
Ordering seems like a pretty easy subject on the surface. A distributor needs product, so they request it from the sales support or operations team. The team picks the order and ships it out to them to sell. Seems straight forward, right? But you and I both know better…
A simple operational process like ordering is actually built on a whole series of handoffs of information. The process relies on these handoffs executing successfully in quick succession to meet the demand in the field. If one linkage in the chain fails, the sale is lost, which in this case may mean a surgery cannot happen and a patient doesn’t receive care. So the stakes are not small.
When a process breaks down there are often unintended consequences caused to the rest of the supply chain and internal resources are repurposed to resolve the problem. Let’s think through the true impact for a minute:
- Lagging Effects in the Supply Chain: If there is an issue and the order is coming down to the wire most teams will still get the order out the door, albeit late, to have SOME chance of making it to its destination. Interestingly, this may increase the impact of the problem, while only providing a slim chance of resolving it. Most likely, the late shipment will not arrive in time. So, in addition to the case being missed, you are now paying twice to ship the product there (probably overnight) AND the cost of shipping the inventory back. What’s more, think of the opportunity cost. If that tray gets sent to a case that won’t happen it cannot be used in a case that will; so in a way you’re missing out on 2 sales.
- Band-aids cost time and money: When an order is incorrect, items are out of stock, or a handoff did not occur, etc. it means that inventory may not arrive in time for a scheduled case. The most likely response is for your team to drop what they’re doing to put out the fire. But untangling and deconstructing a problem takes time, attention, and communication. Which means your team is putting other business on the backburner. How many other orders are delayed while the team must compensate for errors that occurred upstream? It’s easy to see how one exception can create more exceptions. Exceptions represent waste in your process and create opportunities for further error.
- Bad Data and Historical Records: Imagine a scenario where there was an error in ordering, but your team sprung into action to try to resolve the problem. 6 months later the hospital contacts you regarding the missed case, but you aren’t able to track down the details of what happened. What caused the issue, how did we fix it? Without an in-depth accounting of an issue, such as a root-cause analysis, you’ll have no idea what happened with that order and how to improve in the future. This is why it is critical to build visibility and tracking into your process to ensure the organization learns from mistakes and prevents their occurrence in the future.
Ultimately you decide the level of inefficiency you are willing to tolerate. If your team operates without visibility, streamlined communication, and operational standards then they’ll most likely have to continue to bend over backwards to compensate for errors and inefficiencies caused upstream. The inefficiencies you tolerate become learned behaviors; the sources of these problems learn that problems will get solved downstream, so what incentive do they have to change? When you begin to look at the rippling impacts of a single error in ordering through the rest of your business it becomes apparent, even imperative, that you work to heal your process. Look at it like a system, identify where the problems originate and trace them back to the source to find your intervention point and then take action.
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