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Useful Advices - 7 Secrets to Writing Inventory Procedures
What would You do with $1,000,000
With $1 Million would you:
• Pay off debt?
• Purchase new equipment?
• Invest/save for the future?
• Give yourself a bonus?
$1,000,000 Waiting in the Wings
What do you and your business need that you have been putting off because you don’t have the money today? $1,0
With $1 Million would you:
• Pay off debt?
• Purchase new equipment?
• Invest/save for the future?
• Give yourself a bonus?
$1,000,000 Waiting in the Wings
What do you and your business need that you have been putting off because you don’t have the money today? $1,0
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
00,000 certainly would fill those needs. But where do you find $1,000,000 just lying around your business right now? Well, you probably have $250,000 in each of four areas in your everyday business, and you don’t even realize it.
Money in Business Procedures
And so let’s look at four places in your business whe
Money in Business Procedures
And so let’s look at four places in your business whe
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
re we will find $250,000 each and see how we can help you find it:
Part 1: Inventory - $250,000.00
Part 2: Receivables - $250,000.00
Part 3: Sales - $250,000.00
Part 4: Accounts Payable - $250,000.00
Part 5: Procedures - $1,000,000.00
Turn Cash into Time with a New Company Policy
But just what exactly is th
Part 1: Inventory - $250,000.00
Part 2: Receivables - $250,000.00
Part 3: Sales - $250,000.00
Part 4: Accounts Payable - $250,000.00
Part 5: Procedures - $1,000,000.00
Turn Cash into Time with a New Company Policy
But just what exactly is th
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
s source for cash? It’s time. If you are looking for $250,000 then it costs you $4,808 every week that you delay. So what you do with your time quite literally amounts to either costs of delaying, or it can amount to savings when you take action and control of your time. To correct this cost of delay, an increase in ve
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
locity must follow - which will set the difference between 'good' and 'great'. The consequences of this shift in system velocity increases discipline and competency: the ability to maintain the increased velocity and the ability to make the adjustments to achieve the 'great'. So how do you realize the difference?
Eli
Eli
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
inate Inventory and Increase Cash
Let’s start with the biggest, most obvious source – your balance sheet, specifically inventory. If you are a manufacturer with $300,000 or more of inventory (raw materials, work in process or finished goods) then STOP! We found it. Why? Because inventory is an unproductive asset.
Let’s start with the biggest, most obvious source – your balance sheet, specifically inventory. If you are a manufacturer with $300,000 or more of inventory (raw materials, work in process or finished goods) then STOP! We found it. Why? Because inventory is an unproductive asset.
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
Inventory is money, and having it lying around your factory is not where your money belongs. So if we reduce inventory to Just-In-Time (JIT) levels, then we can eliminate 85% or more of your inventory, which translates into $250,000 in cash. But that's not all. You will also save another $50,000 or more in annual inve
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ntory carrying costs. With less inventory, there are lower costs of holding inventory. Let's look at an example of what we're talking about.
Manufacturing Business Procedures Case Study
A manufacturing organization with 2 Million in average inventory balances needed assistance. We examined their inventory consi
Manufacturing Business Procedures Case Study
A manufacturing organization with 2 Million in average inventory balances needed assistance. We examined their inventory consi
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ting of raw materials, work in process and finished goods to understand and quantify the workflow, workload, and demand forecasting issues. Then we designed and implemented a process to improve their inventory cycle and tie it closer to their actual sales.
The metrics we developed reduced their inventories by 85% and in
The metrics we developed reduced their inventories by 85% and in
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
creased their manufacturing cycle efficiency from 60% to 90% within 120 days of implementing the new procedures. With these new processes and reports, the company now tracks manufacturing cycle efficiency and delivery time variance rather than just units produced, as the measure of their manufacturing effectiveness. The
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
result: extra capital plus a 50% increase in process capability (capacity).
