It’s 3 am. Do you know where your field inventory is? For many medical device manufacturers, the answer is…not always.
If field inventory visibility is a challenge, you’re not alone. The orthopedic medical device industry has billions of dollars’ worth of inventory out in the field. According to our internal data, OEMs have as much as 70% of their inventory in the field at any one time, and inventory patterns suggest that the median number of days in inventory is 137 (with a high end of 400).
Without accurate field inventory visibility, OEMs don’t know what they have, how much they have, where it is, and whether it’s being used or sitting on the shelf. And that situation results in bloated spending—of up to three to seven times the amount of money that should be spent on that capital expenditure. It can also be a red flag for financial auditors and investors, though that’s a topic for another day.
Field inventory visibility is a big problem—but it’s a solvable one, with the right system and approach. Solving field inventory visibility brings the outside in; or, said another way, connects what’s going on in the field all the way from the rep to your operations team. Not only does this enable a more streamlined way of working, but there’s also a business case. When you can track what you have, where it is, and if it’s being used, your inventory loss and waste percentage drops, and your ROI increases.
Let’s look at what’s necessary to solve your field inventory visibility challenges, once and for all—and how to do it.
The big challenge in field inventory visibility
To address field inventory visibility, it’s essential to name the elephant in the room: manual and disconnected systems. For many medical device OEMs and distributors, a longstanding reliance on manual systems works against field inventory visibility. Tracking an implant or set from the manufacturing facility through the distribution hub and into the field requires manual effort.
This approach might work with limited inventory, but for most OEMs and distributors, it cannot possibly work at scale. Moreover, there is no way a manual system can be efficiently updated to provide real-time insight into where products are and how they are being used.
Transforming field inventory visibility requires a different approach, one that enables a digitally connected supply chain from manufacturing all the way to field rep. With this real-time inventory visibility, everything changes.
Unlocking the advantages of improved field inventory visibility
Improved field inventory visibility enables you to do the most with what you have.
Inventory location. When you know inventory location, movement point to point, and utilization, you’ll know where inventory is. You’ll be able to see that the kit made it off the truck, or that the implant is on consignment at X hospital (and that it’s been there 30 days). With the right platform, you can see it all at any time: field inventory, warehouse inventory, incoming returns, pending requests, approved requests awaiting fulfillment, items on backorder, and items in need of procurement. This level of inventory visibility enables you to do more accurate forecasting and demand planning to better match demand with supply in a way that optimizes working capital. It becomes easier to channel your assets effectively toward strategic priorities, because your staff isn’t chasing their tail over inventory all the time. Instead, they are able to work smarter.
Inventory loss. A reduction in lost or wasted inventory opens new opportunities. You can recover capital tied up in consigned inventory and put it to use in different ways. You might funnel it into manufacturing new products or putting on more sales rep training. Or, you’d have capital freed up to do more surgeon training courses. You can probably think of a half-dozen ways to put working capital recovered from inventory to good use right now—with results that have real financial implications.
Streamlined operations. A digitally connected supply chain offers tools that change daily operations for the better. These include tools to search and access implant details, templates to manage inventory requests, comprehensive reporting, and in-app communications. A better way of working has other benefits, too—like freeing up rep time, improving collaboration between teams, and reducing the stress and burnout that comes from the inventory scramble.
Sales data. Real-time visibility can also extend beyond field inventory and help to strengthen the bottom line. With the right tool, your team can stay on top of sales trend data, which is especially important when things can change fast month to month. This can help them stay on top of inventory issues or availability and support accounts more efficiently and effectively.
Improving inventory visibility requires the right approach—and the right platform. ImplantBase can help. Implementing ImplantBase is the fastest, most effective way to enable real-time data, visibility, and inventory control. ImplantBase is orthopedic-specific and is designed exactly for how your teams work together—sales operations, supply chain, field reps, and finance. Our mobile app provides on-demand, real-time access to inventory, data, and processes to bring the field to you—and your teams together. Orthopedics is our entire focus, and we’re constantly working on new developments and enhancements to help you navigate changes in the market and your business, so you can be proactive.
Ready to learn more? Schedule your free assessment with our team to talk about ImplantBase, and how we can help you access better data in real-time.
Note: A version of this blog originally appeared on November 15, 2018. It has been updated and lengthened.