We have watched the discipline of value analysis mature over the last few decades. Yet, it has been our observation that the administrative tasks associated with value analysis (e.g., agendas, minutes, attendance, requests, analytics, project status, saving reports, etc.) are still predominantly maintained on inflexible, outdated and opaque spreadsheets.
In our opinion, this healthcare value analysis tool has passed its time and is now holding back the efficiency and productivity of hundreds of value analysis programs in multiple locations who have embraced spreadsheets as the tool of choice for administering their value analysis programs.
Further, it is now mission critical now that most hospitals are a subsidiary of a system or IDN, that your hospital value analysis team leaders and team members have real time access to their VA actionable data, not wait for time sensitive information to be distributed via the internet or extranet. With this said, here are three benefits of moving your value analysis administrative tasks to the “cloud”:
Provides Real-Time Reporting and Analytics: First off, once an entry (e.g., new request for product, service or technology) is made by anyone on the health systems value analysis “cloud-based” network, this data is available in real time for review or take action by all value analysis team leaders and team members. Trust me when I tell you that this can’t be accomplished with a spreadsheet. Additional, savings, quality and safety improvement analytics are available for all team leaders. Thereby, simultaneously sharing the best savings, quality and safety ideas for your value analysis teams to review and work on.
Greater Visibility On All Value Analysis Projects: When your VA team leaders and team members see their VA projects status and compare them to others in your value analysis “cloud-Based” network you will see a competitive atmosphere take hold. This could mean an increase of 3x the productivity on VA projects that you have experienced in the past.
Improves Efficiency and Productivity: Having all of your value analysis operational activities in one “Cloud-Based” network will lower your cost, increase your speed of communications and provide in real time all data, documents and reports required by your VA team leaders and team members to move to the next level of value analysis performance.
Spreadsheets definitely have their place as a jack of all trades type tool but I hope you will agree that they have their drawbacks, especially when you need to update or share this information with your value analysis team leaders and team member in real time. Think about this; In the 20th century hospital value analysis programs deserve state-of-the-art tools to efficiently and productively conduct their value analysis programs. That’s why spreadsheets are being replaced by “cloud-based” networks that offer timely, efficient and innovative solutions no matter where your value analysis teams are located.
If you are looking for innovative VA and Utilization Tools, please sign up for a no cost no obligation demonstration to see how you can take your program to a whole new level.
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5 Reasons Why Most So-Called “Value Analysis Programs” Fail To Produce Double Digit Savings
“Let’s Face It…Most So-Called Value Analysis Programs Are Window Dressing To Impress Senior Management. If These Organizations Were Really Serious About VA They Would Be Producing Double Digit Results, Not Just Talking About Them!!"
I hear a lot of talk from supply chain professionals about how they want to reinvent their current value analysis program to produce double digit savings, but I have only seen a few that are actually doing it. Meanwhile, there are scores of hospitals and systems were we have provided their value analysis training, coaching and mentoring that are saving, on average, 26% annually. How can you explain this disparity in results?
Here are five reasons why traditional and conventional value analysis programs fail to generate double digit results:
1. Lack of Vision
We all know about that vision thing and how the lack of it will lead us in every direction -- but forward! To be successful in value analysis you must know before you start what your value analysis program will look like when you meet your stated mission.
Your Mission: “To reduce your supply chain/non-salary cost to the lowest levels possible, while providing reliable products, services and technologies to your customers.”
How will it look to others? What will people say about it? What results do you expect to achieve? How will it change your culture?
2. Lack of Cultural Commitment
Healthcare organizations that are culturally committed to being a “low cost provider” consider their cost as their enemy and are always on the attack to reduce it. If your organization doesn’t have “lean thinking” attitude you will never achieve double digit savings.
3. Lack of Organizational Architecture
It not enough to know the classic philosophy, principles and practices of value analysis; you also must be organized to save. By organized to save I mean, you must develop a team approach to value analysis that holds people mutually and individually accountable for results, not just talk a good game.
