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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 E-Zine- August 10, 2006
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Are new strategies, tactics, tools, and techniques required to dig deeper and broader for supply chain savings?
As you probably have observed if you are a regular reader of our Savings Beyond Price™ E-Newsletter, we are always researching and testing new ways to “wring the towel dry” in healthcare organizations’ supply chains. We believe we have moved to the edge again with our new proprietary SUPPLY SIX SIGMA SYSTEM that we are introducing today.
Why is a new system needed?
While value analysis is still the best methodology for you to evaluate and select the products, services and technologies for your healthcare organization, we have found value analysis to be ineffective in measuring variations and defects within these same categories. Therefore, since “the times are a changing” the value analysis methodology must change too to keep pace with our rapidly changing healthcare environment.
As an illustration, the current tools of value analysis will not enable you to determine if your surgeons are utilizing the appropriate pacemakers that are medically indicated. However, sigma, or standard deviation will tell you how much variability there is within a group of pacemakers. With your surgeon’s agreement you can set a standard that can be easily measured for compliance. In our opinion, without these advanced tools and techniques of Six Sigma being amalgamated with value analysis methods and practices it will be almost impossible for hospitals, systems and IDNs to manage the utilization of their medical technologies as they become more complex now and in years to come.
Why is this important to you?
The face of supply cost-management needs to always be changing to keep up with the changes in new medical technologies! Old methods of cutting costs are growing less effective. Those who embrace new saving models, employ the latest technologies, and utilize revolutionary techniques will succeed in discovering and exploiting new cost-saving opportunities that are now hidden from their view.
Save More With “The Supply Six Sigma Way!”
To give you more information on The Supply Six Sigma Way of managing and controlling all of your supply related expenses and processes, (which has built-in mechanisms for you to hold on to the gains you have achieved), check out my article this week.
Your Partner in Supply Chain Savings,
Robert T. Yokl
President & Chief Value Strategist
P.S. We Are Making the Planning Easy for You (and no cost too) If you haven't already signed up for our No Cost Tele-Seminar for this month (August), we will help you plan your next generation of supply savings strategies, tools and methods. Learn more here!
Click here to learn more about Supply Six Sigma
SUPPLY SIX SIGMA: The Missing Link!
“How To Squeeze Out More Savings And Profitability Almost Overnight With The New Tenets Of Supply Six Sigma”
How would you like to: (i) quickly generate demonstrable savings linked to ambitious goals, (ii) reduce defects, flaws, and deficiencies in your supply chain to near zero by a targeted date, (iii) have built-in mechanisms for holding your gains, (iv), set realistic performance goals, (v) improve your customer service, (vi) speed up your rate of improvements and (vii) improve your ability to think strategically?
That’s what “The Supply Six Sigma Way” can do for you!
I call it the “missing link” that has been absent in the value analysis methodology that will supercharge your supply chain performance. This is because Supply Six Sigma focuses on the study of function which is the basis or reason for the success of value analysis. “The Supply Six Sigma Way” is also centered on the variation and defects in the products, services, and technologies that you are purchasing and the processes that you are employing to delver them.
Managing Functions, Variations, And Defects
In Our Customer’s Requirements
The philosophy, principles and practices of Supply Six Sigma are all centered on managing the functions, variations and defects in your customer’s requirements. A defect is anything that doesn’t meet your customer’s requirements, while a variation is a deviation (as in the mathematical term standard deviation) from your customer’s requirements.
Case in point: One of our clients has performed a functional analysis on their orthopedic implants and has reduced their surgeon’s requirements down to what is absolutely positively medically indicated. They also were able to persuade their surgeons to agree on sets of implants that would be their standard. This decision enables our client to measure their surgeons’ variation to requirements or sigma levels (employing the tool of standard deviation). My client was also able to eliminate defects in their surgeon’s orthopedic implant process, such as, cases starting late, instruments not being available on time and staff shortages.
As this example clearly points out by utilizing “The Supply Six Sigma Way” our client left no savings or quality improvements untouched in their orthopedic implant products or processes. On the other hand, if our client only performed a functional analysis, as you can see, they would have left the job only half done.
Value Analysis Methodology Has Always Been Evolving
You might think that value analysis was cemented in a fixed set of rules that couldn’t be broken, altered or changed, but that’s not the case. Since its creation in the 1940s by Larry Miles the value analysis methodology has evolved almost every decade when value analysis practitioners discovered new strategies, tactics, tools, techniques or swiped them from other disciplines to modernize Larry’s value analysis model.
With this evolution in mind, we too have restructured and rationalized the successful value analysis system to include the proven Six Sigma principles with our new Supply Six Sigma System. In doing so, we now can offer to healthcare organizations a supply chain optimization system that won’t leave the job of supply chain management only half done.
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