Help! I Need Somebody's Help!

Well Nation:

Eventually, someone does respond to a Call To Arms.  Our first anonymous post is poignant and addresses one of the most pressing issues that each and everyone of you are challenged with on a daily basis.  If ever there was a post that drives a point home, well, it may be this one.  How many of you work for companies that work on a shoe string budget, have no understanding of inventory management,  or subsidize companies providing courier services? Some of readers will view this post as a someone complaining, while others will fully understand what this blogger addresses.  Who knows, maybe it will open some peoples eyes.  But one thing that TSB will say, if you don't have what you need or spend your day running around picking up and dropping of instruments and implants, you can't get the job done.  Kudos to Mr. Anonymous for a well written blog post.

For some time now we wonder about our industry cluttered with medical devices, implants, me-too products, trays and the like and dislike and continue to ask ourselves a series of questions that lead to the underlying “what matters” or ding an sich from which all things are created or problematic. Poor spending, trickle down economics, inflation, pricing issues, pay cuts, layoffs, fire your cover rep cause we can’t afford him, less innovation, more renovation, horrible training labs and bigger inventory warehouses so everything isn’t so cluttered and we can actually find stuff. And there lies the issue! Who is the number one user of FedEx in the world? One would argue that its Big Blue and Medium Red with a close second and maybe Little Purple growing every year. But the real question is why? Could it be possible that inventory management is one of the most crippling ipso facto of the medical device industry? The ugly duckling kept in the back room behind a locked door hidden in the depths of accounting books so that no shareholder can see the ugly truth. The life suck duck that couldn’t turn into a swan if you paid it to. Millions of dollars each year spent on lost inventory? No, you don’t say? TSB, how many reps have a garage full of product that no one knows about? How many implants do you have in your drawer? The FDA and CMS working together to create a universal system to track products because in the event of a recall they have not a clue on how to stop a faulty product from reaching a patient (site stent article). Seth Jayson from the Motley Fool even goes as far as using inventory as a method to track which companies will outperform others based on how long product sits on the shelf. Seth, hate to burst your prolific profiling bubble but that product is on the shelf because the company overbought to make up for a lack of efficient tools for projection on usage. Numerous companies are creating satellite distribution centers instead of creating new tech based supply chain management systems. Spending millions on new facilities full of sweat shop bean counters. Big Blue pulls the plug on an RFID based system because they can’t launch it effectively? What happened there? Verify this…

The problem or dare I say it shouldn’t be their problem is that reps in the field are ordained inventory managers in the field. Once it leaves the warehouse it’s off the grid so the only one who can monitor it is the field reps as if they don’t have enough to do. 

For example,

Inventory Manager:  Hello Johnny Rep, I need those trays back and if it’s late you owe me $100 per day, per tray. Yup, we’re docking your pay to help pay for this huge shipping bill we have. Why do we have this huge shipping bill you ask? Well, you see we don’t actually trust you. You see since you’re incentivized by sales and not turnover of loaner sets in the field we need you to ship that tray back priority first overnight back to the warehouse, which by the way is very costly, so we can begin our manual bean counting session so that whoever needs this tray next will have it available to them. Yes, there is a team of manual bean counters here in our warehouse and they put their fingers on every item to make sure it is present. Yes, we pay them a lot of money to do that which is also why we need to charge you a late loaner fee. Yes, I know automation would make this more affordable but my brother’s sister-in-law is really good at the bean counting plus the technology needed is a little high tech for my crew so we can’t really look at that as an option. I know it could save the company millions but I don’t work in the accounting department even though I manage the bean counters, and plus my brother’s sister-in-law’s kid needs a new pair of shoes and I’m tired of my brother hitting me up for a loan.

Johnny Rep: So this isn’t my fault and I shouldn’t be charged!

Inventory Manager: I know but sh*t rolls down hill and I’m afraid you’re at the bottom my friend.

