Demand amplification - Bullwhip effect — Transcript

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1. 0:04your supply chain has many steps
2. 0:06disrupting any one of them can lead to
3. 0:09critical shortages for costly overstock
4. 0:11either of which can impact patient care
5. 0:14one kind of disruption is called demand
6. 0:17amplification or the bullwhip effect
7. 0:19this happens when end-users such as
8. 0:22hospitals reacting to changes in demand
9. 0:24over or under order supplies in response
10. 0:28distributors and manufacturers change
11. 0:30their orders the difference between
12. 0:32projected and actual needs grows larger
13. 0:35with every step resulting in too much or
14. 0:38too little inventory for everyone in
15. 0:40theory managing your supply chain should
16. 0:42be relatively simple order 100 use 100
17. 0:46reorder a control and predictable
18. 0:48paddock of course it's never that easy
19. 0:51first the product may not be delivered
20. 0:54in the amount you need you need 17 per
21. 0:56week but it comes in lots of 20 so some
22. 0:59weeks you order one lot some weeks to
23. 1:01some weeks none also predicting demand
24. 1:05can be difficult due to such things as
25. 1:07seasonal illnesses or an increase in
26. 1:09optional procedures once patients meet
27. 1:11their deductibles later in the year in
28. 1:13general demand varies for four reasons
29. 1:16first increases in your Hospital census
30. 1:19effect demand then there is clinical
31. 1:21practice each health professional works
32. 1:24a little differently uses different
33. 1:26products seasonality your needs change
34. 1:28during flu and allergy seasons finally
35. 1:31demographic changes such as college
36. 1:34students heading south during spring
37. 1:35break and older adults following the
38. 1:37seasons impact demand hospital census
39. 1:40clinical practice seasonality and
40. 1:43demographics each caused a man to change
41. 1:46affecting your supply chain now consider
42. 1:49that each is always changing creating
43. 1:51complexity and often dramatic
44. 1:53fluctuations in demand let's look at a
45. 1:56hypothetical example of how it works
46. 1:58phoo season is predicted to be worse
47. 2:00than expected demand rises for
48. 2:02respiratory products and patient use
49. 2:04increases from four cases to wait since
50. 2:07you expect an even stronger flu season
51. 2:09you order 16 cases more than needed so
52. 2:12you don't run out your distributor sees
53. 2:14your order for 16 cases so they react
54. 2:16and order 32 cases from the manufacturer
55. 2:19excess ordering extends and is amplified
56. 2:22throughout the supply chain each step in
57. 2:24the supply chain over reacts to ensure
58. 2:27that they have adequate inventory to
59. 2:29meet the demands of their customers now
60. 2:31consider that other hospitals are also
61. 2:33over ordering what's more there's not an
62. 2:36endless supply of product hospitals can
63. 2:39order so much that suppliers simply
64. 2:41can't keep up and supplies run up that's
65. 2:44demand amplification and the results can
66. 2:47be costly inadequate inventory means you
67. 2:50don't have supplies when you need them
68. 2:52excess ordering means you have inventory
69. 2:54you don't need and that may become short
70. 2:56dated and expired
71. 2:58you're also tying up financial resources
72. 3:00paying for and storing all that
73. 3:02inventory that was just one example
74. 3:05think of the thousands of items in your
75. 3:07supply chain and how demand variation
76. 3:10affects them these variations may seem
77. 3:13unpredictable but with the right data
78. 3:15and analytics you can see and predict
79. 3:17patterns and trends in your using we
80. 3:20can't eliminate changes in demand but
81. 3:22understanding them allows you to react
82. 3:24appropriately and help control demand
83. 3:26amplification and controlling that helps
84. 3:30control costs a must for every hospital
85. 3:32cost such as storing and transporting
86. 3:34excess inventory costs of wasted
87. 3:37resources if out-of-date supplies must
88. 3:40be discarded and staff costs because
89. 3:42less time counting inventory means more
90. 3:45nursing time at bed sites considering
91. 3:47the potential savings you have to look
92. 3:50at your supply chain and ask do we have
93. 3:52visibility to data that allows us to see
94. 3:55patterns or trends
95. 3:56are we overreacting to one-time
96. 3:58variations because we like visibility to
97. 4:01key data at Cardinal Health we want to
98. 4:04partner with you to simplify inventory
99. 4:06management to help you better understand
100. 4:08demand patterns to gain visibility to
101. 4:11data that helps you more accurately
102. 4:13assess true variations cardinal health
103. 4:16inventory management solutions can
104. 4:18provide you with the right inventory
105. 4:19management tool and the data analytics
106. 4:22software to allow you to see predictable
107. 4:24trends for both lower cost consumable
108. 4:27products and high cost physician
109. 4:29preference items let us show you how you
110. 4:31can more effectively manage your supply
111. 4:33chain