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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 30, 2006
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Let’s Get Lean And Mean…
If you haven’t heard of LEAN management, then this introduction will get you thinking about learning to think in terms of LEAN. A philosophy that has as its core principle the elimination of waste and inefficiency in the processes we employ to deliver, store and organize our products.
Like value analysis, LEAN thinking is based upon the concept of value in your customers eyes not yours! Its tenets require you to specify value, map your value stream and flow, reduce pulls (or just-in-time inventories), and to search for perfection and replication throughout your organization of the best practices you have learned.
LEAN sounds easy doesn’t it? It also sounds easy to ride a bike until you try to ride it. It takes time, training and a disciplined approach to be a skilled LEAN practitioner.
My point here is that by adding the LEAN principles to your value analysis or Six Sigma methodologies you can more successfully attack the waste and inefficiency in your value chain by shortening the time between your customer’s orders and deliveries.
Your Partner in Supply Chain Savings,
Robert T. Yokl
President & Chief Value Strategist
P.S. Are You Ready...To Take Your Organization's Supply Chain to a Whole New Level With Supply Six Sigma?
Are new strategies, tactics, tools, and techniques required to dig deeper and broader for supply chain savings?
Supply
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Five Reasons Why Value Analysis Has Been Weak And Puny At Driving Out All Waste And Inefficiency In Healthcare Organizations’ Supply Chains
“The Face of Cost-Management Is Changing, But Are Healthcare Organizations Really Changing With It"
Millions of dollars are lost each year because healthcare organizations aren’t employing the right tools, training, methodologies and software to “wring the towel dry” on their supply chain expenses. The answer to this dilemma is for healthcare organizations to look to proven cost saving and quality models like Six Sigma to fill in the gaps where value analysis is weak and puny.
The face of cost-management is changing! However healthcare organizations are still employing old, tired and outmoded models of cutting their supply costs. Most hospitals call this value analysis and it is growing less and less effective. Those hospitals that embrace new savings 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.
What disturbs me is that healthcare organizations are fixated on a process we call value analysis. This has been a process that is weak and puny at driving out all waste and inefficiency in a healthcare organization’s supply chain. Most healthcare organizations aren’t even practicing value analysis, but are doing something else and calling it value analysis.
Here are five reasons why value analysis ALONE isn’t working any longer to “wring the towel dry” on healthcare organizations’ supply chain expenses:
1. Value analysis practitioners have focused exclusively on price and standardization issues and have ignored the appropriate utilization (or consumption) of their products, services and technologies where 67% of new supply chain savings are hidden from their view.
2. Traditional value analysis models never even touch the edges of conformance to requirements because of the conventional wisdom that “to save money you must standardize on the products, services and technologies you purchase”. What is needed is to embrace the new philosophy of customization of the products, services and technologies that are bought. This will save 12% to 22% beyond standardization strategies and tactics.
3. Broader and deeper supply chain reductions of 3%, 6% or even 9% requires a strategic approach, not a problem solving approach as is now offered by today’s conventional value analysis systems. To move to the next level of supply chain savings, hospital, systems and IDNs need to embrace a strategic approach if they are to “wring the towel dry” on their supply chain savings.
4. Value analysis programs don’t have a built-in mechanism for holding the gains that these programs achieve, as opposed to Six Sigma where standards and measurements are continuously monitored for compliance.
5. There is no focus on defects (or what a customer doesn’t want) in products, services and technologies with value analysis. Neither is there a scientific test to control the variation in the commodities hospitals are purchasing, even thought defects and variation can cause huge patient and staff dissatisfactions, or, worse yet, accidents and deaths.
The answer to this dilemma is for healthcare organizations to look to new proven cost saving and quality models like Six Sigma to fill in the gaps where value analysis is weak and puny. What is holding back hospitals, systems and IDNs from doing so is that they think that value analysis was cemented in a fixed set of rules that couldn’t be broken, altered or changed. That however is not the case. Since its creation in the 1940s by Larry Miles, the value analysis methodology has evolved almost every decade as value analysis practitioners discovered new strategies, tactics, tools, techniques or swiped them from other disciplines to modernize Larry’s value analysis model.
Healthcare organizations are always updating their medical technologies to stay current. It is now time for them to bring their supply chain savings models up to date!
DID YOU KNOW…
In the early and mid-1980s, with Chairman Bob Galvin at the helm, Motorola engineers decided that the traditional quality levels -- measuring defects in thousands of opportunities -- didn't provide enough exactness. Instead, they wanted to measure the defects per million opportunities. Motorola developed this new standard and created the methodology and needed cultural change associated with it. Six Sigma helped Motorola realize powerful bottom-line results in their organization. In fact, they documented more than $16 Billion in savings as a result of their Six Sigma efforts.
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