Balancing-Needs-Consignment-Field-Inventory

Gaining full control and visibility over and into your medical inventory is a top priority for any brand in the space today. However, this is not always the simplest task due to the way separate inventories such as consignment and field are managed.

While consignment and field inventory might be the most common and cost-effective methods used to make sure a steady flow of medical technology is maintained between producers and end users, their use does bring certain complexities to the table which can mean medtech brands struggle to keep the two meticulously organized.

With the needs of field inventory covering the entire stock held by a company, whether subject to current retail or not, and not maintained at the seller’s premises, and consignment inventory being a part of it, but defined as being in the hands of a third-party retailer (consignee), with the wholesaler (consignor) retaining ownership until the products are sold, it’s easy to see how complications can arise.

Consignment Inventory

All medical supplies need to be inventoried in a manner which allows them to move quickly. This is true of pharmaceuticals, store cupboard equipment such as masks and syringes, and of course medical technology. Procedures are regularly scheduled mere hours or minutes from when they are due to be conducted, and healthcare providers need to be confident they can put their hands on everything they need to treat their patients without unnecessary – and often life-threatening – delays.

With this in mind, it’s simple to understand why consignment inventory is so important in this field as it allows for inventory to be stored with a local sales rep or even at the healthcare center itself – significantly reducing the length of the supply chain needed to get critical products into the hands of providers.

However, consignment inventory poses significant challenges for medical equipment producers if there is not a robust method for tracking this kind of stock and can easily result in inaccurately maintained stock levels, incorrect invoicing, shortages, and loss of revenue. Without this kind of strategy in place, there is no consistent method of tracking when products are removed from consignment inventory, no way to issue and invoice for used items, and no way to keep field inventory levels balanced with the various consignments spread over the country or even the world.

"Since these items are now consigned or vendor managed, the operating room materials staff often exercises little inventory control over them,” said Becker’s Hospital Review in a report on the matter. "Without the necessary control and accountability, inventory can be lost, damaged or expire. Also, the incentive to continuously improve and drive inventory levels downward to optimal reorder points is lost. That puts an important managerial function in the hands of the supplier, a party who, depending on the terms of the agreement, may not realize any benefit from driving improvement or efficiency.”

Balance

What is needed in this situation is a modern and digital enterprise resource planning system. With ERP technology working for your medtech brand, consignment stock levels can be automatically updated and feed back into field inventory for updating. Invoices can be issued and updated automatically and instantly, and replenishments can be ordered when stock levels reach predetermined levels to avoid the chance of critical equipment running out.

This can be achieved by combining ERP software with barcode or RFID enabled mobile devices, enabling reps or healthcare providers to scan consignment inventory as it leaves the stock room. This means sales are never left stagnating in a rep’s ledger until it is manually updated but sent straight through to the accounting and sales teams for processing and invoicing.

This empowers medical service providers to always have the equipment they need on hand, while giving medtech producers greater visibility than ever into their consignment inventory and access to reporting tools which allow them to ensure it is always carefully balanced with the greater needs of field inventory maintenance.

"What if your Sales Rep could make the necessary system update on his own?” writes ERP service provider, mymediset. "Now imagine that he could do it in the same three seconds as he takes the medical equipment out of his trunk stock! Only a few clicks and the system knows this specific equipment with a specific serial/ batch number and expiry date has been sold to this specific customer. The invoice is issued automatically, and the replenishment is also immediately ordered. All is happening in the background in real time with an immediate effect on the whole ERP system, worldwide.”

Final Thoughts

Consignment inventory is a critical tool in the business of making sure healthcare providers can access all the equipment they need to perform their vital function. However, medtech producers need to make sure the use of consignment inventory is carefully tracked and balanced against field inventory. ERP software and technology such as RFID can help ensure stock is kept well maintained and invoicing is prompt and accurate.

Balancing the needs of consignment and field inventory is sure to be part of the conversation at LogiMed 2023, being held in March at The Westin Rancho Mirage Golf Resort & Spa, Palm Springs, CA.

Download the agenda today for more information and insights.