Johnny Rep: We’re not friends. So you mean to tell me the real reason why it takes so damn long to get a customs request, or why my pay is constantly docked, or why the stock options I have are worthless, or why we haven’t innovated anything great in the past several years is because we’re pissing all of our money away on inefficient inventory management. Why don’t you teach your brother’s sister-in-law how to read a computer screen?
Inventory Manager: Because that would require me to implement a training program and yes, we spend roughly 20% per year of our revenue on my department but don’t tell anyone. (Cite source)

Johnny Rep: But I paid close to $20k in loaner fees last year and that’s a fraction of what my distributor overall paid. All because you want a bean counter to do something technology can do for a fraction of the price?

Inventory Manager: I know can you imagine if we absorbed those fees? We probably wouldn’t be talking right now and I would have no one to manage.

Johnny Rep: So who makes the call on whether or not to implement a new system that incorporates affordable technology which will probably pay for itself overnight?

Inventory Manager: I do, isn’t it great!

Johnny rep: So the largest cost factor of our entire company is basically in your control?

Inventory Manager: I know but don’t tell anyone because the tops think its R&D.

Why is a screw so expensive because for every one we lose we have to inflate the pricing. What do we do when demand is up and there doesn’t seem to be enough inventory to go around, we purchase more sets. What do we do when traffic is high, we hire more bean counters. Does anyone have an automated software system that tracks inventory in the field? Answer/guess: Less than 15%, if that. What do we do when there is a recall? We deploy a team into the field and rummage through offices, rep’s garages, hospital closets, SPD and anywhere else we can think of until everything is found. What do we do if someone dies because we couldn’t find what we were looking for because it was on the shelf in a closet we didn’t know about and someone used it in a case? We say its not our fault and refer it to legal.

Bottom line…yeah and while that’s compromised as well, we need better accountability because at the end of the day it could be your wife, your son or daughter on that table. And what now? Pricing cares and wears go out the window when morality and principle takes its course. Like Mel Gibson said so well in the movie the Patriot, “I’ve run my course”. Mr. Inventory manager if you can’t step up and say something then Johnny Rep and “the accused” pirates of the inventory closet should. There has been enough mowing in the field, there has been enough cutbacks and lack of innovation. Want to run lean and mean? Then Mr. Operations needs to look a lot closer at his operations and not the surgical ones. And Steve M. said, “Wide river runs open to the sea. “Run like a river and we’ll always be freeeeee, run like a river and we’ll always be freeeee.” Wide river carry me back home. Run like a river to the setting sun. Run like a river that has never been won!” Mr. Operations you’re never going to win if you open your eyes and create a transparent inventory management system that utilizes technology to meet the objective congruent with not only your sales force but the FDA, CMS and the like. Go big, or go home! Better yet tell the shareholders the real reason why you don’t hit your quarterly numbers. Or here is a novel idea…search the internet for “medical device tracking system”!! Money is pouring out of our pockets and into the sea and water is flooding the boat and we’re all about to sink. 

TSB,

Please ask the readers and more specifically the reps how familiar they are with this issue. Ask them what happens when the tray they need is not available or mysteriously missing or not at par? How does that fare with their surgeon relationships? How much are they spending out of pocket for local courier fees? How big is this issue? Ask the FDA? What is “Unique Device Identification”? What is Bill H.R. 3580? Why is Depuy putting implant vending machines in hospitals? Why is Eisertech selling product on an on-line store? Why is the industry shifting away from autoclaving product and to pre-sterile packed items? Why is CMS licking their chops waiting for the UDI mandate to become effective at the end of this year? Why haven’t we done something sooner? Why are the reps and distributors footing the bill? What tech companies have viable solutions? Better yet what companies started by former distributors or reps have created solutions and what are they?

- WebOps Mobile

- Itraycer

- SurgiTrace

- Awarepoint

- Clearcount Medical

The list goes on! Be a Patriot TSB and post this to light a fire under someone’s arse to make this happen. Set the reps free! Support innovation, support new tech that serves the corp at its core and leads to a revolution that sparks the industry into a new era. The ball is now in your court.

With care and love for this industry,

- Anonymous