How reliable overnight delivery can create a just-in-time supply model that saves time and labor
Balancing your inventory can sometimes feel like a high-wire act: you don’t want products to expire on the shelf, but you can’t risk understocking, either. The just-in-time (JIT) supply model is intended to reduce this stress by supplying just what you need when you need. But there’s also the concern of trusting that your supplier or distributor will have your items on-hand when you need them—in the end, what’s the use of a next-day delivery guarantee if your distributor can’t assure that those items are always in stock? This is where the power of overnight from a trusted partner could yield results you only dream about.
A target for savings
What are the benefit of just-in-time? This model will help you cut costs and keep supplies lean—the goal of many healthcare executives in this day and age. Inventory is always a great target for savings.
JIT requires frequent small deliveries of items in quantities closely matched to the rate of use. It is demand driven and intended to help eliminate waste. In healthcare, the wait for deliveries plus the time it takes to process items after delivery can affect the quality of service. JIT, along with next-day delivery, offers flexibility and continuous improvement that will help get the products you need on your shelves in a timelier manner.
The advantages (and potential disadvantages) of JIT
The just-in-time supply model could offer many benefits to your organization. Financially, it minimizes your inventory holding costs, including warehousing/storage, and requires less investment in inventory in general. Your improved cash flow could open up funds for other needs.
JIT also offers several ways to enhance your inventory. You will see a minimal amount of inventory obsolescence; a reduction in waste due to a smaller risk of lost, damaged, or expired inventory; and better utilization of space. You may even be able to repurpose areas that were previously used for storage into more profitable space.
As with most things in life, there are a few potential drawbacks to this model. If your organization isn’t utilizing a reliable and modern IT system, it will require an investment in one. You must also consider the potential lack of availability of product due to late delivery or events outside of supplier or distributor control, such as natural disasters, and you could potentially be unable to meet requirements for any unexpected occurrence, such as a mass casualty event.
How overnight delivery strengthens JIT
The average consumer doesn’t necessarily need or want next-day delivery. While there’s no doubt that it’s exciting to find your most recent Amazon order in the mailbox, even those who pay their membership fee don’t receive deliveries quite that fast. So, what’s the advantage in healthcare, and why is it sometimes necessary?
Let’s take a look at your typical OR. In 2010 there were 15.7 million ambulatory surgery visits to hospitals[note] https://www.cdc.gov/nchs/data/nhsr/nhsr102.pdf[/note] and, in 2011, hospitalizations that involved OR procedures constituted 29 percent of the total hospital stays in the U.S[note]https://www.hcup-us.ahrq.gov/reports/statbriefs/sb170-Operating-Room-Procedures-United-States-2011.pdf[/note]. These millions of procedures represent billions in supply spend. Your average distributor stocks about 40-60% of the products that a typical OR needs to run a daily basis. Put another way, that’s 4-6 out of every 10 items that your facility may request, at a moment’s notice, needed tomorrow.
Here at Suture Express, we stock many products in the suture, mesh, endo and energy categories that many other distributors do not. Our next-day fill rate stands at 99.4% on 6,000+ surgical SKUs to help customers eliminate the waste associated with stockpiling. We’ve helped customers like Banner Health reduce costs by storing and distributing high-volume items at the Banner Health Consolidated Service Center, while having low-volume items overnighted from Suture Express directly to end user facilities. Banner now sees a 99% next-day fill rate on 37,000+ lines.
The power of JIT hand-in-hand with next-day delivery is indisputable if you select a distributor that reliably has product available when you need it. To learn more about how Suture Express may be that trusted distributor that you’ve been looking for, visit http://sutureexpress.com