Main Subject - Business

Businesses around the world spend millions of dollars on software and inventory management systems in an effort to maximise their return on investment (ROI) from inventory. Until now even the most soph

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

isticated of these systems left businesses way short of best practice. In fact most of these systems institutionalise excess inventory.

The problem is that most software relies on optimisation and thi

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

s limits the opportunity to reduce inventory because it ignores external influences. Software can only optimise the values it has, not what could be.

World's best practice inventory management demands

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

that the ‘management system’ is optimised not just the inventory. Most inventory software takes today’s data and runs an algorithm to optimise holdings. What they miss are the changes in the management

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

system that could further reduce the total level of investment. This flaw makes software systems self-limiting in their results.

Inventory management is much more than just the software system. Inven

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ory management is the combination of know-how, process, measures and reporting that together provide the opportunity for maximizing availability while minimizing cash investment.

The five reasons why

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

your inventory management is not best practice and is costing you money are:

1. The Responsibilities Are Misaligned

The people that make the day-to-day decisions will typically n

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

ot be responsible for the working capital outcomes; they will be responsible for availability. The problem is that if you run out of stock all hell breaks loose but if you overstock there is no repercu

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

sion. This is especially the case with indirect inventory that is not subject to the usual planning scrutiny. Given this, what do you think most people do? That’s right, they over stock!

2.

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

The Optimization Is Incomplete

Sophisticated software can track all sorts of data and in many cases the software can make optimization decisions based on that data. This can reduce your inv

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ntory but it is self-limiting. The problem is that software optimizes only on known data and ignores process and behavioural changes that can impact that data. This is software optimization not system

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

optimization. The software should only be a tool within a bigger process of optimization.

3. It Is Managed Reactively

Inventory is often seen as ‘set and forget’, that is, once t

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

he item is optimized for the current situation the requirements are not systematically revisited. It is often only when there is a ‘cash crunch’ or some other emergency that action is taken. Yet, even

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ndirect inventory can represent millions of dollars of investment and deserves frequent attention. When action is taken it usually addresses the highly visible items rather than the real ‘cash burners’

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

.

4. There Is A Significant Time Lapse Before Problems Emerge

The number one question asked about inventory is ‘what do I do with slow moving or obsolete stock?’ Depending upon t

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

e accounting policies in your company this stock has taken 3–5 years to reach the point where that question is asked. By this time it often seems irrelevant to revisit the original decision or processe

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

s that produced this result. No one would accept this approach to quality management! No one ever asks ‘how do I prevent the accumulation of slow moving or obsolete stock?’

5. It Is Painfu

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

l To Fix And Easy To Ignore

In most cases the removal of obsolete inventory will result in a ‘hit’ to the profit and loss account. However, if a reason can be found to justify it for another

.

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

ear then few will argue. Eventually someone is going to have to make a decision and it will be painful. For this reason, obsolete inventory decisions are often driven by the opportunism of results repo

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

rting rather than good management principles.

To truly achieve best practice your organisation must review these issues and develop systems that will minimize their impact or eliminate them altogether

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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If you own a business, you also have to install a communication system to run it. It is simply unthinkable to run a business without the right type of communication system, which is the backbone of your business. Each and every member of your staff needs to have a telephone or other communication device for running business operations smoothly.

When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise that it distracted them. So the teacher ordered that the cat be tied up during the evening practice.

The best sales person is a happy customer; it sounds trite, but a happy customer is much more believable than your best sales pitch. If only you had more of them.

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