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Innovative Supply Savings and Quality Solutions That Work
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.
Inside This Issue
Less is More...Cut Cost, Cut Complexity, Cut Redundancy, Waste and Inefficiencies!
Savings Beyond Price -Weekly eNewsletter- August 7, 2007
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Good To Great!
I’ve just reviewed again Jim Collins’ “Good To Great” book and found some pearls of wisdom from Collins on how to move your supply value analysis program from good to great that I would like to share with you, along with my comments.
“Greatness is not primarily a function of circumstance: it is a function first and foremost of conscious choice and discipline.” If you want to have a great supply value analysis program you need to make a conscious choice to be the best you can be and have the discipline to stay the course.
Moving from good to great with your supply value analysis program all comes down to disciplined people, disciplined thought, disciplined action and building greatness to last. Are you ready to take this challenge?
Robert T. Yokl
President & Chief Value Strategist
P.S. If your haven’t read “Good to Great” by Jim Collins (and his companion book “Built to Last”) yet, I would suggest you buy both of these classic leadership books so you can understand the principles that great organizations employ to move from good to great.
LESS IS MORE… Cut Cost, Cut Complexity, Cut Redundancy, Waste And Inefficiencies!
“Do MORE With Less For Your Customers With Supply Six Sigma™”
I just read that the new Medicare Severity-Adjusted DRG’s are slated
to take effect sometime in 2008. The new payment plan creates 745 new severity-adjusted DRGs to replace the current 538 DRGs. The new severity-adjusted DRGs will be phased in over two years, with payments based on the severity of each patient’s condition (not just by their diagnosis), which will exclude preventable conditions like hospital acquired infections. The good news is that the plan will provide additional incentives for hospitals to engage in quality improvement.
The bad news is that it looks to me like hospitals will need to DO MORE WITH LESS by cutting cost, cutting complexity and cutting redundancies, waste and inefficiencies in their value steams since they aren’t going to get paid any longer for uneconomical practices. With this said, isn’t it time we rethink, reevaluate and reorganize what we are doing in our supply chain management to meet this new challenge head on?
Quality, Speed and Low Cost Together
One of the new Supply Six Sigma™ concepts that Supply chain Professionals need to latch onto to face this new challenge is to learn to DO MORE WITH LESS. We can do this by having quality, speed and low cost – together -- built into all of your processes including your supply value analysis program.
Why? When our customers order a product, service or technology, they want it delivered as quickly as possible and on time (speed), with no errors (high quality), and at the lowest possible cost (low cost).
Supply chain processes that make a lot of errors (what your customers don’t want or need) can not keep up its speed. A process that works slowly (beginning to end) is prone to errors (low quality). You have to do things that create process speed (meaning “eliminate delays) if you want to achieve the highest levels of quality. Low quality and slow speed are what make processes, services and products – expensive.
Critical To Quality Requirements
To root out all waste and inefficiency in your supply chain you will need to focus your efforts on identifying the “critical to quality requirements” in your customer’s eyes that are of value to them. You will then need to eliminate all non-value added tasks and activities (where feasible) to streamline your supply chain.
Since numerous studies have shown that 80% of what we are doing is non-value added work, this stated goal to eliminate these quality, speed and low cost inhibitors is not an unrealistic expectation when you think about it. This goal can easily be accomplished by starting with a “blank” piece of paper to redesign all of your processes to make them consistent, reliable and defect free.
To conclude, the era of doing MORE with less for your customers is on the horizon with the implementation of the Medicare Severity-Adjusted DRGs payment plan in 2008. By understanding and then applying the new Supply Six Sigma™ principle of LESS IS MORE, you can have a head start on this disruptive influence on the healthcare marketplace before its affects hit your hospital sometime next year.
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