A
Note from Robert T. Yokl,
President and Chief Value Strategist
I was just reading a supplier’s magazine article about their
views on “vendor credentialing”. I don’t think I need to
tell you that your suppliers aren’t happy with dealing with
a score of vendor credentialing companies that provide this
service for their hospital or system clients. Their
complaint is that it’s confusing, time consuming and costly
to comply with all these vendor credentialing companies’
requirements.
They would like to see a “Universal Vendor Credentialing
Passport” that would standardize these requirements so they
could have access to any hospital or system in the county
with one passport. Great idea, but probably not practical
with the free market system under which we all operate
today.
However, I would suggest that the vendor credentialing
community should consider forming a healthcare industry
vendor credentialing standardization committee to consider
the views of the suppliers, since they too are their
customers! From my point of view, it isn’t good business for
them to ignore these supply chain partners who are actually
paying for this service. Wouldn’t you agree?
Warmest Regards,
Bob Yokl
Robert T. Yokl
Chief Value Strategist
P.S. I thought I would let you in on a little insider’s
information. I’m just about ready to publish my new book
“10 Biggest Mistakes Buyers Make and How to Avoid Them”
on Amazon.com in a few weeks, which is a primer for anyone
who buys anything. I will keep you informed of the
publishing date so you will have an opportunity to preview
it when it is available. I’m having a lot of fun getting it
ready for prime time, so I’m looking forward to your
reaction to it.
Do You Have a Supply Chain Game Plan?
To
survive over the next 10 years, most healthcare organizations
anticipate needing a 20% reduction in their labor and non-labor
expenses to offset the revenue reductions that are expected from
healthcare reform, economic downturns and cuts in their Medicaid
reimbursement.
This is an unprecedented turn of events when you consider
healthcare organizations have never been asked to do so much
(value-based purchasing, Medicare and Medicaid cuts, ICD-10, EMR,
bundled payments, etc.) in so little time without any relief in
sight.
In my opinion, to meet this monumental goal of a 20% improvement
in hospital operations will mean reinvention of what healthcare
organizations are doing now – from top to bottom. Since supply
chain expenses are 35% to 40% of a healthcare organization’s
operating expenses, this expenditure will naturally be a ripe
target for cutting to the bone.
So what is your game plan for making these improvements happen?
If you don’t have one now, may I suggest that you start
developing one, since planning is the key to weathering this
perfect storm that is upon us. As I see it your plan should
incorporate these three key elements to radically change how
your supply chain operations are delivered now:
1. Redesign everything you are doing now.
By redesign, I don’t mean nibbling around the edges. You
need to blow up what you are doing now and reinvent it from
the ground up. For example, why do you need buyers any
longer when technology (i.e. Amazon model) will enable your
department heads and managers to order directly from your
suppliers without any human intervention? This is the
radical redesign I’m talking about that you need to be
planning and implementing to stay ahead of the cost curve.
2. Centralization of all supply chain
responsibilities
From my vantage point, hospitals still haven’t truly
centralized all of the material management functions and
activities under supply chain management. There are still
too many outliers (food, pharmacy, laboratory and
maintenance purchasing, purchase service contracts, and
inventory management) delegated to your department heads and
managers. This liberal practice must stop if you are to
squeeze the last dollars out of your sup- ply chain
expenses.
3. Integration into a bigger supply chain network
If your hospital isn’t already integrated into a healthcare
system’s supply chain service center where you can avail
yourself of the economy of scale that this progressive model
brings about,then you should be planning to join or create
one in your region so you can make a great leap forward in
productivity, cost avoidance and GPO savings.
“Planning is bringing the future into the present, so you can do
something about it now”, is the wisdom of Alan Lakein, time
management guru, that we all need to take seriously when looking
to the future of healthcare supply chain management.
Small incremental changes aren’t going to yield a 20%
improvement in your supply chain operating expenses. Only by
radically changing what you have been doing will you be able to
achieve the extraordinary savings in your supply chain
operations that are needed for your healthcare organization’s
survival over the next 10 years. What better time to do so when
the seas of change are still relatively calm, placid and
forgiving.
Warmest Regards,
Robert T. Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
Bobpres@strategicva.com
1-800-220-4274
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