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 - July 28, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Unintended Consequences of Standardization

Greetings,

I was talking to a MM the other day (let’s call him Jim) from a large health system about the “unintended consequences” of hospital supply chain standardization which naturally peaked his interest.  I told Jim that if he continues solely down the standardization path, as he had done for years, he will save money over the short-term, but over the long-term it will actually cost him and his customer’s time, money will even lower his quality…over time!

Now that I had Jim’s attention, He wanted to learn more about this concept, so that I thought I would let you overhear this conversation with this MM so you can learn from our empirical experience and then employ this transformational idea at your own healthcare organization.

I went on to tell Jim that over the last nine years we have observed that no “one size fits all” value groups (segmentation of customers by their functional requirements) when it comes to product selection. If he tries to standardize on one product, service or technology at any one of his hospitals or system-wide he will find that he will be OVERSHOOTING or UNDERSHOOTING the target 97% of the time, which will cost him money.

I gave Jim this real life example to prove my point.  Setting in on a value analysis team meeting one day, before the meeting even started I heard the Chief Radiology Tech ask the hospital’s Director of Material Management, “Who decided to standardize on fitted sheets for every hospital department recently.”  The MM then stated that the Environmental Services Department made this decision.  Well, the Tech stated briskly and annoyingly “that this decision was costing her department time, money and quality since the Radiology Department has always used flat sheets to transfer their patients from a gurney to the x-ray table then back again”, and they can’t do this with a fitted sheet. That’s when this MM quickly realized that “one size doesn’t fit” all staff or department’s requirements and promised to solve this problem immediately.

Jim said that he had heard stories like this before at his own hospitals and now could see clearly how standardization could have “unintended consequences” which would cost him time, money, and quality over time.  I left this meeting with Jim feeling that I had made one more convert to this myth destroying idea that standardization does indeed have “unintended consequences” that are costing our healthcare organizations BILLIONS annually in unneeded and unnecessary over or underspecified products, service and technologies. Does this make sense to you too?

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. We just rolled out our new two-day (on-site) Advanced Value Analysis Training Program where participant’s report immediate success with the techniques and strategies they learn on the very first day. Isn’t it time you consider having your value analysis team trained to improve their performance too?

 

 

 

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