Methods to Design the New Process
By becoming more efficient in the process, we can use time not as a detriment but as a significant benefit to our business. Step by step, let's take a further look at how time and efficiency plays a grea
Methods to Design the New Process
By becoming more efficient in the process, we can use time not as a detriment but as a significant benefit to our business. Step by step, let's take a further look at how time and efficiency plays a grea
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
t role in your business.
Increase Demand Forecasting Accuracy. We only need enough inventory to satisfy demand, and that is where part of the problem exists. If demand can not be accurately forecasted, then we end up compensating for this unknown with inventory.
Increase Manufacturing Cycle Efficiency. How well manuf
Increase Demand Forecasting Accuracy. We only need enough inventory to satisfy demand, and that is where part of the problem exists. If demand can not be accurately forecasted, then we end up compensating for this unknown with inventory.
Increase Manufacturing Cycle Efficiency. How well manuf
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
acturing resources are used to produce a product determines the cycle efficiency. Defective product, product rework, and long lags between manufacturing cells cause inefficiency, which can be easily calculated. Raw materials should be converted into finished goods as quickly as possible. The speed at which this occurs d
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
fines your manufacturing cycle efficiency.
Increase Supply Chain Turns. Increasing the number of times purchases are made may increase acquisition costs and unit costs because of smaller order quantities. But you will benefit by increasing your cash flow and eliminating the carrying cost of the inventory (warehousing,
Increase Supply Chain Turns. Increasing the number of times purchases are made may increase acquisition costs and unit costs because of smaller order quantities. But you will benefit by increasing your cash flow and eliminating the carrying cost of the inventory (warehousing,
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
material handling, taxes, insurance, depreciation, interest and obsolescence totaling 25% to 35%).
Eliminate safety stock. Safety stock is really just a buffer for forecasting variance and supplier delivery time. While many levels are set arbitrarily in automated MRP systems, your safety stock levels will need to be r
Eliminate safety stock. Safety stock is really just a buffer for forecasting variance and supplier delivery time. While many levels are set arbitrarily in automated MRP systems, your safety stock levels will need to be r
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
duced due to improvements in demand forecasting accuracy, manufacturing cycle efficiency and supply chain turns.
Reduce purchasing errors. This can reduce overstocking and, more importantly, minimize stock outs that result in expensive expedited purchases. Sell excess and obsolete inventory or return it to your vendor.
Reduce purchasing errors. This can reduce overstocking and, more importantly, minimize stock outs that result in expensive expedited purchases. Sell excess and obsolete inventory or return it to your vendor.
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
Eliminate delivery variance. Do not allow vendors to deliver early or late and make sure the delivered quantity does not vary from the order quantity. After all, delivery errors cause the need to carry more inventory. Instead, provide suppliers with forecasts of future needs.
Train purchasing personnel. Provide you
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
r purchasing and material management personnel with formal training. This will arm them with better negotiating skills that will result in better prices and terms.
Procedures Provide Time Savings
So, as we have seen, we should use each element of the process to extract the most benefit from our business. With ti
Procedures Provide Time Savings
So, as we have seen, we should use each element of the process to extract the most benefit from our business. With ti
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
e-saving procedures set in place, you will let your efficiency work for you.
Time Savings Provide Cash in the Bank
With well-defined processes and procedures in place, you will increase efficiency by increasing inventory turns. And of course an increase in inventory turns means an increase in cash on hand. It’s
Time Savings Provide Cash in the Bank
With well-defined processes and procedures in place, you will increase efficiency by increasing inventory turns. And of course an increase in inventory turns means an increase in cash on hand. It’s
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
there - all you have to do is grab it.
Next part of this series, we will look at finding $250,000 in Accounts Receivable - another step as we work toward our goal of 1 million in savings. So not only aim to reap the rewards of extra savings to your bottom line, but also see more cash in the bank - $1,000,000 to be exact
Next part of this series, we will look at finding $250,000 in Accounts Receivable - another step as we work toward our goal of 1 million in savings. So not only aim to reap the rewards of extra savings to your bottom line, but also see more cash in the bank - $1,000,000 to be exact
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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