Value Analysis Analytics
Breakthrough Savings on Demand
The promise of value analysis analytics to up your savings game
Your healthcare organization is data-rich, but most supply chain professionals don’t optimize the use of their hospital, system or IDN’s data to pinpoint, with certainty, where their best value analysis savings opportunities reside. Historically, supply chain management hasn’t been interested in value analysis analytics, since their price and standardization savings have been so robust over the years.
So, they haven’t had the need to analyze their savings beyond price and standardization. Technology investment has lagged behind at most supply chain operations, so the tools to analyze data have been missing.
The Law of Diminishing Returns
Yet, we don’t believe there is a supply chain manager in the country today who can say that their price and standardization savings is even keeping pace with inflation. The law of diminishing returns has finally arrived in supply chain circles, where even with gargantuan efforts your hospital, system or IDN will be unable to increase your savings yield beyond a certain point. These are just the hard facts we must accept as reality in today’s healthcare supply chain environment. Do not be discouraged by this information, there is a whole new world of supply expense savings available to your hospital, system or IDN. That is the promise of value analysis analytics to up your value analysis game: The tool of choice to identify your best value analysis savings opportunities. .
Value analysis professionals can use value analysis analytics in many ways to improve their study outcomes (cost and quality), uncover supply chain inefficiencies, and improve your healthcare organization’s bottom line. More importantly, they can have a steady stream of new savings opportunities for their value analysis team(s) to tackle, instead of running out of steam for the lack of new projects.
However, these feats of legerdemain can’t be accomplished without a digital data warehouse. This is because material management information systems are transactional in nature and aren’t built to analyze the millions of bits of data that flow through your supply chain department and financials annually. On the other hand, value analysis analytics software can sift, sort and extract from your purchasing and financial data unfavorable trends, utilization misalignments and anomalies in your supply streams.
Yet, software alone isn’t enough for you to take full advantage of the power of value analysis analytics. You will need to change your organizational mindset from a price orientation to utilization awareness to receive the full benefits of this breakthrough savings on demand concept.
Value Analysis Analytics
Thomas H. Davenport, the author of Competing on Analytics, describes (value analysis) analytics as “the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decision and actions.”
What Davenport is saying, in layman’s terms, is that if you organize your supply spend into standardized descriptive categories (e.g. intravascular sets, dressing, office supplies, oxisensors, transcription services, etc.) and then measure these same products, services and technologies’ activity-based performance against your own historical standards or that of your peers, your savings opportunities beyond price will quickly materialize before your very eyes.