Guest Post: How Distributors Can Meet Consigned Inventory Cost-Reduction Targets
With the volatile supply chains sparked by COVID-19, many distributors were forced to thoroughly analyze inventory levels and reduce expenses ...Read Post
WHEN BRIAN GALOWITZ STARTED AS OPERATIONS MANAGER AT LAKES REGION EMS THREE AND A HALF YEARS AGO, the advanced life support ambulance service was still using a disjointed collection of 20th-century methods for tracking inventory and supplies. “Everything was in an Excel spreadsheet or a Word document somewhere. There was no logic to it,” Galowitz said.
Ordering and inventory replenishment for the ambulance service’s five bases were done “kind of by gut feeling,” he said.
With people in the rural Minnesota and Wisconsin counties served by Lakes Region EMS depending on fully stocked ambulances to deliver life-saving treatment, Galowitz recognized that he needed a more efficient, reliable system.
His initial research turned up inventory tracking systems marketed by large companies, for large companies. And there were small systems for very small companies. Neither quite matched Lakes Region’s needs. But eTurns’ TrackStock automated inventory replenishment solution fit just right. “eTurns started to get our attention because the price point was good, it had the functionality we were looking for, and it seemed intuitive and user-friendly,” Galowitz said.
Implementation went smoothly and within weeks, the eTurns system was up and running. And Galowitz quickly recognized that the TrackStock system delivered much more than an organized inventory replenishment system. Within months, the eTurns app produced documented savings in both dollars and time, and resulted in a nearly automatic re-ordering process that virtually eliminated Galowitz’ need to search for supplies on the internet. It is also providing information that could lead to improved patient care.
Thanks to data provided by the eTurns app, Lakes Region EMS was quickly able to reduce its inventory by 73 percent – which translated to an immediate savings of roughly $20,000 in inventory from their initial position, Galowitz said. In most other enterprises, the inventory reduction and savings might be even greater, he said. But Lakes Region EMS is in the business of saving lives, which means that sometimes efficiency isn’t the top priority. “We make it hard for ourselves to be truly efficient because of how we’ve chosen to manage convenience and because we’re making sure we’re mission-ready. But this has been huge.”
Before implementing eTurns, Galowitz said taking inventory usually consisted of a 20- to 30-minute walk around the stockroom, “looking at bins and saying, ‘Yeah, I probably should get some more of those.’” And that determination was not based on data, but on “using historical knowledge and making a guess and then working up an order.”
That’s not how inventory works at Lakes Region EMS anymore. Now, inventory replenishment is based on information provided in the eTurns report. “Today, keeping our stockroom organized and supplied is probably a 10-minute task,” Galowitz said. Galowitz said replenishment now rarely even requires physically visiting the stockroom, because the eTurns reports provide a clear picture of the agency’s needs. “Now, it’s all sorted by bin number and part number and the process is just copying the part number from one screen to another,” he said.
With the eTurns system, replenishment is so automatic that Galowitz has no reason to look to other suppliers when he’s about to run out of an item. Previously, he spent time searching different websites, checking whether items were still available, poring over spreadsheets to find the right item code or SKU, and matching usage reports from the agency’s two companies and five bases. With the eTurns system, all that is now a five-minute process, and one that no longer includes shopping on the internet.
“I feel like my time is better spent working on other things than trying to save a few cents on an item. So, if it means I don’t have to set up a new vendor or our accounting people don’t need to put a new vendor into the accounting system, then I am going to spend a few cents more to stay with a primary vendor. We’re getting close to becoming automated with Henry Schein, our primary supplier,” Galowitz said.
The ability to reorder with medical supplies distributor Henry Schein through the eTurns app has not only resulted in significant time savings for Lakes Region EMS, it also has strengthened the agency’s relationship and resulted in greater spending with that distributor, Galowitz said. It also means Lakes Region would be reluctant to enter a relationship with a distributor who didn’t offer replenishment through the eTurns app, Galowitz said. “That would be a decision factor for me,” he said. The system has created substantial time savings in the accounting department, as well. The accountant previously devoted hours to reconciling inventory reports from the different companies. “Then she would have to add it up on the spreadsheet and put that entry into QuickBooks. Today, that’s two minutes of pulling a report,” Galowitz said. “And, I know the data is more accurate.”
By implementing the eTurns app, Lakes Region EMS also has gained the ability to track medication expiration dates, and, if necessary, detect theft – both capabilities the ambulance service did not have previously.
But the benefits extend beyond efficiency and cost savings within the walls of Lakes Region EMS’s five bases, to supporting the ambulance service’s mission: state-of-the-art patient care on the 5,000 to 6,000 calls it responds to each year; outstanding customer service; commitment to the communities it serves, and financial health and responsibility.
Through the data provided by the eTurns app, Lakes Region EMS has been able to begin building its knowledge of how particular supplies are used on specific calls. For example, Galowitz said they are building data on whether all emergency technicians are using the same supplies, and using them as correctly and efficiently as possible, when responding to common medical calls, such as cardiac arrest. Galowitz foresees building training sessions around the information provided by eTurns. “If we start identifying patterns where people are making mistakes with equipment use on calls, we can hopefully be better at our jobs.”
And while the eTurns app has provided substantial improvements to Lakes Region’s operations and efficiency that can be quantified, that is one, Galowitz said, that you can’t put a price on.