After working with value analysis committees and teams for over 30 years, we have observed three challenges everyone has and have developed strategies of how to solve them. The following list those challenges and how we have devised strategies to solve them:
Value Analysis Challenges and How to Solve Them
1. Not Enough Time: No value analysis practitioner has enough time to evaluate new and renewal contracts, manage new product failures, vet new product, service, and technology requests, manage recalls, etc., they receive in their inbox. The solution to this dilemma is to share these responsibilities with your team members as project managers. Have them manage each task as a project and report back to the value analysis coordinator, manager, or director on their findings on the project. For instance, if you have a new product request for a new catheter, your project manager would meet with the customer, stakeholders, and experts to value justify incurring a new expense. Then, report their findings at your next value analysis meeting.
Keep in mind that your non-biased subject matter experts (SMEs) would need to be part of the new product evaluation in the first place, and they are already part of the team or have a strong relationship with the SMEs that will need to be engaged as part of the value analysis process. Why not just take the team model a small step further and ask the team member to facilitate the value analysis project?
2. Not Enough Resources: One technique to increase your resources that we recommend is to set a dollar amount threshold (e.g., a purchase exceeding $25,000 annual spend) that value analysis will be involved in the evaluation of a new product, service, or technology. Any amount below this level would be vetted by the appropriate supply chain contract manager along with the requester’s budget owner. The rationale behind this policy is that, in our experience, very little savings would be achieved with such a small expenditure by a value analysis team yet could chew up a whole lot of time and effort for just a $2,300 new product request.
3. Not Enough Management Support: We have seen hundreds of savings ideas fail to be implemented because a value analysis team doesn’t have the influence necessary to make a change. That’s why we recommend that an administrative representative (i.e., CFO, COO, VP) be a member of your value analysis team. Their job is to help to vet your new product, service, and technology requests and challenge your department heads and managers’ assumptions.
For instance, we see many hospitals utilizing feature rich PICC lines that aren’t medically/functionally necessary, but their customers insist they are needed even though the evidence shows the direct opposite. This is where your administrative representative can challenge the department head or manager to justify their “opinion” with evidence. Most find that the feature rich PICC lines only need to be utilized 5% to 10% of the time and not on all patients. Thus, the customer has to justify their exact use. This management support in the value analysis process calling for evidence to justify use of a particular product allows the VA team to assess all areas.
Value Analysis Peak Performance
Value analysis is a very powerful tool to value justify new purchases, establish specifications for your new product, service, and technology requests, and conduct retrospective studies on the effectiveness of your purchasing decisions. However, unless you have the time, resources, or management support, your VA team can’t be at peak performance. So, remember these strategies the next time you feel overwhelmed with work that seems to be never ending!
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