“There are more opportunities to optimize costs and quality without jeopardizing outcomes with a customization process, and value analysis methods and strategies are the perfect fit to make this happen.”Â
Let’s face it, the name of the game when it comes to contracting and gaining the best price is standardization whenever and wherever possible. This makes sense because as you consolidate your vendor volume you can gain better economies of scale and garner a better price or higher level or two on your group purchasing contract. There is nothing wrong with this strategy but sometimes the context of standardization gets taken a bit further than it needs to and could work against your savings goals altogether.
I am a believer in the standardization process but there comes a point where you need to start thinking about customization versus standardization. There are more opportunities to optimize costs and quality without jeopardizing outcomes with a customization process, and value analysis methods and strategies are the perfect fit to make this happen.
Be Careful Not to Take Standardization Too Far
I have seen countless times when health systems have taken standardization beyond the level that they needed to by standardizing further within a particular product category which does make replenishment a bit easier but may also increase costs. If you standardize within a product category that has multitudes of options, then you likely have major areas for cost optimization because one size rarely fits all. Case in point, if you standardize on a higher-end IV set tubing throughout your organization with all the features that will meet ICU functionality, what happens?
Not every area of your hospital needs the ICU critical care level features in the IV set tubing you standardized to, thus wasting those features when there are lower cost alternatives available in your contracted vendor’s product line. Do you need a high-end critical care IV set tubing for a 1-hour outpatient surgery case? No. Do you need a high-end blood collection system for a simple blood draw in your lab? No. The list will be endless when you adopt this mindset.
Your value analysis approach to this should be to match the product features and functions to what is truly required for each surgery case or clinical department.
Meeting Customer Requirements Exactly
Remember, value analysis is the study of function of the products and services that we purchase which leads to the search for lower cost alternatives with equal or better quality/reliability. This is the best way to further customize within your vendor’s product lines inside your contract and meet your customers’ exact functional requirements. Functional requirements of your customers are real specifications that you can use to improve your sourcing within your existing contracts to gain the next level of optimization.
Customize to Optimize!
The name of the game is further optimizing costs and quality while maintaining or improving the quality of care for our patients/customers. The best way to handle this is not to make wholesale changes but instead work towards small and incremental improvements using the value analysis functional approach that will lead to success after success after success. If you are looking for more standardization, then I would suggest that you further standardize the value analysis methods and practices to gain the next level of savings beyond price.
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