For decades supply chain professionals have lead the way in supply savings initiatives with much success and acclaim. Now that your senior management is looking for even higher and deeper supply savings, it’s not about winning yourself, but making your department heads and managers winners. There are three reasons that this paradigm shift is necessary: Supply chain professionals no longer have the time, knowledge or resources today to make "gigantic" savings happen; when supply chain professionals lead a savings initiative, you reduce the commitment and ownership of your department heads and managers by 50 percent to 80 percent; and your department heads and managers are in control of their supply budgets and specifications (not you). Therefore, they must make the savings happen. A much better way to lead is to coach, facilitate, train and consult with your department heads and managers who are then organized into value teams, so that they can make the savings happen themselves.

Out with the old,
in with the new

If you are honest with yourself, you now realize that price isn’t king any longer (our studies show only 1 percent, 2 percent or 3 percent is left in this supply chain operational area to be saved) in your arsenal of supply chain cost reduction strategies and tactics. Standardization has been attained in almost all supplies categories at every hospital in the U.S., with the exception of about 14 physician high-preference product classifications, e.g., pacemakers, orthopedics, spine implants, stents, etc.

Yes, you can decide to continue to try to squeeze and press your group purchasing organizations and prime vendors for better pricing and deeper discounts to shave a point or two off your current cost, but this tactic isn’t working any longer unless you are willing to enter into long-term committed-volume contracts with your vendors. You might think that "gainsharing" is going to be your "magic bullet," but the mechanics of gainsharing programs are complicated, hard to measure, and its affects are short-lived when you look at the big picture.

Or you can be more progressive and proactive by attacking huge savings opportunities that are still left in your supply chain. They are found in your utilization misalignments, value mismatches and wasteful and inefficient methods and practices. In fact, our studies show that there are 3 percent, 6 percent or even 9 percent in supply savings left untouched in most healthcare organizations’ supply chain operations today. You aren’t going to be able to achieve these hidden supply chain savings without the commitment, cooperation and training of your healthcare organization’s department heads and managers to make these savings happen for you.

5 new skills for 4 new roles

A supply chain professional now needs to develop the new skills of coaching, facilitation, training and consulting so that he or she can guide their value teams of department heads and managers by showing them the way to move in the right direction, as opposed to pushing and pulling them in the wrong direction! These new skills include the following:

• Setting challenging goals

• Asking effective questions rather than giving instructions or commands to raise their awareness

• Insuring that your value team looks at as many functional alternatives as possible before making their final value judgment

• Facilitating a process feedback and assessment to constantly improve your value team’s performance

• Training your value team members in the art and science of value analysis

These four techniques are only the building blocks for coaching, facilitating, training and consulting your value teams, but they are a good starting point in which to apply these performance skills.