Respiratory Stocking

To kick off our respiratory stocking series, we will be exploring best demonstrated practices for high velocity, lot-tracked product with expiration dating consideration. For insight into this process, we consulted with the Cardinal Health WaveMark™ Optimization Services leadership team of Frankie Rogosienski, Earl Morrow and Brad Doyel.

The Cardinal Health WaveMark™ Optimization Services Supply Management and Workflow Solutions group works with customers across the country to establish processes and optimize supply handling to ensure customers have the right product at the right time in the right location.

According to Rogosienski, an effective starting point is to use historical data to establish Periodic Automated Replenishment Levels (PAR), which set inventory minimums that trigger reorder of products. Once this has been implemented, you can then identify products that are subject to seasonal variations in usage and determine when and how to adjust PAR levels to account for these changes. It’s important to utilize processes and technologies that ensure reliable and actionable data, specifically, ones that provide the ability to set and update PAR levels.

“In addition to Material Management Information System (MMIS), we recommend utilizing a automated inventory management solution that can track product specific attributes like lot numbers and expiration date and give you real-time visibility to high-dollar value products,” says Morrow.

Additional important considerations include establishing a process to ensure FIFO product rotation (e.g. 2 Bin Kanban process for low-dollar value inventory), utilizing point-of-use consumption to drive reorder and replenishment needs, and monitoring product usage at a sufficient periodicity to ensure adequate days of inventory on-hand (DIOH) based on clinical volume (e.g. the industry standard of eight DIOH.)

“Make sure you have the ability to account for products on allocation or long-term backorders in order to evaluate the impact of these products on overall supply chain,” noted Doyel.

Periodically review and adjust inventory handling processes and PAR levels to account for long-term variation in clinical usage. For high-demand seasons, it’s critical to prepare by ensuring that there are approved substitute products. At a minimum, make sure that all “critical” path inventory is accounted for.

For a better chance at being prepared for unpredictable seasons like this, it’s important to regularly evaluate the “health” of your overall supply chain and various distribution channels to ensure there is an adequate and continued ability to source and deliver inventory.

To learn more about Cardinal Health WaveMark Supply Management & Workflow Solutions click here.