Moving beyond typical boundaries may quadruple your savings

I bring up this topic because I’m hearing too many supply chain managers tell me that they aren’t responsible for, or in some circumstances, aren’t even interested in expanding their "savings span," which could easily quadruple their savings yields almost overnight. With this said, here are a few ideas, comments and insights on how you, too, can have limitless boundaries over your supply chain spend that can open up a whole new world of savings for you.

We have found that purchase service contract savings alone can be equal to or greater than any and all supply expense savings on any given period that we measure for our clients. That’s why it is mission critical for you to enlarge your span of control into every area of your supply chain expense operations (e.g., food, transcription services, travel, dues and subscriptions, biomedical engineering, telecommunications, records management, utilities, temporary help, waste management, etc.). If you don’t, nobody else in your healthcare organization will take on this responsibility to credibly, honestly and effectively manage and control these expense outliers.

To illustrate my point, clients of ours, whose materials management’s span of control is limitless and borderless, have documented savings in their transcription services of $250,292, telecommunications of $752,922, utilities $192,546, etc., because they see it as their responsibility to manage and control all of their healthcare organization’s supply spend – not just a few of them.

Even when a department head says that they have their supply expenses under control, nine out of 10 times, we have found that these statements of fact are, in fact, fiction. Remember the old adage, "trust, but verify" if you want to save even more money for your healthcare organization.

We have found that supply chain managers who don’t attack these ripe and bountiful new savings opportunities don’t think it’s in their job description to do so. However, from my experience this is virgin territory that, with few exceptions, no one has claimed in your healthcare organization and that you can move under your span of control. It’s now time to take charge!

I can say this with confidence because I extended my span of control with impunity at every hospital, system and integrated delivery network that I worked in when I was a materials manager. When I was a young materials manager I did it because I didn’t know any better. I thought everyone did it!

When I was a mature materials manager, I did it because I knew that I could save millions for my healthcare organization. Best of all, I found that no one would stop me in my quest to expand my control over all my healthcare organization’s supply spend because in most cases no one was really actively in charge of these hidden and ignored areas of my hospital, system or IDN. These healthcare organizations let the door open for me to jump in with both feet, which you also can do with impunity.

I like the term "limitless boundaries" because it speaks to the boundless savings opportunities that are available to all supply chain managers if they are willing to jump in with both feet. Since most hospitals, systems and IDNs supply savings are shrinking, why not open new savings doors that will result in 12 percent to 18 percent in new savings for your healthcare organization?

Robert T. Yokl is president and Chief Value Strategist of Strategic Value Analysis In Healthcare, which is a leading healthcare firm in supply and process value analysis. Yokl has nearly 30 years of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the Utilizer Dashboard that extends beyond spend management for deeper and broader utilization savings. For more information, visit www.strategicva.com. For questions or comments e-mail Yokl at bobpres@strategicva.com.