It’s Time to Get Your Benchmarking Program Going!
If you are looking for the next level of big savings beyond contract price due to market conditions and a whole lot more, then this should help point you in the right direction. When our team engages with a hospital or health system, we don’t speculate on one savings opportunity and whether it is there or not there, we benchmark everything and then let the savings chips fall where they may. Simple, right?
7% to 15% More Savings Still Attainable Beyond Price
The multi-million dollar question every CFO is asking right now is, where are the big savings hiding at their healthcare organization when they see the supply and purchased services budgets continue to rise year after year? Even with savings from group purchasing, rebates, and strategic sourcing, it is not making up for the inflation, resilience, and revenue challenges. You need a better mousetrap for the elusive big savings.
Benchmarking is the Easy Button to the Next Level of Big Savings!
Enter benchmarking all your major and minor supply chain categories! This will tell you exactly what categories you need to address that have the biggest bang for the buck. Best of all, it tells you which categories you are at best practice levels in which you can leave alone and which ones you need to monitor in case they turn sideways in a hurry.
There are many ways to benchmark with your own historical, system cohort, as well as peer cohorts if you develop them or have a firm like SVAH provide them to you. Either way, these benchmarks will shine a light on the areas that you need to address and then as supply chain and value analysis leaders you can decide which is the best way to go about achieving these savings.
Benchmarking Gives You Confidence
Benchmarking will also give you confidence that you are not just pulling some crazy saving opportunity out of a hat and asking your supply/value teams to go after these without really knowing if they are real. Benchmarking, especially with multiple key performance indicators, will help you triangulate the savings to ensure no time is wasted and the dollars are real. This applies before, during, and after the savings initiative as well so you can use benchmarking to assess your results.
Look at Categories in the Mirror
Lastly, it may be hard to see some major savings opportunities pop up as part of this whole benchmarking process, especially ones that you may have personally spent a lot of blood, sweat, and tears on previously. But if it is running too high and needs a bit more work, I know I would rather know than not know. Plus, it will tell you where you are doing very well and will save you and your team a lot of time not having to work on areas that are already in good shape. Time to get your benchmarking program going.
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