There are many reasons why you would benefit from developing your own benchmarking/key performance indicator system, but also from going a step further and developing benchmarking partners in order to find the best practices. Remember, benchmarking is not just comparing one organization to another, but also finding the best practice for the category, product, process, or service. Then, you want to model the best practice organization(s) for the definitive goal of becoming a best practice yourself.
How do you become the best practice or know whether you are already the best practice or close to becoming the best practice? First, you must have your own benchmarking system. In the supply chain world, it makes sense for it to reside in your department and you should focus it on your supply chain organization’s goals.
It is very impressive when you walk into a supply chain leader’s office and see benchmarks/KPIs on white boards with everything from turn rates to stock outs to net revenue to supply costs and so much more. More importantly, they don’t stop there. They still engage with SVAH to further benchmark and report out on things that they want to keep track of beyond the norm which is utilization, waste, inefficient use, and feature-rich products.
Advantages to Developing Benchmarking Partners
1. Apples to Apples Alignment – Once you have your benchmarking system in place, you need to develop partners who will work with you to align their categories, products, services, and processes and congruently report results in equal time frames and methods. Then and only then will you get the optimal apples to apples comparative proof that the numbers are real and there is nothing more perfect to have than that. This will make it so much easier for you and your partners to pinpoint where you stand on every benchmark/key performance indicator and category you report on.
2. Real Communication – Benchmarking is more of an art and science that is very much data driven but you need context to the benchmarks as to the who, what, where, when, and why that will come with your best practice partners in the quest for being the best practice. To attain this, you must have a continual dialogue with your partners and be open and honest about how you are doing business and the products, services, and processes you employ. I suggest monthly meetings with your benchmark partners to discuss current, past, and future benchmarks you want to track. When you make it part of your normal way of doing business with a one-hour monthly meeting it becomes a powerful tool versus just being another thing you have to do.
3. Proof is Real – There is no better proof than a hospital or health system that is performing at best practice levels in any given category, product, service, or process. Having your own data and measures is great but then finding other like-sized organizations with similar operating characteristics makes the proof crystal clear in the results they are getting. Plus, you get to find out all the ins and outs of how they are optimized to be the best practice. Does it get any better than this?
Benchmarking for Savings Beyond Price
Most organizations know where they stand when they benchmark things like price and standardization levels because their group purchasing organizations tell them. This is great but price and spend benchmarking is always going to take place and let’s face it, that is not the optimal method of benchmarking to find a whole new level of savings. The next new level is savings beyond price which will further optimize the products and services you contract for but then also optimize how much you consume or waste these products/services. The goal is to have the best product/service life cycle costs fully optimized, making sure you get the most value out of every dollar you spend, and that is what benchmarking with your partners will enable you to do.
Get your benchmarking system in place with solid key performance indicators married to operating statistics and then seek out your partners to share your data with. Not just one partner but 6, 10, or even 15 partners is best. Some of these organizations may be within your health system and some may not be, but that is okay as long as your goals and objectives are all aligned. Take the next step today, you won’t regret it one bit!
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