Inventory management is a crucial component of an organization’s supply chain through a systematic approach of sourcing and storing inventory (both raw materials and finished goods). Managing inventory means administering the stocking and storage of goods at the right time, in the right place, and at the best price. The pandemic highlighted many problems in traditional approaches to inventory management. Here are a few tips for supply chain management as we look to the future with many unknowns and varying obstacles.
Paying attention to consumer signals
The COVID-19 pandemic has brought about a great shift in the requirements of behavioral health organizations starting with essential staff and patient safety and the undeniable need for personal protective equipment. Stil, many months into the pandemic, the demand for PPE and hand sanitizers are at an all-time high. Manufacturers saw a 250% increase in demand for products, such as sanitizers, soaps, over-the-counter medications, and other healthcare goods. To continue to operate and function safely it is important for behavioral health and child welfare organizations to keep these essential items in stock with an ample supply that will last longer than a possible short-term supply chain backup. If organizations are not prepared with COVID-19 essentials, they fail to keep up with critical safety measures for their employees and patients. This means organizations need complete visibility in their inventories. At this time, working together is important to establish strong communication channels with their distribution networks to enable accurate sharing of supply chain information to identify regional demand patterns.
Focus on Data
Maintaining proper and effective Inventory management is complex, and that means prioritizing data is crucial. Recording accurate data can be the key to success when planning for correct amounts of supplies that are in sync with your organization's goals to staying open and operating saely. Having the proper software that allows for data collection is especially important as there’s hardly any room for miscalculations. A staff member without proper PPE means a patient without proper assistance. This means organization’s have to be careful about how much they order, how it is stored and the manner in which it is utilized.
Taking care of the supplier network
As the pandemic is not ending anytime soon, it is important to have alternative suppliers to keep daily operations running at all times. Given how the supply chains starting or running through China are disrupted once every year due to the Chinese New Year, it is important for the organizations, especially the firms in behavioral health and child care, to have a Plan B. However, COVID-19 has prompted establishments to invest in more “flexible and resistant” inventory management. We need supply chains that resist disruptions, and can regain operational capabilities quickly, once the unavoidable disruption has blown past. One best way is by having additional sources of supply ready for critical items, so they can quickly and efficiently adjust according to the changing market requirements.
China, the first country hit by the COVID-19 pandemic, is a global leader in the manufacturing of most of the PPE on the market. This means if an organization has only China and East China as their primary supplier, then it’s important now to look at other potential suppliers to lessen the risk of potential supply chain blockages, and product shortages. Although cost and storage are important components of inventory management in general, the pandemic has shown that having a flexible and resilient supply chain is a critical differentiator for an organization wanting to function more effectively during this period.
If an organization does not have an accurate and reliable amount of inventory levels, then they don’t have the ability to forecast future needs. Those that do not have accurate numbers regarding inventory supplies will soon be grappling with guessing how long a particular supply stock will last, sometimes even ordering in more stock of one thing instead of the other resulting in wasted budget.
Just imagine ordering six weeks’ worth of inventory when there is an actual need for ten weeks’ of supplies. In the meantime, if a supplier shuts down business due to COVID-19 or some other reason, the chaos that would ensue would be a huge disruption in time, money and resources.
Knowing what you have -- being precise about what you have -- is really important, and where it's located is also important because some organizations have distributed inventory in multiple locations. Therefore, inventory management during the pandemic is not only critical before the vaccine goes mainstream, but also after. Because these are uncertain times, and one does not know when PPE requirements will shoot through the roof. Planning and prudence can future-proof an organization's supply chain from any such disruptions.