Strategic
Value Analysis®
in Healthcare
Dramatically Improve Quality While Reducing Supply Costs
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- April 5, 2007
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Have You Every Heard Of Charles Housley, MBA?
I recently completed a survey by Hospital Purchasing News Magazine where I was asked who was the most influential person in supply chain management in the last 30 years? Without skipping a beat, I wrote in the space provided “Charles E. Housley”, who I consider (as many others do) the father of healthcare materiel management.
Chuck wrote 15 books on supply chain management (all best sellers) and was the Editor of “Hospital Materiel Management Quarterly”. He also consulted with 2,488 hospitals over a 20 year period. Without question Chuck Housley was the leading authoritative source for healthcare materiel management strategies, tactics and techniques in healthcare in the 70s and 80s.
Furthermore, Chuck reinvented, refined and retooled the concept of “Product Standardization and Evaluation Committees” which has now morphed into value analysis teams. He also was the creator of par level floor inventories, exchange carts, case carts, masterplanning, purchase price index, product formularies and much, much more.
The whole point of this communication is that I’m very excited to announce that we have found Chuck Housley (he is alive and well and is currently the CEO of Appalachian Regional Medical Center, Hazard, Kentucky). More importantly, we have acquired the rights from him to re-publish, as a 231 page e-book and print version of Chuck’s ageless classic “Product Standardization And Evaluation”. I consider this book to be the material management bible or last word on product standardization and evaluation in healthcare.
If you would like to learn more about this book then go here www.productstandardization.comYour Partner in Supply Chain Savings,
Robert T. Yokl
President & Chief Value Strategist
P.S. I hope that those of you who still have an ORIGINAL Copy of this ageless classic would take the time to pass it along to your supply chain team, this is truly a hidden treasure that I believe still applies to everything we do today!
P.S.S. For those of you who may have had the opportunity to work with Mr. Chuck Housley, if you would like to take a few seconds to share your experience with us it would be greatly appreciated. We will be passing along all of your comments and experiences to Mr. Housley! Share your comments here!
WWW.PRODUCTSTANDARDIZATION.COM
6 Value Analysis Errors You Should And Can Avoid!
“There Is A Right Way And A Wrong Way To Do Things; The Right Way Will Save You Time And Money”
We would all like to have our supply value analysis programs humming and not skipping a beat, but this can only happen when you have removed all of the mistakes, missteps and oversights that are holding you back from peak performance. Here are six of the most common value analysis errors you should and can avoid:
1. No Planning
Too many supply value analysis programs begin with no plan or blueprint (who, what, when, where and how) to save money. These organizations improvise and make do but never reach their full potential. Only by carefully planning your program at the beginning, middle and end of every year can you raise the level of performance of your supply value analysis program.
2. No Structure
Most supply value analysis programs don’t have a formal organizational structure or team architecture. Teams meet, they talk, they act, but don’t really gain traction because they are too informal, casual and relaxed. Only formal, highly structured and extremely organized supply value analysis programs meet their full potential.
3. No Leadership
Yes, you might have people in-charge of your supply value analysis program and value teams, but are they really effective or just there for soda, coffee and donuts. Real leaders take charge, stay in-charge and make stuff happen. If you want real leadership you need to train your leaders to be more effective, or replace them if they don’t make the grade.
4. No Facilitator
Value teams don’t become proficient, skilled and experts in value analysis by themselves. They need to be trained, coached and mentored by a specialist called a facilitator. If you don’t have one on your value team(s) you need to get one if you want to move to the next level of savings performance.
5. No Follow Up
My definition of follow up is the never ending review and inspection (e.g. projects, schedules, savings, outcomes, etc.) of what is supposed to be happening by your team leaders, team members and facilitator. It all comes down to, “If you expect something to happen then you must inspect it -- to make sure it really happens”.
6. No Discipline
Regulations, rules, order and control are at the core of a disciplined supply value analysis program. Without discipline there is a slow breakdown in authority leading to disinterest, disengagement, and detachment by your value team(s) leading finally…to chaos. Don’t let the lack of discipline destroy your supply value analysis program.
There are a lot more “do’s and don’ts” I could share with you on having a winning supply value analysis program, but these six are the most important errors you should and can avoid -- at all cost.
Where is the utilization savings in healthcare organizations today?
From our detailed client engagements, 77% of all remaining supply savings opportunities reside in Supply Utilization (Waste, Inefficient Use, Over-specification, Under specification, etc.). These savings opportunities account for more than 5% to 8% of your entire supply expense budget as compared with only .5% to 1% savings in price related areas.
Hospitals and health systems have been increasingly reliant on their Peer Benchmarking Reporting which does shed some light on which department of your hospital may have savings opportunities but that is about as far as it goes! Your C-Suite is looking at these reports and turning around and asking you to delve further into these supply categories ASAP! But, where do you go when a benchmark tells you you can save $868,000 in your Surgical Services Suite? Or $578,998 in savings on your Med/Surg Supplies?
It's like trying to find a needle in a Haystack!
It doesn't have to be that way any longer! SVAH has a fast an easy way to find out where all of your Utilization Savings opportunities reside without all the guess work or missed steps. AND, these savings will literally come to you on a regular basis!
To learn more about the UtilizerTM - The Next Generation of Supply Performance Benchmarking Tool or to take a TEST DRIVE of the system call today 1-800-220-4274 or fill out the test drive form below.
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