HERE IT IS: The little-known secret is training your department heads and managers to reduce their supply chain cost. They own their budgets and their specifications so they now must own their own savings output, too! It’s just that simple!

Why aren’t healthcare organizations training their department heads and managers to reduce their supply chain expenses? The first of three reasons is the mistaken assumption that "saving money is material management’s business not everyone’s business." This couldn’t be farther from the truth.

Material managers are experts in price points, group purchasing, negotiations, standardization, inventory management and sourcing. But they have no control over their department heads or manager’s budget or specifications for millions of dollars worth of products, services and technologies they purchase annually. This is why department heads and managers need to be taught new skills and given new advanced techniques to "wring the towel dry" on their own supply savings.

Materials managers by themselves cannot eliminate all waste and inefficiency in their department heads and managers supply chains. This is the exclusive territory of your department heads and managers. Conversely, materials managers should act as facilitators for their department heads and managers cost reduction efforts.

When organized into value teams, your department heads and managers can harness their power and experience to uncover those hidden savings, instead of material management.

The second reason why this simple idea hasn’t been embraced is that supply chain cost reductions are not priority No. 1 with hospitals, systems and integrated delivery networks. How do I know this?

Every time I hear about a new initiative (e.g. performance improvement, lean management, customer satisfaction, Six Sigma, etc.) that is being introduced at a hospital, system or IDN these organizations are meticulously and methodically training their department heads and managers in these new disciplines. Yet when a hospital, system or IDN is inaugurating a new supply chain savings initiative, I never hear of anybody getting trained! Is there something wrong with this picture?

Supply chain cost reduction programs are not priority No. 1 at most hospitals, systems and IDNs. If they were, they wouldn’t be left to chance, as opposed to training and educating your department heads and managers in this mission critical discipline. Even professional gamblers (if you have been watching these televised poker games on TV, you will know what I’m taking about) aren’t about chance; they are all about preparation and training, which increase the likelihood of success. We need to consider these facts when we are developing our next supply chain initiative.

The third reason is that department heads and managers say that they don’t have the time to save money. However, they seem to always have the time to meet with sales representatives on new gadgets that probably won’t save them any time, money or resources. So how do they find the time for these meetings which are usually time wasters?

Finding time to save money is a management responsibility in the 21st century. No longer is it somebody else’s business. It’s everybody’s business to save money. Since it is harder to find new revenue streams for healthcare organizations, the only way to maintain or improve a hospital’s profit margin is with incremental cost reductions.

The bottom line: These cost reductions begin and end with your department heads and managers, so it’s their job to find time for savings, too.