Why Product and Process Variation Is Your Next Supply Chain Saving Targets

You have driven down your products, services and technologies’ prices to where there is little room for improvement, and you have standardized on most commodities that you buy. So, where do we go from here to save money?  One answer to this challenge is to reduce your product, services, technologies and process variation (i.e., size, sharp, length, widths, color, texture, steps, yields, etc.)  so that they are conforming to requirements.

 

Where to look for supply chain product, services and technology variations

A good place to start to look for product, services and technology variation is in your operating room. Because of the dissimilar training each of your surgeons have received from their mentors/medical schools there are hundreds of product, service, technology and process variations in their practices.  The best way to identify these products, services and technology differences is to analyze your surgeon’s preference cards for disparities between surgeons.

Hopefully, your surgeon’s preference cards are computerized. If not, you will need to computerize them for the purpose of this analysis. Once you have identified difference between practices, you will need to have your surgical value analysis teamwork with your surgeons to reduce the variation you have uncovered.  This protocol will generate thousands of dollars in savings for your healthcare organization — almost immediately!

 

How to look for supply chain process variations

One of the tenets we teach in our value analysis training program is that when you perform a value analysis study on a product, service or technology, with over a $100,000 annual spend, you need to map the supply/value chain process of this commodity to identify the key inputs and outputs of the process. Inevitably, you will discover — more often than not — excessive steps, wasted time and motion, duplication, and wide variation compared to your peers that is costing your healthcare organization money. For example, a few years ago a client of ours found that his nurses where throwing away a sterile surgeon’s glove from a pair they opened each time they performed a certain procedure, since they only needed one sterile glove for their requirements. To ignore this value analysis tenet is to throw away thousands of dollars annually!

 

Conformance to requirement should be your goal

All products, services, and technologies are bought with the goal that they conform to the requirements of your customers.  Unfortunately, customers specify and employ products, services technologies and processes that are variations (i.e., size, sharp, length, widths, color, texture, steps, yields, etc.) of other products, services, technologies and processes that are in a healthcare organization’s protocols or formulary.

To reduce these variations, that are costing your healthcare organization time, resources and money, supply chain leaders need to have their value analysis teams address these differences by developing a computerized supply formulary (organized by the product, service or technology function) to identify theses variations at the time of purchase. Otherwise, it will be difficult to reduce these variations once product, service or technology has been purchased.

 

 

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