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Preparing for Covid-19 (Coronavirus)

Covid-19

A big part of mitigating the Coronavirus is having adequate medical supplies for testing and treatment available when needed. That is easier said than done.

Individual organizations have to deal with supply chain issues – inventory control, having enough working capital to pay for increased materials, lead times, supply shortages and projecting how much is really needed at any point in time. Every item that is either purchased or manufactured has to deal with all the same issues. Complexity increases items need to be coordinated. That means when more than a couple items have to be available at the same time otherwise the task cannot be accomplished. If one item is missing then the task cannot be done.

The most effective way of dealing with this complexity is to pull in all the related information into a computer model and have the computer model provide visibility into the current status and help plan for future replenishment. Most business systems generate replenishment orders based upon going below some minimum inventory level and this is for only one cycle out of replenishment. This might be good enough for a steady-state situation. But it is not good enough when there are dramatic demand fluctuations. Replenishments quantities should vary as demand varies.

One of the most controllable costs is shipping cost. The more that can be shipped at one time, the lower the incremental cost per item. Also buying larger quantities can provide volume discounts on your purchase. Our software will help you manufacture and purchase in efficient quantities and help you balance out these multiple objectives. The software will automate the planning process and help you improve supply reliably while lowering costs. Imagine having greater supply reliability and lowering costs at the same time.

One example of how the software works. Suppose in the past it took one week to issue and get a replenishment of saline bags. The amount ordered would have been one week supply  or 120 units. Under current circumstances lead times may increase to three or four weeks plus the demand per week is increasing. The software automatically calculates the next order based on increasing demand, now for four weeks. Therefore, assuming the demand is 120, 180, 220 & 300 in successive weeks, and the next order would be 880 units. Successive orders would dynamically change relative to lead time and demand changes. The software automatically calculates, providing visibility regardless of fluctuating demand. In this scenario the hospital will be stocked out for more than three weeks without the software that determines requirements this way. SCS Purchasing (our software) does this does this!