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Building A Savings Factory - Incremental Savings Are Fine, But If You Are Looking For Breakthrough Triple Digit Savings Results, It’s All About Having A Cost Management System
Excerpt: No corporation in the 21st century can continue to do the same things and get the same so - so results related to their cost management efforts without questioning their commitment to building a “Savings Factory”. To my thinking, only through massive savings innovations will corporations survive and thrive in the new millennium. Drip, Drip, Drip isn’t going to make a dent in your bottom line!
Strategic Value Analysis: Savings Beyond Price! The #1 Smart Strategy for Taking Out Cost in a Healthcare Organization’s Supply Chain
Excerpt: Most healthcare organizations’ non-salary expense initiatives are focused on lowering the price of the products, services and technologies that they are purchasing, as if this is the only weapon they have in their arsenal to combat the negative effects of the balanced budget amendment of 1997. In reality, this is the least potent strategy that can be employed to dramatically lower their non-salary expenses. Why?
Over the next three to five years the savings from group purchasing, standardization and prime vendor contracts will be almost invisible. In fact, supply costs are beginning to rise because the excess costs are now and will continue to be squeezed out of your healthcare suppliers’ supply chain. Vendors are screaming that they have no more price concessions to offer to their healthcare customers! “WE CALL THIS THE LAW OF DIMINISHING RETURNS”. Now, what can we do about it? Read On
Evolution - Taking Your Value Management Performance to the Next Level of Maturity!
Excerpt: The dynamics of value management (value analysis and value engineering) in the healthcare industry has radically changed over the last ten years. We have watched as healthcare organizations moved from Sole Practitioner to Value Teams (Value Management Continuum) to determine the relative worth of the products, services and technology purchases. Yet, with few exceptions, hospitals and healthcare systems have not reached the superior performance stage of maturity in this discipline. As value management (VM) matures in the healthcare industry, the basics need to evolve, thus taking your value management performance to the next level of maturity. This leap forward is crucial if your healthcare organizations are going to thrive and survive in the 21st century. Read on...
Beyond Benchmarking - Forward to Activity Based Measurement
Excerpt: Labor management or the measurement and control of departmental workloads and staffing ratios on a continuous basis is becoming a priority in healthcare organizations today. When healthcare organizations consider that their labor cost continue to rise, while at the same time reimbursement from third parties continues to fall. Healthcare organizations must dramatically improve and maximize their management of their labor resources if they are to survive and thrive in the 21st century. The question that most CEO’s, CFO’s and COO’s are asking today is not when, but how do we put the pieces of the labor puzzle together to get a real picture of our labor resources, so my department heads and managers can take action before a crisis arises?
Strategic Value Analysis: The Process Connection
Excerpt: With few exceptions, healthcare organizations are the most complex enterprises on the face of this earth. They are composed of interconnected and interdependent parts making up the whole. In the modern business vernacular, we call these parts processes. Processes are a systematic series of methods and practices directed to some end. In our healthcare environment, the end is “wellness” of the patients we are treating, but how many of these processes (admissions to discharge) are really of value in our customer’s eyes? The best measure we have found for determining best value is the value equation shown in figure 1 (function/cost = value). It has been our clients’ experience, utilizing THE VALUE EQUATION as their “best value test”, that any and all processes can be reduced by 30% to 40% in complexity. 10% of what is being done can be eliminated entirely, because it has been found to have NO VALUE. Read on
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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.
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