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Lean management can energize, grow value analysis programs

While this has a nice ring, it really isn’t the kind of progressive management thinking that will lead you to new savings and quality breakthroughs in your supply value analysis program. A much better way to keep your supply value analysis program fresh, vibrant and effective (even if it isn’t broken) is to always be on the lookout for new strategies that can improve your value analysis performance.

One such technique that I would recommend is to combine the principles of lean management with your value analysis methodology because it will absolutely increase your savings yield by as much as 200 percent, 300 percent or even 500 percent. At the same time it will also dramatically improve the quality of your supply chain operations and your customer’s satisfaction ratings.

We all have been enticed or persuaded to try a new tactic that sounded good on paper, but didn’t pan out in the real world of supply chain management. I’ve had more than my share of these disappointing experiences.

However, when we added lean management tactics to our supply value analysis program a few years ago, the results were astounding. We were able to improve our clients’ savings yields by as much as two times, three times or even five times what our clients had been experiencing before we taught them the lean management way of doing things.

Why? Lean management (it’s often called a waste-remover machine) focuses your efforts on the waste and inefficiency in your supply chain where our studies show that 66 percent of all of your new supply savings reside. It all begins by identifying your customers’ "Critical to Quality" requirements, starting with a blank piece of paper, to clearly understand their exact specifications (not more or less) for what they are buying.

For example, one of our clients standardized on a $5.62 IV set for their entire hospital when this level of product sophistication was only needed in their operating room and emergency room. This hospital was wasting hundreds of thousands of dollars a year in unnecessary and unwanted IV set features. The lean way would have been to listen to the voice of all of their customers critical to quality requirements for each department’s IV sets, and then customize to their exact specifications. Do you get the idea? One product, service or technology doesn’t fit one size. If you try to make it fit through standardization you are costing your healthcare organization hundreds of thousands (maybe millions) of dollars a year.

Lean management was created by auto giant Toyota, and its 14 lean management principles have transformed thousands of for-profit and non-profit corporations around the world into streamlined, waste-
reduction machines.

The lean management philosophy centers on the idea that small, incremental improvements every day, every week and every year consistently bring about big changes in organizations by: 1) eliminating all waste and inefficiencies, 2) optimizing the effectiveness of everything that’s done, and 3) institutionalizing lean thinking throughout the entire organization. More importantly, lean management is a fundamental and essential evolution for any and all supply value analysis programs.

Value analysis shouldn’t be a static discipline. It should always be growing and maturing by taking on new, proven techniques that really work. Lean management has a 27-year history of increasing speed, building quality into your supply chain operations, eliminating the costs of hidden waste and turning your value analysis team members into quality-control inspectors.