Here’s
a profound question for you; why should you audit
your supply chain spend?
ANSWER:
If you are missing big supply savings or operational
issues,
how would you know it?
Every
hospital spends thousands of dollars every year auditing
just about every aspect of their financial system. But
rarely, if ever, do hospitals invest even one dollar
annually in auditing the millions of dollars in
supply spend which represent 30% to 40% of total
operating budget for their hospital. This is a
practice in healthcare that we all should be
questioning, but are not. We are willing to accept that
“good is good enough”.
It
doesn’t need to be that way!
If you listened to our last months Supply
Chain Best Practices Teleseminar you heard executives
from the University of Connecticut Health center tell
you that they wanted to be “the best they could
be”, because “good enough wasn’t
good enough any longer”. That’s why over the
last few years Uconn has proactively audited (utilizing
outside supply chain experts) every aspect of their
supply chain management. The result is they have
uncovered and are implementing $4 million in
new supply chain savings.
There is power in
these words: Recently a CFO told me that even though
his hospital is making money now, he is going to audit
his supply spend because a downturn in his business can
come at any time and he wants to be ready for it.
The
winning strategy is very simple really;
1) If you have not had a complete (utilization,
GPO neutral price check, inventory, pharmacy, etc.)
audit of your supply chain in the past year or longer—Get
It Audited, It Will Bare Big Savings! 2) Find
out how the auditing firm performs their audit and make
it your own, learn from the best and then do what they
do –- don't underestimate the importance of baseline
data and technology transfer! 3) Repeat this
process at the same time every year. Add this to your
business model and I guarantee
you will reduce your costs by 5% to 7% within a one to
two year period!
Your Partner in Supply Chain Savings,
Five Advantages Of
Training Your Value Teams
“Training Is
The Magic Bullet All Healthcare Organizations Are
Looking For To Invigorate Their Supply Value Analysis
Program, But Fail To Realize It.”
When linking together these three words
“value analysis training” is an oxymoron
(or contradiction) in healthcare today, because value
teams aren’t receiving a lick of training in the
art and science of value analysis.
Value analysis isn’t just a name given to
your supply saving program, it’s a defined six step
saving systems developed by General Electric 60 years
ago. Just like Six Sigma, value analysis has a
philosophy, principles and practices that you must
master (through training) if you want to call yourself a
value analysis practitioner. Here are five
specific advantages on why you should have extensive
value analysis training for your value teams:
1. Change
The
primary reason for training is to produce change (or
positive behaviors) in your value team members so that
they have a toolbox of strategies, techniques and
tactics to confidently search out savings
opportunities for your hospital. There would be no
complaining and whining that no one at your hospital
wants to save money -- so why try!
2. Competency
The
ability of your value team members to perform their
value analysis studies proficiently will relieve your
value team’s leaders of constantly and
incessantly prodding your team members to do their
work.
3. Motivation
When
your value team members become experts in the value
methodology they will be motivated to show off their
skills at your value team meetings. They won’t need to
be hounded to do so. They will be ready,
willing, and able to participant in all of
your value teams’ initiatives.
4. Productivity
Because
your value team members have been trained on how to
conduct their value studies faster, better
and easier they will be more creative and
productive than ever before.
5. Savings
When
your value team members know how to perform a functional
analysis adeptly and skillfully they can save 3, 4,
or even 5-fold more than they have been saving.
Training is the magic bullet for all healthcare
organizations who are looking to invigorate their supply
value analysis program, but fail to realize it at their
peril. Don’t you make this
same mistake!
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