Category Archives: Supply Chain

Reports – do they work for you?

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How often do you see reports that have little meaning or are too ponderous to use, this then makes the reports ineffective, simply because no-one wants to use them.  Then there are the reports that you have been instructed to put together and although they are useful, they have little relevance to your own position or function.  What you need are reports that are concise, relevant and effective.

To design a good report, list the minimum information that is required to manage that part of your business you are reporting on.  Next, find what is the required data to compile this information. And lastly, source the data – where does it come from. Preferably, most of this data is already contained in spreadsheets (or can be imported into one easily).

Now review the source, include other fields that will beef up your report, but ensure it adds value to the report and is not just filler.  If done in excel the report should also include a tab that has the data in pictorial format – graphs! This is where KPIs can be viewed and valid assessments made.

A good report will show trends, both positive and negative, as well as status.  It will also be timely, easy to produce and even easier to read.  This then will allow you to see what is happening, or has the potential to happen, and take the appropriate action.

For all the SMBs and Operations people out there, I have written a brief on ‘Focus’ that may help you design your own reports on Freight, Inventory and Staffing (Operations reporting 101).

Note:
DATA – is raw detail, usually one line of data contains information related to one transaction. Doesn’t tell you much.
INFORMATION: an assortment/combination of data, providing information and trends in simple format.
REPORT: Information in a format that tells a story. Big picture stuff.

Healthcare Inventory

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Hospitals are being pushed to reduce their costs, from this need a fantastic opportunity can be found – reduce inventory in their stores to Zero (excluding drugs). Massive savings can be made by not purchasing and ‘storing’ inventory in any quantity. The amazing part of this, is that it will cost nothing to implement, although it will require a little more work with the vendors and drafting new supply agreements up front.

The savings can be achieved by having Vendor Managed Stock (VMS).  The scenario is: the VENDOR places a quantity of stock that they own in the Hospital’s imprest cupboards, with initial quantities being agreed to. As hospital staff consume the products, they are in reality “purchasing” the stock at that time. The appropriate invoices will be based on usage at time of replenishment. In effect you have just removed ALL your inventory costs.

The next trick is to ensure you never go into an ‘out of stock’ situation. For VMS to work effectively there needs to be a financial penalty for stock-outs, saying sorry by the vendor does not help the patient and there is no incentive, apart from losing your custom (albeit a strong incentive), to ensure stock is ALWAYS available.

A penalty clause included in the supply agreement eg: “stock-outs will attract a $1,000/day penalty fee, payable by the vendor”, will give the vendor the appropriate incentive to ensure adequate stocks are on site at all times.  Airlines use a similar clause based around ‘AOG’s  (Aircraft on Ground).  Remember, overstocking can be managed, out of stocks are critical, if not life threatening, and are never ‘managed’.

This method also takes an extra link out of the chain so there is even less chance of running out of stock. There are a few other provisos that need to be included to ensure the process is fair, robust and is appropriately measured. And, if followed correctly by all parties , everyone is a winner from the hospital, the vendors, the staff and ultimately the patient.