Are the basic tenants of demand forecasting a good fit for healthcare?
Demand forecasting, which is the use of data and analytics to predict customer demand for a specific period, is an important tool for businesses. These strategies have been around for decades, and accurate forecasting can lead to an improved cash flow, minimized inventory costs (no stock-outs or overstocks) and optimized inventory, and more satisfied customers. But do these strategies translate into healthcare?
Making it work
It’s true that retail demand forecasting strategies aren’t always a good fit for healthcare. Patients present with various and oftentimes unique demands, setting them apart from the larger customer groups that are more easily identified in other sectors. For hospitals, supply chain forecasting depends on both customer (patient) and the physician needs, rather than just customer needs. Lastly, in healthcare, a failure to meet the needs of the customer can result in much more serious consequences than in other industries.
Despite these challenges, retail forecasting strategies can be used in healthcare if the methodology is adapted properly. Done right, the benefits include improved supply chain efficiencies that equal money saved but also improved patient safety, more favorable outcomes, and a better working environment.
Your unique needs
Strategy isn’t the only aspect of demand forecasting that sets healthcare apart. Your goals, or needs, are likely different than most retail objectives. A hospital or healthcare facility must be able to project demand based on location, address both long-term and short-term needs, support the facility or system’s budgetary needs, and address critical lead times.
IT makes a world of difference
Forecasting is attainable in the healthcare industry thanks in part to the abundance of information technology at use in most facilities. The data necessary to forecast demand may be at your fingertips—what products are being used? What products expire on the shelf? Where are you wasting money, and how? If you can answer these questions, you’re well on your way. If you can’t, there are a variety of information technologies that can help, including point-of-use data entry, RFID, and SKU technology.
While a restaurant or clothing store must predict how many people will walk through the door, healthcare facilities have an advantage here as well. Patient scheduling means you know who will walk through the door and when, making it easier to predict customer demand (not taking into account variables such as the ER).
If the technology is in place, the challenge becomes visibility and integration—can you see the data, and is it being used in meaningful ways?
No matter where you are in the journey of demand forecasting—from exploring the concept to attempting an action plan—Suture Express can help. We offer enhanced visibility into your product usage and inventory value, and can help you identify opportunities for inventory reduction and other performance improvements.