Inventory Risk Management is an important factor for long-term growth and competitiveness in the medical device industry.
This blog shares the StarFish Medical approach to 5 areas that are critical for good Inventory Risk Management.
How can you manage inventory risk and grow business?
1. Demand Forecasting and Accuracy:
First, organize a cross functional planning team with technical knowledge & expertise to determine the required inventory using advanced forecasting methodologies. They should identify critical parts and parts that have long lead times, then take the necessary actions to arrange logistics for those parts to arrive before needed to avoid future problems.
2. Select the Right Vendor:
Make sure to select the right vendor(s) for your parts. Create and use modern filtering methods to evaluate suppliers and then include them in your top tier list. Use that top tier list to make sure everyone is aware that these vendors have met all the necessary quality standards of production, deliverance & can supply the parts with the quality and quantities you require.
3. Analyze Inventory:
Become efficient and prioritize by segregating your inventory into three respective classes. Class ‘A’ includes all critical parts (higher in value and long lead time). Class ‘B’ refers to parts which have a short lead time and a value that falls between the high or lower side of all the required parts. The last is Class ‘C’ which are parts that are readily available or have very short lead times and low value e.g., generic screws or nuts. To maintain traceability, be sure to serialize the entire inventory and maintain the information in an inventory management system software which will help locate and check the movement of parts on a regular basis. Conduct physical cycle counts on a regular schedule to confirm and update the inventory accuracy of your inventory management system.
4. Continuous Improvement:
No strategy or process can work forever. Work together as a cross-functional team to reassess your processes and strategies from time to time (especially during times of change for product, market or personnel) to figure out loopholes or areas that should be improved over time. By looking at the changing market and conditions around you and putting extra efforts into continuously improving your inventory management process, you will sustain and even increase earlier improvements and efficiencies.
5. Employee Training & Development:
Inventory Risk Management isn’t only about updating the technological aspect of the company but also working on employee development through training and workshops. Invest in employee training so they can effectively apply inventory risk management methods. Engage employees in meetings and on-sight activities so they can bring insights and new ideas to the table which will help optimize your management approaches.
To summarize, mastering inventory risk management is critical but by embracing all the tactics mentioned above you will not only reduce overall risks but also streamline operations and processes to meet ever-changing demands. We believe that effective inventory management helps us gain stakeholder trust, attract clients, and deliver client success in this competitive industry.
Anis Baig is an Inventory & Logistics Coordinator at StarFish Medical. Anis is coming with extensive experience working in Inventory & Warehousing industry. He holds an MBA.