A Unifying Supply Chain “Big Picture”

We all have felt the frustration of our department heads and managers (and even our senior management) not seeing the “big picture.” Rather, turf battles break out, road blocks are created or push back prevents savings from happening. The result is suboptimal supply chain savings performance.

The answer to the quandary is the unification of these silos, islands and fortresses with the creation of a unifying supply chain “big picture,” with a single database and performance metrics that your department heads, managers, senior management and you can use for joint decision making.

The goal of this data driven unifying resource is to raise the consciousness of your department heads, managers and senior management that all isn’t going well with your department heads and managers’ supply streams. This just occurred recently when a client’s laboratory manager couldn’t believe her eyes when she saw that her reference lab costs were twice that of her peers. This jolted her into action to reduce her reference testing cost without any arm twisting.

The beauty of this approach is that everyone throughout your healthcare organization is working with their own data, their own statistics and their own trend lines. The data can’t be refuted because it’s theirs – not yours! It also enables your hospital, system or IDN’s management to look over their department heads and managers’ shoulders to make sure their supply expenses are within acceptable limits. This can’t be accomplished or even measured with budget controls alone.

This also gives you an opportunity to create a “Learning Organization” vs. a “Gotcha” environment, because the data will give your department heads and managers’ insights into their supply chain expense’s unfavorable patterns and practices that they didn’t know existed. For instance, one of our clients was able to bring to the attention of their anesthesia director that his anesthesia trays’ utilization jumped 21 percent (or $8,297) of frequency, over five quarters, even though their patient days (CMI-adjusted) for this same period were actually down by 2 percent.

This undisputable fact, driven by data, enabled our client’s materiel manager to start an open dialogue with their anesthesia staff and quickly discover the reason for this variance; their staff was throwing out about 20 percent of their disposable anesthesia trays because the spinal needles were falling out when they opened a new 10-pak case of trays due to defective packaging. Happily, this was a no-brainer for the materials manager to solve.

Healthcare reform necessitates us thinking and doing things differently to bend the curve of our healthcare organization’s costs. To my thinking, this goal can only be accomplished by creating a unifying supply chain “big picture” with data and performance metrics that enables us to breakdown silos, islands and fortresses that have been built over the years by our department heads and managers.

This transformation will come about naturally and logically when your customers see the “big picture” themselves and then realize that they are out of step and alignment with their peer’s costs. All we need to do is to be the enabler of this process that creates the “big picture,” emphasize common goals, provide enterprise alignment and a learning environment for joint decision making.

About the Author

Robert T. Yokl

Robert T. Yokl is president and chief value strategist of Strategic Value Analysis® In Healthcare, which is the acknowledged healthcare authority in value analysis and utilization management. Yokl has nearly 38 years of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the new Utilizer® Dashboard that moves beyond price for even deeper and broader utilization savings. For more information, visit www.strategicva.com. For questions or comments, e-mail Yokl at bobpres@strategicva.com.