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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- November 15, 2006
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Are You Saving In Your RED ZONE?
In football parlance the “RED ZONE” is when a team is grinding out yardage within 20 yards from the goal line. This is where gaining new yardage and ground becomes the most difficult for teams. Applying this same term “RED ZONE” to healthcare it means grinding out savings on your physician preference items one inch at a time.
I call it the RED ZONE because these physician preference items (14 categories by my count), representing 33% of your total supply spend, are the most feared, overwhelming, and formidable class of products for you to effectively manage and control.
But they don’t need to be that way!
Over my 27 years as a cost management consultant I have found that there is a money-saving system to manage and control any and all supply related categories of purchase from automobiles to xylocaine.
All you need is to find the system that fits your situation to do so.
With physician preference items the system that I have found to be the most successful is to: (i) data mine to identify and reduce variations, (ii) functionally analyze to determine your physician’s exact requirements and, (iii) search for alternatives with your physicians to meet their functions at the lowest cost.
This system might not sound easy to you, but I can assure you that it is bulletproof!
Your Partner in Supply Chain Savings,
Robert T. Yokl
President & Chief Value Strategist
P.S. If you want to know more about our physician preference money-saving system, you can learn more about it here.
Measure Almost Everything And You Won’t Be Mislead, Misinformed or Mistaken When Making Those Big (and little) Savings Decisions!
“Having A Culture of Data Is The Best Way To Avoid Big Mistakes”
Decisions on where to find supply, purchase service or process value analysis savings opportunities are easy when you measure almost everything you do. Conversely, they are the most difficult and fraught with errors when you don’t have a “culture of data”!
For example, a client of ours called the other day to say that he thought that there was big savings in his custom procedural packs because his pack purchases had increased $129,000 over the last year. But when we benchmarked his packs usage we found that his actual pack utilization (adjusted by volume and intensity) saving opportunity was only $4,000 compared to his prior year’s usage.
This example should demonstrate why you need to measure almost everything so you won’t be mislead, misinformed or mistaken when making those big (and little) savings decisions. Otherwise, you will expend a lot of unnecessary energy and resources pursuing savings opportunities that don’t exist.
What this means to you is that you must have a culture of never-ending benchmarking so you can identify the best savings opportunities with the highest ROIs, before you ever consider assigning a value analysis team to investigate any and all savings opportunities.
The one message that I’m hearing loud and clear from CEOs, COOs, and CFOs that I talk to almost every day is that they don’t have the time, money or resources to burn up on wasteful and inefficient exercises or savings opportunities that are “dry holes”.
Supply chain managers should hear this message from your bosses loud and clear too!
DID YOU KNOW…
That there are 894,000,000 blogs listed on Google that represent just about any business, finance, supply chain, social, law, travel, dogs, cats, cars, etc., interest that you have or a community you would like to start to communicate with. Here’s a website where you can find them (www.globeofblogs.com).
© 2006 - The Strategic Value Analysis in Healthcare, P.O. Box 939, 3887 Skippack, Pike, Skippack, PA 1-800-220-4271
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