In theory, this sounds like the perfect option for both sides, suppliers as well as hospitals. In practice, however, managing consignment inventory efficiently is challenging and can become a time-consuming and massively costly task, if not done the right way.
Here are three of the most common mistakes to avoid when managing consignment inventories.
1. No inventory visibility
Why is inventory visibility getting more and more important? And how does it affect your consignment inventory?
The modern world is getting more complex; global supply chains and a growing range of medical devices and equipment lead to more strict legal regulations. Inventory visibility is a big part of maintaining compliance with common regulations in the healthcare industry. When you have full inventory visibility, you save on time-consuming admin tasks like manually monitoring shelf-life dates, batch numbers, etc. No product recall, no upcoming expiration of any consigned medical supplies can get you nervous, when your inventory visibility is 100% given. When all data and all inventory flow is fully visible and traceable, at any given time, you eliminate the number of expired batches, meaning you drastically reduce costs while maintaining compliance with legal regulations.
2. Your consignment processes are filled with manual tasks
If you think of your consignment inventory processes as a cycle, you can clearly see the following important steps:
It all starts with shipping your consigned products to the hospital. Then, once a consigned product is consumed by the hospital, it needs to be invoiced and finally replenished. That is when the whole cycle starts all over again.
What needs to be avoided in this consignment cycle is any sort of manual tasks. Get rid of any time-consuming admin activities that could break into the process flow. Meaning; no spreadsheets or handwritten notes for documenting consumption, expiry dates, or for counting the inventory. The key is to automize this consignment cycle so that your products’ turnaround times are fully optimized, and all kinds of human errors are eliminated.
3. A shiny app that’s not properly integrated into your ERP system
The data you’re using is only as great as its source is. Inventory software solutions that require a duplication of your data and are not 100% integrated into your ERP system, will have a negative impact on your daily work sooner or later. The lack of real-time data can lead to serious problems when, for example, facing a batch recall. So, unfortunately, a state-of-the-art consignment software does not help anyone if it is not properly integrated with your ERP system. Get rid of any fancy apps and invest in a proper solution that complies with your ERP landscape.