Back to Basics – Forward to Big Savings

By Robert W. Yokl, Sr. VP, Operations — SVAH Solutions

As the major league baseball season has just wrapped up their Spring Training and started their season, this is a good reminder for Value Analysis and Supply Chain Professionals to take a step back to basics in order to move on to big savings. If you look at all major sports, they have a preseason “Training Camp” built into their preparations for the new season. In Supply Chain and Value Analysis, there are no offseason programs or training camp where we can get back to basics with added coaching and special instructors; we are on our own. That does not mean that you cannot go back to basics to reap huge benefits for yourself and the value analysis and supply chain teams you work with.

Covid-19 is the Major Paradigm Shift Right Now in Supply Chain, So How Can Basics Help?

Yes, I realize that we are in challenging times due to the continued fallout of 2020 with all the revenue, PPE, and other sourcing obstacles that are still ongoing today. We should not fail to realize that by going back to basics, we can overcome these major obstacles related to Covid-19 by using proper value analysis strategies and techniques. Remember, value analysis was born in the mid 1940s at General Electric where resources were scarce or not available at all with many cost and quality issues occurring on GE’s production lines. Sound familiar?

The Value Analysis Functional Approach is the Best Back to Basics Approach You Can Apply in Tough Times

Just the other day, I demonstrated a value analysis solution to a prospective customer and they started out by listing the functional requirements that they needed the software to do for them. Not only that, but they also listed the two most important elements that our software must perform. This was music to my ears, and I know they were evaluating our solution in the most effective value analysis manner. Normally, when we perform demonstrations, we try to ask what requirement or end results are expected from the software, but about 80% of the time, prospective customers do not know or are just looking for new shiny elements to add to their value analysis program.

The functional approach applies to all products, services, and technologies and is the most basic tenet of value analysis today. However, functional requirements are often forgotten and replaced with wants and wishes which could end up costing you lots of money or result in failing products, services, and technologies. The functional approach starts with identifying the Primary Function (a product should only have one), Secondary Functions (what else does this do), and Features (can be added on or taken off the product) of a product, service, or technology.

In the software example above, if our software did not meet a critical primary or secondary function that was required, then this customer should have stopped the demonstration mid-stream. Why bother moving forward when the main requirement of a value analysis solution is not being met? With the personal protective equipment and ongoing new product requests, this back to basics value analysis approach can help normalize the craziness and set you back on pace to big savings without missing a beat in how you do business.

About Robert W. Yokl, Sr. VP of Value Analysis & Supply Chain Solutions
Robert is the Program Leader for SVAH Solutions that provides value analysis, clinical supply utilization, and savings validation tools to help organizations to gain the next level of savings beyond price and standardization.