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CSX Playbook: How can I use my ConnectSx data to stay in stock and forecast my inventory needs?

CSX Playbook: How can I use my ConnectSx data to stay in stock and forecast my inventory needs?

Introduction

Data is knowledge, and knowledge is power. So let’s talk about how to make your data work for you. One of the biggest values to your organization that ConnectSx offers is access to your data throughout your value chain. But now you need to leverage it to make decisions for your business. So, what are some basic ways we can start using this data to forecast our inventory needs? What follows are some rudimentary methods and considerations that should help you on your inventory forecasting journey.

Staying in Stock

Par Levels

Par levels are your first line of defense when it comes to staying in stock.

  • Par Levels

  • Facility Par Levels

  • Catalog Par Level View and Stock Status

  • Par Level Report

Replenishment Requests

Forecasting Inventory Needs

Forecasting inventory needs is really about predicting demand.

Predicting Demand

Understanding Your Inventory Usage Patterns

Figure out your Minimums

In the medical device industry, demand can’t just be predicated on what is being sold, because after all, some inventory, by design, NEVER gets sold. Some inventory must be present in order for other inventory to be sold (ex. instruments), so you have to look at how often inventory is wearing out and how often you’re replacing it. Furthermore inventory isn’t only replaced when its at the end of its lifecycle, other reasons, such as lost inventory or inventory being stuck where its not doing its job could contribute to instrument shortages. Sometimes hospitals require multiple of a device so that there is a replacement if one breaks or a rep requires two because there isn’t time for a device to be re-sterilized in between cases. All of these factors should be taken into consideration when seeking to understand how much inventory should be ordered.

  • What items must be present in every case even if they aren’t sold (Non-Sellable Inventory)? Identifying these items will help you understand which items must be forecasted outside of or in addition to your sales forecasting.

    • Instruments: Some instruments are used in every case, some aren’t. However, when they are needed they must be present for the surgeon to use so we need to calculate a minimum quantity of these to order and then identify a comfortable number to order above that as “safety stock” so we don’t run out in the event that more are required due to wearing out or inventory loss.

    • Rarely used, but required items: These could even be rarely used sizes of your device. They are not used often, but they are used and must be present in any set that arrives ready for a case on the off chance they are required.

    • If you have items that are not sellable and are not used in all cases, then you may have to use your own internal knowledge to come to a forecast for these. Perhaps consider what % of cases require these devices and then add a cushion of safety stock as a method of backing into this order number.

  • How many cases did you have last year?

    • Get an idea of how many cases need to be covered. A good place to start would be how many cases got performed last year. So, if you’ve been a customer for a while, pull your sales or case report to find out this data. If not, you may need to reference the historical data from before you started with ConnectSx. If you’re not a ConnectSx customer, become one today!

    • Average Cases Per Year: It would be best to get an idea of what your AVERAGE cases per year is, but at the time of the writing of this article the past few years have been… “non-standard”. I say this because in recent years we have experienced such black swan events as a global pandemic or recovering from a global pandemic. Additionally, it is not extremely useful from a forecasting perspective to assume that your case volume is the same as it was 4 or 5 years ago in any case, let alone prior to a global pandemic. So, if you’re able to come to an understanding of your average cases per year, this would be a useful number to deal with in forecasting.

    • Scheduled Cases or Potential Cases to Cover: Another best-case scenario for forecasting might be to consider the # of scheduled cases per year, as opposed to performed cases. This is where forecasting becomes a bit of an art, but we could think about the number of cases we have to cover as being potentially more significant to inventory needs than the number of cases performed, because ultimately the potential cases to cover is really a better total of the number of cases we have to worry about having enough inventory for. So, if you have access to scheduled case data, for instance if your users are scheduling cases in ConnectSx when they hear about them in advance of the case date, then this can further expand your minimum inventory number. Thinking of potential cases to cover would be a “safer” minimum than just cases performed in the last year.

 

Are you anticipating growth in case volumes? Are cases going to be up 10%?