Connect with this month's featured Advertisers:

The best news I can give you on this topic is that you can hold onto any and all of the utilization savings, as opposed to price savings that you achieve, because they will be permanent if you look beyond price for them.

These new "Savings Beyond Price" nest eggs can become a reality for you when you follow these eight new rules:

No important journey has ever been successful without a roadmap to point the way. That’s why it is so critical for you to have a strategic supply chain operational plan (sscop). Without a sscop, you could quickly find that your unplanned activities could be a very dangerous, wasteful and costly journey.

Too often, supply chain professionals limit the scope of their supply chain savings reduction programs to their core medical/surgical products. However, depending on the size of your hospital, 29 percent to 49 percent of your supply spend is in your purchase services. This is where you can find 11 percent to 16 percent in new savings opportunities because no one is really in charge of this purchasing category.

You don’t want to be a blind archer who rarely, if ever, hits the target. You can hit the target 99.6 percent of the time by benchmarking to uncover your utilization misalignments (wasteful and inefficient consumption, misuse or misapplication of your products, services and technologies) at the sku (stock keeping unit) level.

Don’t wait to be told by your management to make more savings happen beyond price. Be proactive in searching out and implementing your utilization savings before you are pressured to do so by your management.

My experience has been that top-down initiatives work best. Consequently, you need to educate your executive management on the benefits of attacking your utilization misalignments. These benefits include 26 percent average savings, elimination of defects and control of the variation in your products, services and technologies. And then, you give them your game plan on how you propose to do it.

Adopt new ways of doing business by adopting the principles and practices of supply six sigma or lean management that will create a new culture of waste avoidance and the unremitting search for greater efficiencies and conformance to requirements. By doing so, you will move your organization from a "no" culture to a "yes" culture – almost overnight.

The only way to raise the bar on how you are attacking your utilization misalignments is to think, do and act differently. This means you need to have new rules of engagement that promote "creative friction" with your value team members and new ways to uncover and implement your utilization savings. It all starts with you moving from a products evaluation (intuitive) model to a functional analysis (scientific) model to wring the towel dry on your savings.

With the right technology you can uncover, implement and control your utilization misalignments quickly and painlessly. Without leveraging technology, you could be lost in the wilderness and never find your way.

I know that price savings are an easy and quick way to demonstrate your value to your healthcare organization, but what are you going to do when inflation eats into your price savings and leaves you nothing to show for your efforts? 

It’s about time for you to think about looking beyond price to make a quantum leap forward in utilization savings for your healthcare organization.