall in new savings for your healthcare organization.
On the reverse side of the coin! If you don’t jump in with both feet, that would be regrettable as far as I’m concerned. As I see it, a supply chain manager’s job is to be just like a vacuum cleaner. If there is savings to be achieved anywhere in your healthcare organization related to supplies, contracts or equipment, you should suck it up or it will never get cleaned up. These savings opportunities will just lay there untouched for years and years, when they could have been hitting your bottom line. Don’t let this happen to you…
Wouldn’t you agree?
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. If you want to read more about how to expand your span of control at your healthcare organization why not read my HPN article “ The Last Frontier of Supply Chain Management” which will give you an in-depth look at how to do it.
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