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last mile logistics are key considerations in building smart citiesOn October 16 2018 I had the good fortune to represent TECSYS on a panel session “Smart cities and the last 50 feet” at the 2018 MHI annual conference. The panel was an hour of discussion around the topic of changes in last mile logistics technologies and how they will impact industry over the coming five years and I have to say it was a lot of fun and really educational. On the panel was Kevin Condon at Kroger, Alan Amling at UPS, John Ellis at Ellis & Associates and me with the session well moderated by Scott Sopher, Principal at Deloitte.
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Demand planning for inventory management optimization
Although no business likes carrying safety stock, experiencing a stockout simply isn’t worth the risk to customer satisfaction. Take an industry-informed look at how to achieve demand planning ‘greatness’ when it comes to optimizing your inventory levels and still meeting customer requirements.

 

“No one ever achieved greatness by playing it safe.”

 

This quote is attributed to Harry J. Gray, an iconic business manager and philanthropist who, through acquisition, assembled one of America’s largest manufacturing corporations. During his career, he received numerous recognitions and honors and was inducted into the Junior Achievement National Business Hall of Fame. My guess is that Mr. Gray was an expert at risk assessment and containment.

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Male healthcare professional interacting with supply chain management software

 

Over the past 10 years, I’ve been working closely with leading healthcare organizations as they strive to improve their supply chain operations. So, I was intrigued to see a new AHRMM18 track this year focused on “Clinically Integrated Supply Chain” (or CISC).

 

During the event, supply chain directors, clinicians, and CEOs all addressed this enormous—and enormously important—subject and pushed the dialog forward from a multitude of different perspectives.

 

And therein lies the intrigue.

 

When addressing supply chain integration, we are inherently talking about connecting the traditionally disconnected, and it becomes a complicated—and often messy—state of affairs.


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Female healthcare professional posing for picture in clinicTransformation is a disruptive undertaking, but the risks and opportunities within the IDN Supply Chain warrant a closer look into a health system’s nextgen supply chain readiness.

 

Over the past few decades, a perfect storm has been brewing in healthcare. As M&A activity continues, consolidated healthcare systems are serving larger communities, managing bigger spends, and coordinating more complex business operations. It’s more essential than ever to render efficient health services while maintaining—or improving—patient outcomes.

 

One part of this ongoing complexity is exponential growth in the number of SKUs hospitals must manage. In fact, the number of individual supply items has mushroomed from a few thousand to upwards of 60,000—and that number grows every day.

 

The problem is that physical hospital space was never set up to handle this volume of product. In addition, clinicians do not typically receive training or education in supply chain best practice, and the negative ramifications on clinician efficiency, patient care, and cost control are becoming increasingly evident.


Determine your organizations’ readiness for supply chain transformation with the IDN Supply Chain Readiness tool.


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Hand stacking wooden blocks labeled with Clinical Supply Chain related images

It’s an interesting time in the healthcare industry, and for the supply chain specifically. Each of the following market factors is thrusting the supply chain to center stage and calling on all of us to up our game in the face of more complex operations. These factors include:

 

  • The advancement of new technology, from drones and robots to artificial intelligence and distributed ledgers
  • Increasing margin pressure
  • New and changing traceability regulations
  • Numerous mergers and acquisitions


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Effective inventory management is always a delicate dance between the cost associated with carrying too much inventory and the risk of not carrying enough to fulfill a customer order at the right moment. With ongoing pressure to ship orders within compressed timeframes, there’s no room for error, and competitors are always on your heels. It’s critical to unearth new ways to generate savings and efficiency at every turn. Cross-docking often leads the opportunity list with its ability to minimize material handling costs and get inbound products prepped for shipment at lightning speed.

 

Forklift cross-docking as it carries pallets of stock from warehouse into delivery truck

 

Although the practice of cross-docking has been around for quite a while, many organizations shy away from implementing it because they think it’s more work than it actually is. In doing this, they forfeit cost and efficiency benefits that can help them better meet customer demands, particularly for specialty items.


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Increasingly we are seeing distributors being pinched between spiraling shipping costs and rising customer expectations. Orders are getting smaller and customers are demanding faster and faster delivery methods, all without expecting to pay anything extra to cover the additional costs of the shipping. I thought it might be interesting to reach out to a market-leading regional distributor and discuss what they are doing to figure out this last mile transportation problem.

 

4 Werner Electric Supply truck drivers standing in front of Werner Electric Supply transportation trucks and warehouse

 

I interviewed Rory Mueller, Logistics Manager at Werner Electric Supply to see how they took this increasingly complex problem and turned it into a market advantage and a key differentiator for doing business with them.


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Not that long ago, distribution networks happily and conveniently operated through strategically-placed distribution centers, delivering, say, a pallet a month through LTL (less-than-truckload) carriers. Things might have seemed complex at the time, but there was no real thought about what could possibly happen next.

 

Courier in the driver's seat of truck searching map routes on his smartphone

 

Now, many regional distribution centers (DCs) are being driven to try and take on the task of customized distribution services and customer delivery themselves. Why? Because of higher-than-ever customer service expectations and the increasing cost of using commercial carriers.


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I was recently interviewed by Modern Material Handling for the article Health Care Embraces E-commerce Trends. In the article, it is clear that supply chain practices in healthcare have come a long way in the past five to ten years. Historically, the margins in this specialized industry have compensated for lack of advanced healthcare supply chain capabilities. Now, though, the industry is no longer standing still due to the increasing pressures on margins, traceability and customer demands.

 

Healthcare professional in hospital inventory room using healthcare supply chain management device and supply chain management software to find stock
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Warehouse worker using warehouse management systems to scan and organize inventoryA new era of buyers has arrived, and they are focused on the customer experience. It’s not enough to simply deliver a product into a buyer’s hands. No matter the industry, today’s savvy consumers expect a seamless, superior experience that delivers on a company’s brand promise. They want faster service, higher value, and 100% fulfillment. They want to feel good during the buying process. And they want this across all channels wherever they touch the brand.

 

With that in mind, everything a company does from its messaging to the sales process to what occurs after the sale is part of the customer experience. If a company has deficiencies in any area, it could result in a customer having unmet expectations and a poor experience. If they are left unsatisfied, the company – and brand – could suffer detrimental effects.


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