It is too easy to get caught up in the gut feel scenario of anything in your organization’s supply chain operations as to where you stand with costs, functions, and results. Gut feel is great and can lead you one way or another, but it has no reporting or provable results to show. The better strategy is to take our gut feelings which you trust but then can verify. It sounds simple, but we often get so caught up in the day-to-day operations of supply chain and value analysis that we tend to not have reporting in place that can validate the end results we are looking for.
Accountability Then and Now…A Lot Has Changed
Years ago, when we first started benchmarking and clinical supply utilization reporting for our clients, we ran into many leaders who felt that they did not want to go to that level of detail which inevitably meant more accountability. That was then. Now, those same leaders are starting to see that it makes sense to be ahead of the curve and look at their supply chains from a 360-degree view as to not get caught off guard by anything happening in their purview.
Below are the top methods I use to help clients validate the key outcomes in their supply chain — approaches I strongly recommend putting in place. These are in no particular order but are all very valuable strategies.
1. Automate All Your Results – Stop with the spreadsheets and work with data in database driven reporting systems that are web based and customizable to your organization’s unique validation and verification requirements. You might be a top-tier spreadsheet expert, but spreadsheets have limitations — they’re prone to data constraints and potential corruption. In contrast, databases offer greater reliability, scalability, and are typically backed up regularly, reducing the risk of data loss. Remember, databases are not some new fangle type of reporting – they have been around longer than spreadsheets have so it makes sense to have solid database reporting and automate all the outcomes.
Yes, I highly recommend that you do use a spreadsheet to build your original data model and calculations for your reporting but then have it programmed into a database ASAP.
2. Punch Holes in Your Own Supply Chain – Take a step back and look at where you have reporting holes that leak dollars or have quality issues that would be detrimental for you to not know about. One example is with benchmarking and tracking utilization and consumption of supplies as related to costs and quality. Many organizations have benchmark pricing and track spending but that does not always tell the whole picture of the consumption and utilization of your major and minor supply categories. You will need to marry these up to your patient volume centric statistics on an ongoing basis to get a true feel of the ebb and flow of your consumption and utilization levels.
3. Know What Categories are Best Practice – Adding to #2 is that it is important to know how well you are performing with consumption and utilization benchmarking and tracking. This will help to uncover waste, inefficient use, feature-rich products, and even quality issues with products. The big plus here is that it will also tell you where you are doing really well. I often come upon professionals who are trying to squeeze more out of a product category when they are already operating at cohort and sometimes even national best practice level. It is powerful knowing when to move on to something else – this saves so much time and effort.
4. Start to Get Your Department Heads and Managers More Involved – Let’s face it, department heads and managers are the budget holders and main users of the products, services, and technologies that are purchased through supply chain. No changes are made unless they are involved in the process and thus they should also be involved with your accountability and validation practices. Getting them involved sooner rather than later is recommended as they will be affected by anything and everything that you find out about cost increases related to consumption, waste, inefficient use, etc. Getting them more involved now gets them educated in your new “Trust but Verify” best practices and helps them understand that this is going to be the new normal going forward. Gone are the days of excuses like, “We were just busier this month or that.” Instead, they will have to work with you to flush out cost increases and celebrate reductions!
Trust but Verify is the Best Way to Go!
If you build in validation systems or reporting into your existing supply chain and value analysis operations, then it simply makes the process so much easier because your results should be mostly automated. When you find out how much good data and results reporting you will have as well as accountability for every cost beyond price, you will come to realize that it is worth the effort to set this up. There are still big savings out there for you to uncover but we must be smarter about this. Taking a trust but verify approach is the best way to go about this in the short and long term.
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