Inventory management techniques for Orthopedic Implant distributors
In the orthopedic industry the two critical business processes challenges are:
- Reducing inventory cost
- Improving customer service through better fulfillment
Attaining those goals can be extremely stressful for an organization because reducing inventory costs generally means lower stock levels. Timely customer fulfillment requires readily available inventory which implies higher stock levels. It’s a stress on the supply chain that can make or break an organization because the implications go to profit, sales success, and even employee retention. Smart companies have cut that tension with technology.
Consigned inventory is very difficult to manage and one of the most challenging situations to manage is orthopedic surgical implants. Implants are expensive and it is critical that the correct items are available and intact when shipped for a procedure. This means there is a substantial opportunity for value creation – value from reducing inventory and value from being more responsive to client needs. The demand for orthopedic products has been growing as the global population ages. Currently, almost 40% of the US population is over the age of fifty. Globally the population of those over the age of 65 is expected to triple in the next fifty years. These factors will help to drive the demand for orthopedic surgical implants and make it all the more incumbent on suppliers and manufacturers to effectively manage their supply chains.
The problem, however, is that the industry is using brute force to react to this demand. Inventory levels in the orthopedic industry. This means that to provide the right devices to a surgeon at the right time, more inventory is being added to the company’s warehouses and stock. This might make sense if the industry growth was keeping pace with the inventory growth, but it’s not. This pattern is not sustainable for the entire industry.
