Covering Each Surgery is Good.
Accurate Par Management is Better.
Days of Inventory on Hand is Best.
Medical device implant inventory management is complex. The last-mile is so unique. You have sales reps, support, and ops teams trying to work together, but often using different tools, systems, and communication channels. Combine that with lack of true visibility, non real-time usage capture, and outdated par management methods, and you have a recipe for a broken system—today’s current reality for most medical device manufacturers.
Par Management is History
In theory, par management is great. Based on historical consumption patterns you can determine how much inventory should be consigned at each medical facility and use that data to attempt to maximize inventory allocation and reduce waste in the field.
Yet, due to a number of factors, this never works well. Because of the time-lag in consumption usage results and the fact that most hospitals do not send exact lot information, your data is slow and incomplete. Most tools used to manage par levels are barely adequate and don’t help predict the future. In traditional par management environments they are limited by the data they receive and the willingness of users to adopt the platform. Since the past does not predict the future, par management does not reflect current or future reality.
Additionally, the consignment, usage, and billing issues need to be coupled with rep trunk stock, other forward stocking locations, and maybe even loaner-pooled inventory. There are so many variables that traditional Par Management, ERPs, Excel Spreadsheets, and CRMs just can’t solve.
Looking Forward: Days on Hand
By layering-in future surgery schedules, predictive forecasts and statistics-driven historical models, you can effectively create new ways to allocate consigned inventory.
Days of Inventory on Hand (DOH) has been a metric applied successfully in many other industries, especially retail. Instead of a fixed par amount based on historical usage only, DOH is a real-time, self-adjusting metric that tells you what inventory you need at each location based on your specified time frame, not a predetermined level. Now, with the right application, you can embed real-time DOH metrics into your existing workflows making the metric more actionable than ever.
Due to the complexity of the implant medical device world, the lack of real-time data, and disconnected systems, DOH simply wasn’t a possibility before Movemedical.
The Future is Now
Calculating Days of Inventory on Hand can now be done in the medical device industry in a multitude of ways. The trick is to use accurate real-time data including (at a minimum) the surgery schedule for the next 2 weeks, historical billing information, and instantaneous current usage.
These are the core ingredients, the exact recipe will need to be adjusted based on the specific use-case along with the other types of inventory (trunk, loaner, owned, etc) that might get thrown into the mix. You can try multiple models and algorithms to find what actually reflects reality—as long as the right tools and data are in place.
DOH provides immediate and future predictions that can be acted upon right now. Because the data is actionable, the decisions become better and the self-adjusting inventory eventually allocates itself automatically. When these basics are in place, you can also begin to rebalance and better manage expiring inventory across multiple territories and regions to create a fully-optimized field inventory operation.
DOH also helps sales reps develop more confidence in their operational partners to help them serve their surgeons better—in turn, providing surgeons more confidence in their vendor’s ability to deliver.
Next Steps To Better Medical Device Consignment
Once you have the right data, then you can act on it.
- The first step to collecting the right data is to make sure the tool that sales, operations, and customer support use is the same unified tool.
- The second step is to make sure the tool is one that actually gets used. Adoption is the main key. Unlike a CRM which has a medical device industry average of less than 25% (*self-reported) or an ERP which will never be used by sales reps, the right tool is a native mobile app that sales reps use every day because they want to, because it helps them. The more sales reps use the software for their daily tasks, the more data you can use to help them.
- The third step is complete ERP integration. True integration does more than just share data, it does work, it drives automation. Automation reduces errors. Automation eliminates busywork. Automation enables better decisions. Automation creates room to innovate. Automation produces optimization.
You need both adoption and automation to effectively apply DOH to your inventory management process. User Adoption gives you the right real-time data. Automation allows that data to be applied properly and effectively.
DOH is more relevant, more accurate, and reduces inventory waste. Days on Hand Inventory Management is now possible for the implant medical device last-mile field inventory sales and operations teams.
Optimize Your Inventory – Connect With Us
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