OC Reilly Blog: Sales Reps – An Endangered Species?

By Bill O’Connor, President and CEO, OC Reilly Inc.

(May 3, 2016)–“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

When Charles Darwin introduced his “theory of evolution” to the world, it set off a firestorm of debate that continues today. But, even so, it’s hard to argue with this particular quote.

They say the only thing that doesn’t change is change itself, and there has been plenty of that in the U.S. healthcare industry over the past few years. As such, roles and assumptions have been challenged. But have they responded to all of the change happening around them? 

Management of products, as well as their utilization, are primary components in successfully executing solid sourcing strategies. Education, communication and buy-in are essential prerequisites to a strong sourcing effort.

Consider this excerpt from “What If Value Analysis Led the Sourcing Process and Not the Other Way Around,” an article appearing in the March/April 2016 issue of Supply Chain Strategies & Solutions magazine:

“The majority of supply chain’s cost savings strategies revolve around contracts and price…however, there are no guarantees for quality improvements or total cost reductions. Providers and suppliers should align their contracts and relationships with a win-win scenario in mind. Equipped with the right data and mutually beneficial contracts, each party should be able to commit the resources needed to help drive savings based on CQO (Cost, Quality Outcomes) initiatives.

“Once transparency and trust exist, it opens the possibilities of exploring creative contracting solutions that include shared risk, guarantees, or capitated contracting strategies. In an ideal scenario, after the contract is complete, the sales rep is switched out for a client utilization manager. Annual or quarterly business reviews are switched to monthly product utilization management meetings.”

It comes down to a simple thought: Instead of buying the cheapest, buy the best quality at the lowest price, and only buy what you need. Hardly a revolutionary idea, but in healthcare it has become an evolutionary one. It represents a change in approach and – in harmony with this article – sales reps may be as prevalent as Betamax players in the future.

For those most responsive to change are the ones who will survive.