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SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

May 23, 2001

DEVELOP A STRATEGIC VIEW OF YOUR

SUPPLY/VALUE CHAIN FOR GREATER IMPACT

AND RESULTS!

 Robert T. Yokl, President, The HCP Group, Ltd.

Supply/Value chain management in hospitals and multi-hospital systems is a concept whose time has arrived, however, this concept must be translated into action.  The most comprehensive and effective approach to taking cost out of your supply/value chain is to develop a strategic view, permitting you to see the big picture before attacking this immense task.  Developing a strategic view of your supply/value chain will align you with your healthcare organizations’ objectives so that you will know what you should be focused on as opposed to falling into an activity trap.  A lot of activity with little results!

What is Your Organizations’ Mission or Reason for Being? 

We would all like to think we are aligned with our healthcare organizations’ strategic objectives, but are we really?  Are we in fact meeting our organizations’ needs or potential needs with our supply/value chain strategies and tactics, or are we just creating a lot of dust and smoke with our activities?  If you are serious about aligning your supply/value chain initiatives with your organization for greater impact and results, then you need to understand your organizations’ primary strategic objective first.  In a broad sense your healthcare organization only has four primary strategic objective choices as I see it:

1.                Low Cost Strategy: Squeeze the last dollar out of your expenses.

2.                High Quality Strategy: Conformance to requirements

3.                Zero Defects Strategy: Remove the variation in practices to save

4.                Customer First Strategy: Focused on customers’ needs and wants

5.                Niche Player Strategy: Concentration on one or two product lines

Once you have identified your healthcare organization’s primary strategic objective based on your interpretation of your organizations’ mission and vision, you then can devise your mission, vision, strategies and tactics for your supply/value chain management to align with your healthcare organization.

What Road Should You Take With Your Supply/Value Chain  

Now that you have identified your organizations’ primary strategic objective, you can plan the roadmap you will take with your supply/value chain with certainty.  For example, if your organizations’ primary strategic objective is the Low Cost Strategy you can target your efforts on squeezing out all waste and inefficiency in your supply/value chain by:

1.                Establishing a goal to purchase 95% of your commodities through

your GPOs vs. national average of 72%

2.                Re-focusing your value analysis efforts on supply/value chain optimization

3.                Reducing your inventory levels by 25% or more hospital-wide

By developing these types of targeted strategic goals, you can now have a roadmap to align your supply/value chain objectives with your organizations’ primary strategic objective, thus insuring that your supply/value chain efforts are focused on the right things that are important to your healthcare organization.

 Copyright © 2002 The HCP Group, Ltd.

Robert T. Yokl, President, The HCP Group, Ltd., has over 35 years of experience as a consultant and manager in the field of Supply/Value Chain Management and is one of the country's leading healthcare experts in value analysis, value engineering and materials management. He is the developer and program leader of the award winning Certified Value Analysis Practitioner Training Program™. Mr. Yokl is also the developer of the healthcare industry's leading ValueNetCentral™ Value Analysis Software. Over the past two decades he has trained thousands of healthcare managers in his patented Strategic Value Analysis™ and Team-Based Project Management™ processes and has assisted scores of organizations in developing their own value management programs. He has published six books, videos and audios on supply/value chain management. His latest book being, “ Strategic Value Analysis™: The #1 Smart Strategy for Taking Cost Out of a Healthcare Organizations’ Supply/Value Chain”.