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Did You Know...?

That Value Analysis Was Developed Back In the 1940's After World War II as a Way to Find Lower Cost but Higher Quality Alternative products and methods. This was Due to the Lack of Material Resources At The End of The War.

Savings Beyond Price -Weekly eNewsletter - August 30, 2011

 

A Note from Robert T. Yokl,
President and Chief Value Strategist

As I write this e-newsletter on Sunday in Skippack, Pennsylvania we are at the tail end of hurricane Irene’s 75 mile-a-hour winds and rain.  Irene almost flooded my home office, but my wife and I fought the good fight about 2:00 A.M. in the morning on Saturday and jerry-rigged our down spouts in the back of our house to avert a minor disaster.  I hope everyone in the east coast fared as well as I did in this historic storm of the 21^st century.  My sympathy is with those who didn’t.  

So since I still have electricity (365,000 Pennsylvania’s don’t) I was able to tap out an article called “The Value Analysis Multiplier Effect” that I have been thinking about for some time to encourage my readers to utilize the “team approach” to value analysis since it can boost your productivity by 79%. 

I also had time during the storm, since there wasn’t much else to do to write a blog article on the topic of data warehouses (“If you don’t have a Data Warehouse you Lose”) to make you aware that just managing your MMIS or ERP transactional data won’t give you the savings performance you are looking for in the 21^st century.

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The Value Analysis Multiplier Effect

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One of the surprising observations that I have witnessed, for a number of years now, is that countless material managers and value analysis managers aren’t utilizing a “team approach” to value analysis, but instead these overworked supply chain professionals try to do all this hard work themselves.   

Consequently, by not delegating their VA responsibilities to value analysis teams, who have the time, knowledge and rapport with their clinicians to make savings happen, they are holding back millions of dollars of new savings that are ready to be harvested.  I call this progressive tactic THE VALUE ANALYSIS MULTIPLIER EFFECT: More people, more time, and more savings. 

When I’m teaching our Certified Value Analysis Train-The-Trainer course one of the topics that I cover is the “Value Analysis Manager Productivity Index”, which says that a material manager or value analysis manager’s time, effectiveness and efficiency can increase by a whopping 79% if he or she is utilizing the team approach to value analysis.  

If you think about it, this “multiplier” concept is really common sense, since there are only 2080 work hours in a year and as an individual you can only get so much VA work done in a day, week or month. My guess is only about 34 VA projects can be completed annually by an individual. Conversely, when you have one, two or even four value analysis team(s) with 10 VA project managers, I have seen value analysis managers’ close-out as many as 160 VA projects yearly.

One of the objections to this “multiplier” concept is that, “No one has time to be involved in value analysis teams, since there is just too much other important work to get done”. Well, my answer to this complaint is that if a healthcare organization does make time to save money, then it won’t matter what other important work they have to do, since bankruptcy will solve this problem – forever!  

I could cite numerous other benefits to the “team approach” to value analysis, but I believe the main justification for utilizing this technique is that it will enable you to save more money, in less time and with much better results.  It’s your choice, but I’m betting that some of my readers will decide to take this advice seriously and find a way to do so! 

Warmest Regards,

Robert T. Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
Bobpres@strategicva.com
1-800-220-4274

Your Partner In Savings Beyond Price™,

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