LogiMed USA 2019

March 19 - 21, 2019

Rancho Bernardo Inn, San Diego, CA

How to Eliminate Transactional Waste for a Leaner Supply Chain

brought to you by WBR Insights

In this modern age of digital technology, transactions should be a simple thing to complete. However, this is not always the case in the medical device industry. The logistical arm of this industry can often be filled with frustration and waste, which can cause major problems, especially when dealing with large suppliers, vendors, and customers who need to process several transactions each day.

This has led to a need to introduce a policy of Lean transactions, which can not only remove these issues but also provide cost savings, a boost to returns, and increased organic growth to the organizations which deploy them.

What is Lean?

There's more to Lean processes than removing waste and reducing costs in the supply chain. To successfully implement Lean means taking an objective overview of all front and backroom operations and transactional processes, then systematically looking for those elements that are bloating or adding unnecessary complexity to them.

(Image source: goleansixsigma.com)

"In a typical transactional process, there is waste. Likely six of the eight wastes can be identified in a business-to-business sales person's daily job," writes Marissa Brown for Supply Chain Management. "There are often many conversations without a tool to enable individuals to move through a consistent set of steps. With a Lean culture approach, there's a defined, trimmed down process. Each time a market opportunity comes in, the organization follows repeatable steps with standard work processes whether for new product marketability or for engaging prospects and customers in a personalized yet systematic way with the goal of exceeding a goal."

Reducing Variation

Lean management methodology uses an infrastructure of trained agents who can deploy utilities and statistical process tools to deliver a problem-solving model which looks to identify, understand, and eliminate the negative effects of transactional process variation.

By reducing variation in transactional processes, Lean proponents have found they can bring in initiatives which strip transactional processes back to the minimum number of steps. This can center those processes and increase accuracy and reliability. From the perspective of the customer, frustration is reduced, especially when it comes to big purchasers.

When we talk about variation, think about it in terms of averages.

You might have an average delivery time of 60 hours, but this could mean you have a variation of between 40 and 80 hours. Such variation means customers can't reliably predict delivery times, which can result in a loss of confidence in suppliers. The need for a predictable and consistent service is of high priority, especially in the healthcare industry. Variance can also result in out of stock products or, the opposite, inventory build-up.

Three stages of Lean implementation can help you manage variation effectively.

Discovery, Design, Deployment

The first stage is about finding out which factors are causing variation in your transaction processes. As with many things in life, the best way to discover something is to ask the people whom it effects. Organize focus groups of both customers and your staff and ask them where they encounter bottlenecks and frustrations when putting transactions through.

While organizing a staff meeting should be simple enough, it may not be convenient to get customers together for a physical focus group. Therefore, it may be better to send them a survey to fill out instead. There are loads of tools online which allow you to create and disseminate surveys for free, so this is a simple thing to do. Customers are likely to appreciate the fact you care enough about their experience to ask for ways to improve it. However, you could offer a discount if you feel you want to further incentivize their participation.

Finding out where the problems lie is the hard part. Once you know the issues causing it you can then work on designing and deploying a solution to reduce the waste which causes variation. It could involve removing an unnecessary confirmation step in transactions or finding ways for your shipments to pass through consignment centers more expediently.

Whichever solution you deem appropriate, don't simply fire and forget. Lean is an ongoing process which requires constant assessment and re-evaluation to remain effective.

Final Thoughts

"While many people are familiar with the concept of Lean and the tools that go with it, far fewer organizations have taken it to the level of systematically looking at waste in the front- or back-office transactional processes," writes Brown. "Even fewer look beyond waste to see the benefit of these tools that can actually grow top-line revenue, increase sales funnel velocity, or speed up product development."

Reducing transactional waste is set to be a hot topic at LogiMed 2019, taking place in March at the Rancho Bernardo Inn, San Diego, CA.

Download the agenda today for more information and insights.