Savings Beyond Price™
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
Is There a Hole in Your VA Program?
Linking Up to Your Suppliers IDEA Supply Chain Will Grow Your Savings Stream
Savings Beyond Price -Weekly eNewsletter- August 14, 2007
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Is There A Hole In Your VA Program?
There are value analysis team(s) out there right now that have ALL of their savings opportunities identified for the next two to three years. Is that something you too could say about your VA program? Or, do you have a hole in your VA program considering just how few targeted savings opportunities you are uncovering for your VA team(s).
In today’s fast paced healthcare environment just having value analysis team meetings isn’t enough; you need to produce tangible savings results every month, every quarter and every year! You want to have more reliably competitive intelligence to open more doors and implement more supply savings.
Relying on internal information to fill this hole is no longer enough! Having competitive intelligence about where savings reside in your supply chain is the essential “missing link” you require to have a complete VA arsenal guaranteed that to make savings happen.
Don’t guess any longer where your savings reside, become an expert in researching them and you will quickly fill the hole that is holding back great strides in your VA program.
Your Partner In Innovative Savings Solutions,
Robert T. Yokl
President & Chief Value Strategist
P.S. Don’t forget that our “no cost – no obligation” Supply Savings Scorecard could be your first step in filling this hole in your VA program.
Linking Up To Your Suppliers IDEA Supply Chain Will Grow Your Savings Stream
“Your Suppliers Can Provide You With Much More Than Just Product, Services And Technologies”
One of the criteria I use to measure the real value of my suppliers beyond quality, service and price, when I was a MM, was to calculate how much innovation they were bringing to my organization. If a supplier wasn’t generating new ideas on a regular basis to reduce my healthcare organization’s cost or improve quality I would replaced them with one that did!
For instance, I once dealt with a small local printer whose owner was a WIZ at redesigning and reinventing our flat, continuous and snap-out forms. This saved my healthcare organization literally thousands of people hours annually by streamlining our work processes – not just our forms. When I moved to another hospital I searched out another small local printer whose owner had the same attributes as my other WIZ for reinventing our forms and processes.
You probably guessed this already. These were my prime vendors for forms at these two hospitals and even the big name printing companies couldn’t match the BIG savings IDEAS I received from these two companies. That’s what I mean by saying “linking up to your suppliers IDEA supply chain will grow your savings stream” This will give you more than just quality service and price, however, to be successful you will need to mandate, motivate and measure your supplier’s value to your healthcare organization.
What Is Mandated Will Happen!
You just can’t hope that your suppliers will bring new savings and quality ideas to you – you will need to mandate it. Mandate it in your sales interviews with them! Mandate it in the contracts you sign with them. Mandate it in the quarterly reviews you have with them.
Here’s how it works! A GPO Vice President told me a few months ago, that after he read one of my articles last year on how suppliers should be providing more than just quality, service and price, that he decided to mandate, in writing, in all of his new and renewal GPO contracts that every one of his suppliers would need to offer specific and concrete value-added programs to bring new savings and quality ideas to his GPO members.
The VP tells me that since he initiated this new policy at his GPO the new mandate is working just fine and is generating hundreds of thousands in new savings – beyond price -- for his members.
This is what you need to do to -- to jump start your supplier’s innovation!
You Gotta Motivate Them!
Unfortunately, if you think just mandating your suppliers to save more money for you and improve your quality is going to motivate your suppliers to do so -- you are mistaken. A recently published study by the Harvard Business Review shows that sales people are motivated by #1 ACHIEVEMENT (or new sales), #2 by RECOGNITION and, #3 their WORK ITSELF.
So if you are going to motivate your suppliers (who are all sales people) to generate new savings and quality ideas for you, you will need to explain to them how they are going to increase their sales by giving you new ideas. You will need to give them recognition and awards when they do and praise them for their hard work itself.
You Gotta Measure Their Results!
I’m reminded of a story a friend of mine, who is a MM at a major teaching hospital, told me about his hospital’s management giving away $300,000 dollars in incentives (big prizes, exotic trips and dream vacations) to their employees for their winning savings ideas. The only problem with this incentive program was that only a few of these savings ideas were ever implemented. So most of these winning savings ideas never really saved any money!
Don’t you make this same mistake with your suppliers! You need to carefully measure the implemented savings and quality gains your suppliers say they generated for your healthcare organization. This doesn’t mean that you need to be “Nit Picky” about the results, but you sure do need to make sure that savings and quality improvements happened before giving any new business, recognition or awards to your suppliers.
We realize that your suppliers have more ideas about saving money and improving quality than your healthcare organizations has because of their vast and robust IDEA SUPPLY CHAIN that they already have in place. If you link your supply chain together with theirs you can profit from their wisdom, knowledge, and insight. This only needs to be mandated, motivated and measured to bring about even greater savings and quality improvements for your healthcare organization.
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