Transforming Diagnostic Services: H&Z's Strategy Boosts €10M in Value Creation

Client Challenge 

The client, a reputable private equity-backed diagnostic services provider, operates laboratories and medical centers throughout Europe. Before partnering with H&Z, the company encountered several challenges. They identified the necessity to pursue cost reduction, refocus on structured savings tracking, and re-emphasize strategic procurement efforts that had been overshadowed by operational priorities. These issues were exacerbated by processes needing refinement and opportunities for clarifying roles and governance.

H&Z Approach 

At first glance, management consultancy firms and laboratory diagnostics services might seem worlds apart - one negotiates the complexities of business, while the other navigates the intricacies of health.  Yet, at their core, both are united by a fundamental process: to identify problems and find solutions. Following this philosophy and with purposeful guidance from H&Z, the client embarked on a coordinated journey to define future development and success.

The plan involved creating a Strategic Sourcing Framework for Non-Diagnostic Spend and detailed evaluations of contracts, expenses, and supplier partnerships.  There were multiple interviews with stakeholders, cross-functional workshops, and the execution of a comprehensive Value Creation Plan.  This framework resulted in various measures, targeting a range of operations, such as Energy, Facility Management, HR, IT, Marketing, Fleet, Logistics, and Travel.

Results 

Through more than 40 initiatives, H&Z achieved an impactful value creation of approximately €8M, with lasting benefits.  Positives included a unified attitude toward savings with new systems implemented, significant cost avoidance, reduction in extraordinary expenses, enhanced cash flow, and favourable Environmental, Social, and Governance effects. Further success was found in a competitive marketing print RFP that secured a remarkable 48% price reduction through strategic volume bundling and market comparison.

Key to the strategy was unifying the approach to savings, incorporating a detailed guideline harmonised with the Controlling department. To ensure the realisation of savings, a new tracking process was established. These enhancements led to improved cost control, a new method for monitoring progress, and the ability to keep projects on track while making necessary adjustments.

And what of those compounding factors that impinged upon successful processes?  Key improvements were made to company structure by installing streamlined procedures, ensuring clear governance, and defining job roles. This strategic clarity not only accelerates execution but also optimises communication and process efficiency, directly impacting the bottom line and driving sustainable growth.

For a respected diagnostics service provider, this reflective process is not just about introspection but also about maintaining a perspective of continuous improvement.