Savings Beyond Price™
Innovative Supply Savings and Quality Solutions That Work
by 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.
Savings Beyond Price -Weekly eNewsletter - September 24, 2009
Robert T. Yokl
President & Chief Value Strategist
3 Keys to Successful New Product Selection
Greetings,
One thing ALL healthcare organizations have in common is that they ALL buy new products every month. In doing so, they are making an investment that they believe will maximize their return-on-investment either quantitatively or qualitatively. Otherwise, why would you make the purchase?
Since new product purchases can add hundreds of thousands of dollars in direct and indirect cost to your hospital’s operating budget each year the process employed to evaluate and select these new products should be financially, operationally and qualitatively sound.
To assist you with this important job, we have found that there are three keys to successful new product evaluation and selection (PE&S) and they are as follows:
1. CALCULATE ROI for each purchase
Return On Investment is a simple calculation and calculators can be found on a dozen websites that will enable you to determine whether the proposed purchase is a poor, good or excellent investment.
Most hospitals are shooting for an ROI of at least 300%, within one year, before a product will even be considered for purchase. This financial test alone will cut your new purchase requests in half within three months, because very few products can pass this ROI assessment.
2. OBSERVE how purchase will be used
Don’t believe ANY requesters’ explanation on why they need to purchase a new product, before your or a designee has actually observed why this product is absolutely positively needed. The reason: Customers don’t need everything they say they need.
I remember sitting in on a value analysis team meeting that was evaluating a $200,939 upgrade to one of our client’s current lab information system only to find that the upgrade their lab manager was requesting wouldn’t perform the tasks he had described in his requisition. This vital information was only discovered when a VA project manager was assigned to observe, investigate and value justify this high ticket expenditure. This protocol saved my client a $100,000 expenditure that wasn’t needed at all.
3. SEARCH for lower cost alternatives
It’s rare that you can’t source a lower cost alternative product for almost anything your department heads and managers are requesting. Don’t just accept that they have requisitioned the best value, since this is hardly ever the case. It’s your job to search out an equivalent and reliable substitute that costs less.
For example, one of our clients’ VA director’s searched and found an IV set stabilizing device that is one-third the cost of national brands. Conversely, none of her clinical department heads and managers brought this lower cost alternative to her attention. She had to do the investigative work herself!
These three keys, when employed in tandem, will dramatically improve your new product evaluation and selection process. From our empirical experience it will actually take LESS time for you to assess your new products than your current PE&S methodology. Try it, you might like the results!
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. We just released our Utlizer® Dashboard Version 3.3 with an automated value analysis balanced scorecard that ensures ultimate accountability for your VA teams. If you would like to know more about it you might want to click on our press release to be found at PRWEB.com.
***Just Released***
Free Special Report
Supply Chain Utilization
Targeting your next big savings opportunities
"Could a misalignment that comes with a simple (and less costly) fix be eating away at your savings?"
"Beware of Standardization"
"Managing utilization costs can save six to 10 percent on total supply expenditures"
The Savings Beyond Price Blog Is Back and Better than ever!
Just Announced!
Value Analysis Leader Resource Web
The #1 Resource for Supply/Value Analysis Savings!
- Fast Savings Ideas/Guides
- New Tools
- New Success Models
- New Forms & Checklists
- Videos
- Webinars
- Audios
- Benchmarks
- Tutorials
|
Sign Up for Our FREE Weekly Savings Beyond Price eNewsletter to Receive Exclusive Content Not Found Anywhere Else
PLUS as an added Bonus, we'll
also send you our SPECIAL REPORT "Your
Targeted Blueprint for Supply Savings Success!"
Subscribe Today! |
© 2008 - The Strategic Value Analysis in Healthcare, P.O. Box 939, 3887 Skippack, Pike, Skippack, PA 1-800-220-4271
About SVAH - Blog - Press Releases - Technology Value Analysis - Clinical Value Analysis - Events & Speaking Engagements - Case Studies and Success Stories - General Hospital Consulting and Supply Chain Management - Value Analysis Bookstore -Value Analysis University Supply Best Price Analysis - Supply Chain Scorecard and Dashboard - Supply Six Sigma - Strategic Supply Chain Management Planning - Value Analysis Software - Value Analysis Services - Healthcare Supply Expense Reduction and Analysis - Value Analysis Team Training Programs - Supply Chain Best Practice Series TeleSeminars Savings Beyond Price Newsletter - Strategic Value Analysis in Healthcare White Papers - Supply Chain Benchmarking - FREE Savings Beyond Price Weekly Newsletter - Archived Weekly Value Analysis Articles -Hospital Consulting Clients - Contact Us