March 29

Must Have Multiple Savings Systems If You Want To Reach Healthcare Supply Chain Expense Peak Performance

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We all know that having great people is a necessary element for having great supply chain expense savings results, but did you know that if you don’t have great systems too, your people won’t be able to obtain supply chain expense savings peak performance? That is savings that is double-digit year after year!

Systems Are Not People on a Treadmill Told to Run Faster

A system is defined as a set of connecting things or parts forming a complex whole, not a bunch of people on a treadmill told to run faster. That’s the image that comes to our minds when we talk to some healthcare organizations about how they are saving money. There is a lot of activity, but very little savings.

Systems Need Not Be Complex, but They Do Need to Be Repeatable

We take exception to the idea that systems need not be complex, but they do need to be repeatable. Why? This way they can be managed, measured, monitored, and controlled. More importantly, your people can be trained in their use of them since they have a defined repeatable process. For instance, our 6-step Value Analysis Funneling process has been taught to hundreds of hospital, system, and IDN department heads and managers with the result that they have more savings every year than their peers who are “winging it.”

Systems Need to Be Computerized to Institutionalize Them

Another secret of peak-performing savers is that they computerize all of their savings systems. Why? Because this way you institutionalize your processes and embed them into your culture, thereby making them faster, better, and more reliable. As an example, we computerized the 6-step Value Analysis Funneling process about 15 years ago with the outcome that we increased our clients’ value analysis productivity by as much as 3-fold.  

Systems Need to Be Integrated to Be the Most Efficient and Effective

If feasible, your savings systems should be integrated to be the most efficient and effective. If all of the parts (e.g., price, value analysis, utilization management, etc.) in your savings systems are embedded in disparate software products, you aren’t integrated for peak performance savings results. The upshot of not integrating your savings systems is data duplications, constant rework, and a lot of extra time and effort to obtain the same savings results.

As your healthcare organization demands more supply chain expense savings from your supply chain department you will need multiple or integrated savings systems to continue your double-digit savings results if you want to reach your supply chain expense peak performance. The alternative is to beg your vendors for price concessions that never will be double-digit again. 


Tags

healthcare, healthcare organizations, hospital, IDN, savings, supply chain, supply chain expense, utilization management, value analysis


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