Thursday 23rd May 2019 - Logistics & Supply Chain

Tricky operations

Getting closer to the customer is the goal of most organisations and this is particularly true for manufacturers of implantable medical devices. Although there is considerable product innovation to provide better clinical results, the supply chain is often not fully considered, resulting in a proliferation of inventory.

There is extensive use of next-day and same-day courier services to ensure supply or where new products are restricted because of the supply chain.

Typically in a hospital, stock is owned by the clinic or the manufacturer, which can cause confusion for supply, usage and returns.

That”s why hospitals and medical device manufacturers are increasingly employing strategies to manage stock. These perform activities such as:

On-site audits, whereby teams perform stock counts to ensure levels are maintained correctly, balance stock and usage and make modifications to stock levels.

On-site materials management, which extends the auditing function to include full materials management. In terms of cost, a multi-manufacturer process is optimal. Typically, pilots are conducted to identify base data across a number of departments and to track usage at operating theatre level. This allows the identification of so-called prevention against run-out levels, and the data can be used to verify stock levels based on usage, even with short-term changes in use

So-called ”rotating kits” activity, which is targeted at low usage items – for example, in specialist areas where there may only be two procedures per week. Kits can include implants, instruments and consumables and they are packed in flight cases to ensure product integrity and quality and delivered to theatres or wards. These cases are arranged to allow for easy selection, checking and replenishment. Billing is based on items used or damaged. This process allows the good utilisation of kits but decontamination extends lead times considerably, meaning that without optimisation the kits may be used only once a month.

The benefits of these approaches include reducing storage space and clinical staff time spent on inventory control. There is also a reduction in inventory and hence the capital tied up in stock, plus a reduction in stock loss due to expiry, damage or misplacement.

The financial benefits can be considerable, with hospitals typically holding eight to12 weeks” usage in stock and manufacturers holding 50 to150 days on hand as consignment stock as well as their country and regional distribution centre stock.

The future will see the implementation of these techniques but could also include techniques such as holding consignment stock in off-site locations for multiple hospitals, thus combining consignment and safety stocks and avoiding duplication. Deliveries could be developed to meet operating schedules, making this particularly applicable to elective surgery.

Jonathan Blamey is vice president of product development at DHL Exel Supply Chain

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