VALUE ANALYSIS 101

One of the Most Powerful Tools for Value Analysis is Strategic Planning

Robert T. Yokl, President/CEO, SVAH Solutions

“Nothing is more terrible than activity without insight.” This quote by Scottish Philosopher, Thomas Carlyle, is at the core of why you need to develop and then revisit your Strategic Value Analysis Plan (SVAP) before you establish, reinvent, or set a new direction for your value analysis program. It is one of the key ingredients that holds your value analysis program together, year after year, and decade after decade. Think of the SVAP as Gorilla Glue!

Benefits of Strategic Value Analysis Plan

We often talk to value analysis leaders that are looking to establish, reinvent, or set a new direction for their value analysis program, since their VA program has gotten stale, is dysfunctional, or is not meeting their stated goals and objectives. This is when we ask the VA leader if he/she has an updated Strategic Value Analysis Plan.

Value Analysis 101

Robert T. Yokl

Most often, they tell us they don’t, which is a clue for us as to why this hospital, system, or IDN is having growing pains. They hadn’t taken a long-term, systematic view of their value analysis program, and then revisited their SVAP annually, or as needed, to keep their VA team(s) well oiled, on a critical path, and operating at peak performance.

An SVAP has many similarities to long-range planning in that it is a systematic and defined planning process. This enables a healthcare organization to appraise the strengths and weaknesses or GAPS in its value analysis program, then, devise new strategies, tactics, and techniques for reducing and controlling supply chain expenses going forward.

If properly developed, your SVAP will provide supply chain/value analysis leaders with a road map for their value analysis program for many years to come, thereby, increasing its probability for success. This is a better course of action than letting your value analysis program just happen in an unplanned and disorganized manner.

It All Begins with a SWOT Analysis

Your Strategic Value Analysis Plan begins with defining your vision, mission, and goals and objectives for your new or refined value analysis program in terms of what your aspirations, aims, or mandates are one, two, and five years out. It shows savings and quality goals are real and achievable and what policies and procedures are required to align your goals and objectives with your new or reinvented product, service, and technology evaluation/selection process. It reveals what steps you need to take to develop or reinvigorate your value analysis teams that will be creative enough to meet the challenges of your hospital, system, or IDN over the next few years. It helps find the problems or hurdles that can be anticipated that would threaten the success of your value analysis program and where you would get started to make change happen.

Don’t Make a Move Without a Strategic Value Analysis Plan

All of us prefer to act first as opposed to planning first, but as the quote I just talked about says, “Nothing is more terrible than activity without planning,” because action without planning leaves out critical steps that can spell success or failure of your value analysis program. I know this to be true because even with an SVAP that I developed for a hospital, system, or IDN client, I would often need to revisit the SVAP once we took action because I forgot a key success element of the plan (i.e., meeting with key influencers to discuss the SVAP before announcing it to all who are involved in the new or reinvented value analysis program). This occurrence rarely happens now, since I don’t make a move to change a VA program without a properly developed and bought into Strategic Value Analysis Plan. You can have the same SVAP success too!

Why Is the Right Value Analysis Tool Important?

Robert T. Yokl

When I formed my first value analysis team decades ago, there were no value analysis tools available, not even an electronic spreadsheet. Everything we used to manage our VA program (agendas, minutes, value analysis requests, project management, etc.) were all manual systems. Did my VA team save money, improve quality, and provide safe products, services, and technologies to our end-users without the right tools?

The answer is yes, but we didn’t know what we didn’t know at the time.

Fast forward a few years (circa mid to late 1990’s), and we developed software that did all the time consuming manual value analysis work I just talked about in addition to providing online access to all a healthcare organization’s purchases, by commodity group, for a one-year period. The benefit of this system was that VA team members could slice and dice their hospital, system, or IDN’s purchasing data searching (e.g., perform a ABC Analysis) for savings opportunities without once talking to their materials management department, which was always time consuming to do so.

We later developed a value analysis tool to identify (i.e., value analysis analytics) the best value analysis savings candidates for value analysis teams to study. Thereby, eliminating dry holes that were associated with prior value analysis savings tools we created. Now, a value analysis team had a 96% chance of saving money on each value analysis project they decided to undertake without needless time searching for savings opportunities. All the savings VA teams need now can be gotten with three clicks of their mouse.

Today, we have value analysis tools that do all the above while they can also map a team’s value analysis savings opportunities right back to a procedure, surgeon, or department. This again, saves time and effort for overworked value analysis team members.

Why is the right value analysis tool important?

Because time, money, and resources are scarce in any hospital, system, or IDN today, you therefore need to have the latest value analysis productivity tools that can do the heavy lifting for you. Otherwise, you will never get all of your value analysis jobs done that need to get done on time, efficiently, and in an expedient manner.

Robert T. Yokl

President/CEO, SVAH Solutions