Let’s face it, Supply Chain and Value Analysis have got their plates full of contract management, inventory/procurement, recalls, resilience issues, and day-to-day activities. But your health system needs you to be a leader in tracking down and implementing the next level of savings to aid the bottom line, which is never ending but very important each year. There is not much room on your plate to add new savings initiatives – but that does not mean that you can’t venture into new areas that can help your organization. Whatever you venture into next has got to give the bang for the buck and take little of your time. A daunting task but not impossible.
Every Dollar Supply Chain and VA Saves Goes Right to the Bottom Line
The beauty of Supply Chain and Value Analysis savings is that they directly impact the bottom line. Unlike new revenue streams or efforts to recover lost reimbursements — which are important but often yield only pennies on the dollar after accounting for overhead — cost savings from supply chain initiatives don’t pass through the revenue gauntlet. Every dollar saved is a dollar earned. This makes a compelling case for CFOs and healthcare leaders to double down on supply cost reduction efforts.
Set Up Systems to Make Savings Come to You
You have probably heard me say this many times in previous articles and podcasts but it’s true – you will chew up a lot of time and resources trying to chase down major savings, and worse, may come up with a lot of dry holes. Instead, I recommend that you set up simple systems for the savings opportunities to come to you. This must be more than just your GPO’s standardization and tier enhancement program, which you should still recognize, but realize that is not where the major savings are anymore.
Where Are the Next Areas of Major Supply Optimization Savings?
Two areas that have been an ongoing treasure trove of savings beyond price for our clients are clinical supply utilization management (CSUM) and supply benchmarking by category. Once set up, these two areas will instantly tell you where you stand (in several different ways) that will allow you to strategically pick and choose the major areas that require further optimization that will net you major savings. In fact, once this is in place it may take you some time to work through the savings opportunities because there will be so many that you did not realize were there.
Next Level Savings Will Likely Have Nothing to Do with Price
Remember, most savings opportunities that you will find in CSUM and benchmarking will have nothing to do with price but instead will be about optimizing waste, inefficiencies, and gaining a higher life cycle value from the dollars you spend. But you need to know where your opportunities reside and how much dollar potential is there for you to attain. With that information in hand, you can then pick and choose how you want to address these areas within your Supply Chain and Value Analysis Program.
Optimization is About Systematically Weeding Out Each and Every Savings Opportunity
Supply chain savings is a numbers game, and in order to achieve next level savings you need to work through the savings projects in as little time as possible while attaining maximum savings. It sounds simple, but you need to have the right systems and tools in place to tell you where this next level of savings is residing. Take the time and put in place the systems you need to take your organization to new levels of savings beyond price and save you valuable time in the future.
Below are some similar articles that you may find interesting.
5 Savings Strategies to Prepare for the Next Big Non-Salary Expense Reduction Push
Simple Ways to Improve Your Healthcare Value Analysis Teams That are Priceless
Putting a Square Peg in a Round Hole with Clinical Supply Utilization Management (CSUM)