Optimizing Inventory Management with the ‘Circle of Life’ Approach
Most medical device manufacturers are already great at shipping high volumes of inventory. By that, we mean assembling finished goods and pushing them out to the field.
Shipping inventory out, though, is just one aspect of a strategic, full “circle of life” approach to inventory management—and the reality is that many OEMs are not nearly so adept at the other two aspects, loaner kit management and reverse logistics. Yet, meeting market demand with supply, having access to working capital, and ensuring growth and profitability are all only possible with a strong performance in each of these areas. Let’s take a closer look at each to understand how they are interconnected and how they contribute to your success.
Loaner kit management
Finished goods production, of course, hinges on coordination of the inbound supply chain and adherence to assembly schedules to meet demand. Loaner kit management is a different animal. It’s about receiving, inspecting, cleaning, repackaging, inventorying, and shipping kits back out to the field as efficiently and quickly as possible. The better you manage your loaner kit turnaround, the more surgeries you can support. You can reduce your inventory footprint, which in turn can free more working capital.
Reverse logistics—also called field returns—has to do with bringing inventory back from the field. Doing so lets you more effectively meet supply with demand, reduce backorders, or support cases without locking up more cash. Reverse logistics programs can be particularly effective after acquisitions, when backorders are increasing or already high, or when trying to mitigate prior overbuying.
It’s easy to see how these three aspects of inventory management can become siloed. You have your finished goods that everyone is focused on getting out to the field. You’re simply trying to remain above water with the daily grind of loaner kit turnaround. You already know that field returns can be a highly complex, burdensome process, with uncertainty about what’s actually going to come back—and in what condition—once you issue a request.
Taking the circle-of-life approach
When you break down those siloes, though, you take a more strategic, holistic approach. Bringing inventory back from the field—whether that’s from a hospital or rep—and making it usable again in your inventory gives you options. So does taking a fast-turnaround approach to your loaner kit management. You could:
- Add reclaimed field inventory back to your finished goods inventory, which could allow you to reduce backorders and/or increase case coverage
- Use reclaimed field inventory to replenish loaner kits, which can drive down your overall inventory footprint
- Ensure you are meeting case coverage demands with a lower overall inventory investment
- Reinvest working capital in new product development or other innovation
Such a strategic and holistic approach to your inventory management can be difficult to implement on your own, especially with regards to staffing, operational costs, and quality considerations amid the demands of running your business. That’s where outsourcing with an expert partner can yield benefits, helping you achieve 24-hour loaner kit turnarounds and execute complex reverse logistics returns without driving up your fixed costs.
The quality aspect deserves its own focus: it doesn’t matter how fast you turn your kits if they’re not clean, functioning, complete, and 100% ready for the next use. At Millstone, we’ve created a quality system that matches those of our manufacturer clients. Every day, we process thousands of pieces in our 276,000-square-foot Memphis-area facility. And everything we do is traceable, from loaner kit replenishment to finished goods inspection to shipping.
We’re very fluent in bringing inventory back from the field, cataloging it, making it 100% usable whether or not it was used, and giving it back to you to help you manage inventory on a new strategic level. With our help, you can reduce your inventory footprint, grow your case coverage, unlock more working capital, and be confident that every piece or kit is ready for the next surgery.
At Millstone, we get it. We believe quality drives patient success. That’s why we’ve perfected all the capabilities medical device manufacturers need to get to market. Today we offer post-manufacturing and aftermarket services to more than 50 customers, including some of the top 10 orthopedic companies in the world. We are constantly evolving our processes and services to help OEMs achieve sustainable success. We offer clean room packaging, medical device specific warehousing, finished goods distribution, loaner kit management, advanced inspection and reverse logistics services—all with an unparalleled focus on quality.
What could we help you do better? Learn more at http://millstonemedical.com.
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