I know of no other industry where having inventory on hand is more critical than in health care.
It can literally mean life or death when you don’t have the correct supplies or working equipment at hand in the right place at the right time.
Calculating the minimum re-order points, lead times for delivery and quality measures for supplies is a matter of math. But health care, like all industries, are feeling the squeeze for budget and need to make the most economical decisions for supply management as well. That is why PeopleSoft inventory can calculate replenishment by a number of methods so those items that are the most critical can get higher visibility and priority over others where economic order quantity can best be used.
Let me help you define and deliver an inventory model that makes economic and service level agreement sense.
Think about this the next time there is a pandemic (or a spike in sales or a product recall) and you wonder if you have enough on hand or in the pipeline to meet demand.
Defining Replenishment Options
Wikipedia definition: Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. Whether you are supplying goods, services, parts, expertise, hospitality….you have to coordinate all the inputs to match your output for the best possible price.
Supply CHAIN managment…what is your weakest link?
Let’s start the discussion and help improve the bottom line.
The Item master is one of the foundation stones for all the Supply Chain products in any ERP suite of products. By the way, you don’t need the inventory module to use the item master! The number of items in the Item Master depends on the nature and size of business. The count of Items in an organization’s portfolio could run from few hundred to hundreds of thousands. I have personally seen some clients with item masters in the 300,000 to 500,000 active items range. Every Item Master needs periodic cleanup and updates at some frequency based on the needs of an ever-changing business. Some industries could demand the daily activity of adding new Items and modifications of the attributes of existing items. The cleaner the Item Master the less chance of mistakes and the wrong product pulled for internal or external use. Adding Items and maintaining correct and up-to-date attributes is part and parcel of Inventory management.
If done manually (we are talking potentially 25+ pages), maintaining the Item Master is a cumbersome activity for inventory Managers. Errors in Items or attributes could mean a loss of inventory value, unwanted stock or Inventory shortages of required items. At some point, internal audits may trigger a recommended item master clean up to weed out the redundant items from the “active” list, a review of alternate items that truly are a substitute or replacement for a requested item and several other Item-related issues that need addressing. In most organizations this is a planned activity Inventory Managers will do on a regular basis and dedicate resources to review the content of the Item Master list and make the necessary corrections on a regular basis.
These are the key indicators that item / inventory management needs to reviewed:
- item is not available in a lookup for a location or a particular user
- nobody can find who the last supplier for the item
- ‘what did we pay for it last time? When did we order it?’
- the item is in the wrong unit of measure
- reconciliation of the value of physical count of inventory to the general ledger is a month long exercise
- standard practice to inactivate the old item and create a new one to solve an urgent need
Item templates can make creating new items more efficient, provides consistency in setup, dependable ordering by purchasing at a competitive price, auditability for year end and makes the end user experience more consistent (for the better!).
Check this out for using item templates
Understanding Configurable Item Templates
Thinking that a computer virus just affects your pc and that you can just restore a backup to get rid of it is not the whole story. You lose time (a day to find your last backup, oh yeah, how do I do a restore again?), lost work since your last backup, lost credibility since you have infected the computers of all your contacts (first target of any virus) and a lost day of production. One day of production is not so bad, right? What if your ‘production’ is dispensing medication or supplies in a hospital, executing payroll for thousands of employees, booking passengers for a flight or preparing customs documents for a shipment of perishable food crossing a boarder. The consequences can be very costly. The prevention? Keep security patch current.