Five CEO cost-cutting tips to ease vendor management

Five CEO cost-cutting tips to ease vendor management

November 24, 2014
Michael Detarando
From the November 2014 issue of HealthCare Business News magazine

By Michael Detarando

There’s no cure (yet) for reducing the time it takes for hospitals, pharmaceutical companies and medical equipment makers to bring innovative ideas to market. Health care CEOs struggle with how to quickly and cost-effectively drive change, while successfully managing multiple relationships before the innovation in production becomes obsolete. Five key considerations to ease vendor management will improve collaboration for teams on all sides of the gurney.

1. Document Innovation

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Recognize the genius in a new product, drug, technology or process, and require that the innovator clearly articulate every aspect. This educational blueprint lives on, crediting the mind behind it, while extracting pertinent information for the development and production engines to move forward. In addition, it enables the CEO to translate the vision into a discrete set of measurable actions that align with corporate, market and consumer goals and objectives. Cohesion and clarity throughout the process is imperative for the innovation to come to fruition.

2. Choose a Champion
As CEO, managing the nitty gritty is going to be impossible. Rather than gate keep, delegate vendor management to an individual with high potential that understands the intricacies of the market, innovation and development/production processes. Make it clear that the Champion serves as catalyst and manager, nurturing and facilitating vendor relationships instead of doing everything themselves. The Champion must harness the capabilities of all parties involved and keep them focused toward shared results. Reserve time in your schedule to meet regularly with the Champion (and be sure to remain a visible entity for the rest of the team, too).

3. Over-communicate
Outline the responsibilities of each piece of the go-to-market puzzle (innovator, in-house team, champion, equipment maker, supplier, sales, end user, etc.) and hold them to task. Build in achievements for milestones and consequences for missed deadlines. Strong performers respond best when expectations are clear and they know exactly what it means to not only exceed your expectations, but those of the customer. Ensure each schedules time for regular meetings via phone or otherwise, which will keep programs on task and manage potentially evolving expectations from all ends of the spectrum.

4. Pinch, don’t Grinch
Saving pennies in production with shortsighted cost-cutting initiatives will cost big bucks in fixes, quality of care and reputation later. Fact: the cost of quality grows exponentially within each phase of the supply chain. Expect vendors/customers to always look for ways to lower costs, but never at the expense of quality, thereby increasing risk. It takes ten great cost saving success stories to make up for one well-intentioned initiative that goes badly. Therefore, advise your CFO throughout the budgeting process to consider short- and long-term implications of every decision that could impact the customer/end-user.

5. Find your fit
It is well worth the time and money to select a vendor that shares your vision and commitment to successful development as well as production. Seek out partners with specific expertise and a strong track record of collaborating in a manner compatible with yours. CEOs who demand vendors with conflicting cultures to change, in order to align with their company’s culture set unrealistic expectations for everyone involved. Embrace who and what you and your vendor options are (and are not) and invest in the people already where you need them to be.

About the author: Michael Detarando is President/CEO of Incom, the world’s largest supplier of fused fiber optic solutions that enable innovation in medical, scientific, display and defense. Detarando drives Incom’s strategy to combine progressive glass/ polymer microstructure components with unparalleled expertise. His lifelong tenure is fueled by a commitment to empower innovators with technology that brings their brilliance to light.

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