4. Lack of Training
New skills, techniques and tactics are required for you to reduce your supply chain/non-salary expense beyond price. These skills can only be acquired by advanced value analysis training. Then and only then, can you ensure consistency, greater focus, effectiveness and superior productivity in your value analysis program, as opposed to “winging it” and hoping you will save something for your efforts.
5. Focused on Price and Aesthetics
With few exceptions, 99.9% of all value analysis programs are focused on price and the aesthetics of the products, services or technologies being purchased and not on their reason for being …FUNCTION.
Since our studies have documented that price savings generate less than 1% savings annually, why do we continue to focus on price, when You Are Looking For Breakthrough Savings In Value Analysis You Need To Make 3 Big Leaps Forward
“Traditional Cross-Functional Value Teams Bring About Average Or Insignificant Savings, Whereas, Non-Traditional Value Teams Generate Breakthrough Savings”
A recent study by Lee Fleming, Associate Professor of Business Administration at Harvard Business School, confirms that breakthrough savings are more apt to be generated by value teams when their membership is more heterogonous than homogeneous in its make-up.
In fact, Lee’s findings show further that as the “distance between the team members’ field or disciplines increase (within rational boundaries)”, so did the teams’ breakthrough performance. As a comparison, the performance of traditional cross-functional teams was rated as average or insignificant in the studies Lee Fleming conducted.
The lesson to be learned here is that if you are looking for breakthrough savings in value analysis you need to make three big leaps forward in your program’s organizational structure, not just tweak it a little
How To Make The Three Big Leaps Forward
First of all, if you still have a savings organizational structure that includes a Products Evaluation Committee or Value Analysis Committee at your hospital you need to rethink the efficacy of these savings architectures, because they won’t give you the breakthrough performance you have been looking for in your value analysis program.
In fact, the jury has rendered its verdict on these times worn organizational structures: They are tired and outdated vehicles for making savings happen in the 21st century, and should be abandoned with great dispatch!
Now, that I have identified what you shouldn’t be doing for breakthrough performance, let’s look at what you need to do to make the big leaps forward with your value analysis program:
1. Teaming Up For Success
Value analysis is a game of inches and is best played by teams consisting of your best department heads and managers (with the right competencies) who have been trained and coached with guided practice, observation, problem solving and experimentation through the value analysis methodology so they can expertly perform value studies for your hospital.
2. Diversity Encourages Change
Value teams consisting exclusively of your clinical staff won’t give you the diversity or multiplicity of opinions and experience to generate breakthrough performance of your value teams. Only cross-pollination value teams can make this happen!
3. Deep Rather Than Broad Experience
Lee tells us that your most successful value team members will be the ones who have deep rather than broad experience in their disciplines. As an example, your endostomal therapist has deep experience in their discipline, whereas, your laboratory manager has broad experience in the laboratory sciences.
This deep vs. broad experience enables your endostomal therapist to relate to other disciplines symbiotically. On the other hand, your laboratory manager is a generalist and can’t see all of the nuances of other disciplines as easily as your endostomal therapist.
These three success factors for breakthrough performance in value analysis should only be the starting point on your journey to reinvent your value analysis organizational structure, but they will bring you a long way to mastering this discipline if you are serious about perfecting your value analysis program.
Maximizing Your Chances Of Success
If you want to maximize your chances of success in value analysis you need to move away from Product Evaluation and Value Analysis Committee’s organizational structures and start teaming for success. The best way to do so is to embrace diversity in your teams, while striving to align your team memberships with a wide range of disciplines that will bring about breakthrough savings and innovation as a performance norm as opposed to an exception.
The “study of function” is the direction you need to go in order to create 26% savings annually.
As these five reasons reveal, being traditional and conventional with your value analysis program isn’t going to spawn double digit savings for your healthcare organization. Only by employing non-traditional and unconventional methods and practices can you obtain this type of superior performance.
