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Savings
Beyond PriceTM -Weekly E-Zine- May 6, 2005
by
Robert T. Yokl, President and Chief Value Strategist
SERVICE
PURCHASING: The Last Bastion Of Supply Chain Performance That Can
Produce Double Digit Savings For You
 Purchase
Services Represent 50% or More Of Your Hospitals or
Systems Annual Purchasing Spend, Yet Isn’t Being
Attacked Strategically Or Systematically
Supply chain professionals have habitually
focused their savings efforts on the products segment of
their supply chain. Yet, these same professionals
haven’t made a full court press on their service
purchases that represent 50% or more of their annual
purchases. Since purchase services can produce double
digit savings for you, why is this happening?
Seven Reason Why
Purchase Services
Are Taking A Back Seat
To Products Savings
Our research has led us to the conclusion that there are
the following seven reasons why purchase services
are taking a back seat to products in the purchasing
hierarchy:
1. Capturing
the service spend can be daunting and
overwhelming process.
2. It
is more difficult to determine the scope and
specification of a purchase service than a product or
technology.
3. Evaluating
a purchase service can be a very complex, time
consuming and multifaceted process.
4. Purchase
service owners believe that their contracts are
unique and shouldn’t be evaluated by anyone but
themselves.
5. Most
purchase service contracts are rubber stamped by
purchasing officers, instead of being evaluated or
sourced.
6. Too
often the purchasing process is bypassed
altogether for purchase services as a hospital policy.
7. Many
times there are no natural owners to work with in
evaluating and sourcing purchase services.
Now this being said, what should a supply chain
professionals’ role be in evaluating and sourcing your
hospitals or systems purchase services.
You Must Become The
Chief Catalyst, Strategist And Evaluator For Your
Hospital Or System’s Purchase Service Contract’s Process
Setting aside the reasons why purchase service contracts
are a formable task to manage and control, from a legal
point of view, supply chain professionals must become
the chief catalyst, strategist and
evaluator of ALL purchase service contracts
for your healthcare organization to insure your
organization’s substantiality. No department head,
manager or administrative staff should bypass
your purchasing department for this “mission
critical” process or they should pay a high price
for doing so.
If
you don’t assume this responsibility – who will? This
is your legal right and duty as the designated agent for
your hospital or system to effectively manage and
control your purchase services.
In
means specifically, that you will work as a catalyst,
strategist and evaluator in consultation with your
customers, stakeholders and experts in the
development or value justification of all new
and renewal purchase services contracts.
If
you will take on this responsibility the payback
for your efforts will be in the range of 15% to 20%
savings on each purchase service contract that you
realign, renegotiate, revise,
refine and re-invent.
MAILBOX
I’m The Chairperson For A n 11 Rural Hospital Regional
Healthcare Network’s Purchasing Committee That Is
Looking Into A GPO Agreement For Our Network. What
Should I be Looking For In Bidding Such An Agreement.
C.H.
C.H. this is a new GPO strategy for small rural
hospitals that has successfully taken hold around the
country, so I first want to congratulate you and your
network for exploring this new savings strategy,
because yes there is strength in numbers even for rural
hospitals. In fact, one network executive director I
talked to recently told me that her network saved an
additional $2 million dollars annually for her network’s
members by employing this stratagem.
With this said, the successful rural networks that have
employed this new GPO strategy have asked for and
received from their GPO: (i) a full-time GPO coordinator
to manage their network’s account at no additional cost
to their network, (ii) have been able to pool their GPO
volumes to increase their tier level savings for all of
their members and, (iii) were able to standardize on the
lower cost products network wide since their GPO
provided a customized and individualized contract for
their network as opposed to their typical contract
offering.
G.H., as you can see from my comments, your network is
about to ride a new wave of savings for your network’s
hospitals that is becoming a best practice
throughout the country.
Bob
Yokl, Sr.
Chief Value Strategist
Strategic Value Analysis In
Healthcare
800-220-4274
bobpres@strategicvalueanalysis.com
P.S. If anyone
else has a burning question that you would like me to answer, please
call or e-mail me and I would be delighted to answer it.
 There
Is Still “Gold In them Thar Hills”
It’s Time To Insource Your Beeper Service At A 14% To
16% Savings
As Technologies Change
There Is More Opportunities For Insourcing Of Services
Than Ever Before
Most hospitals use beeper services for their
administrative and medical staff to quickly communicate
important messages to them via wireless communications.
Now that the cost of purchasing beepers is as low as
$29.95 or less and a base station cost is below $20,000,
it now makes sense for your hospital to consider
insourcing your beeper system.
This idea is just the tip of the technology iceberg.
My own company has just recently insourced our T1 lines
so we can transmit and manage our ValueNetCentral™
Supply Value Analysis software on the World Wide Web. We
also at the same time insourced the technical support
function for our ValueNetCentral™. This was all
accomplished for a few hundred dollars a month; whereas,
it was cost prohibitive for us to even consider these
technology Insourcing options just a few years ago.
Your hospital has the same insourcing opportunities on
your paging system, cell phones, teleconferencing,
e-mail, web hosting, intercoms, transcription service,
etc., now that the cost of technology insourcing on a
myriad of services has never been lower.
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If You
Think You’re Currently Saving All That You Can,
YOU’RE WRONG!
 At
This Moment, You Are Losing As Much As Six to Nine
Percent in Invisible Costs That Can Be Quickly Cut And
Pruned…Today
If you think your healthcare organization
is currently saving all that it can, YOU’RE
WRONG! At this moment, your organization has as
much as six to nine percent in invisible costs that
could be cut and pruned from your supply chain
budget…today. But saving money is actually easier
than you might suspect with the right kind of analysis,
teamwork and action. So, come along as the leading
authority on supply value analysis walks you through the
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believed possible with his new book.
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more!
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STRATEGIC
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IN
HEALTHCARE
