Supply Business Intelligence: What’s Your SBI Intelligence Quotient?

Howard Dresner, a Gartner Group Analyst, coined the phrase “business intelligence” in 1989 to encompass all “concepts and methods to improve business decision making by using fact-based support systems.” This definition has since been broadened over the years to include measurement, analytics, data mining, reporting, collaboration and knowledge management. In brief, business intelligence makes for better decision-making!

I bring up this topic because I see a particular relevance in this discipline as it applies to how supply chain professionals acquire, analyze and then apply their own supply business intelligence (SBI) to their decision-making. The reason this should be important to you is the more timely facts, data and information that you have unlimited access to, the easier it gets to make decisions. For instance, if you knew that your cost per patient day (CMI adjusted) for your disposable isolation gowns was twice that of your peers, wouldn’t it be an easy decision to investigate why this was happening? Or, if you saw that your biomedical repair cost per device was 55% higher than your cohort hospitals, wouldn’t you be curious to know why this is occurring?

That’s what SBI can do for you. Specifically, it can help you to identify, extract and analyze your supply chain data across your healthcare enterprise to improve your performance in all areas of your operations. SBI can also provide you with historical, current and predictive views of your supply chain expenses so you can act versus react to changes in your hospital, system or IDN’s supply spend. At my firm, we are especially tuned in to a healthcare organization’s historical supply cost per stockkeeping unit, since it’s a predictor of where our client’s supply costs are escalating. If we see a cost per stockkeeping unit say on I.V. sets jump 22 percent over three quarters then we want to know why this has occurred. It’s an early warning signal that things aren’t quite right!

What is your intelligence quotient? Do you have the kind of SBI I just talked about at your fingertips? Can you dig and drill down with a few clicks of your mouse to see which of your hospital departments are buying isolation gowns (and how much they are buying currently and historically) or see what your biomedical cost is per adjusted patient day for any given period? Do you have price and utilization benchmarks for everything you are buying? If not, then you have a very low supply business intelligence quotient that needs to be brought up a few notches!

How do you improve your supply business intelligence quotient? The first thing you need to do if you want to raise your SBI quotient is to develop or purchase a SBI power tool that can capture, evaluate and then alert you to anomalies in your supply chain operations. This isn’t a job for spreadsheets, since they are too rudimentary a tool to do this important work. Next, you will want to use your supply business intelligence to prioritize your SBI projects, and lastly, you will need to obtain commitment and sponsorship of your SBI projects from your senior management. This is the success formula to increase your SBI quotient, guide your actions toward your SBI goals, and improve your supply chain performance. I know of no shortcuts, alternate routes, or by-passes you can take to have the same quantitative and qualitative results.

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 For questions or comments, e-mail Yokl at
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