Expect the Unexpected: Identifying Outliers in Your Supply Chain

By Barry Holleman

As a healthcare supply chain professional, you want to support your organization’s strategic imperatives by becoming more agile, precise, and proactive. You understand the impact your department can have on improving cost, quality, and satisfaction, but too many visibility gaps stand in your way. You know outliers exist within your vast ecosystem that drive expenses up, but your team lacks the time and resources to find and resolve them before it’s too late, when the invoices are due.

Sound familiar? When it comes to the supplies and medications your clinicians and patients use, it’s important to know what’s going right, but imperative to know what’s going wrong. We frequently hear about the challenges of  identifying and correcting for outliers in our conversations with supply chain leaders, and for good reason. Outliers – or exceptions to what is expected and forecasted – can cause all sorts of induced errors in the system and can be quite costly.

In complex systems, with disparate data sources it is hard to find outliers with basic statistical modeling tools such as spreadsheets. These are not only labor-intensive, slow, and limited in scope, they are also prone to errors in data entry and scaling. Such errors can lead to unseen outliers in some places and exaggerated outliers in others.

Time is of the essence, so you need timely insight. What good does it do to find out from an invoice that a $30,000 device was ordered for one surgeon, while the rest of the surgical team uses a $10,000 device for the same procedure with great outcomes? Likewise, shouldn’t you have a way of knowing before you order if the price is significantly increasing, or if a stockout is likely because of current or impending spikes in demand? And, if there are issues in product delivery, you might not be able to ensure the same continuity in care if you can’t spot the problem in time.

Tech-Enabled Decision Support for Healthcare Supply Chains

Unless your team is overflowing with time and resources (which would make you quite an exception in your own right), you can’t identify outliers accurately with human-led calculations and observations alone. You need artificial intelligence and machine learning to amplify human intelligence. In other words, you still make the decisions, but smart technology unlocks the information you need to make the right choices at the right times, every time.

Fortunately, the technology is here and readily available. You won’t find it in an ERP or other information system because today’s IT systems lack the capabilities to show outliers proactively, especially on rapidly changing data points like price variances. The holistic, timely view you need requires specialized software capable of integrating and scrutinizing all relevant data sources (clinical and financial), performing checks and balances, and providing alerts and alarms in an analytical dashboard that make it easy for you to make  short-term corrections and impact future decisions for the thousands of products and players in your supply chain.

DemandAMP+ provides all that functionality and more. Developed exclusively for healthcare supply chains and available as a secure, cloud-based AI-as-a-Service solution, DemandAMP+ provides the visibility you need to see and address outlier concerns over the next week, month, and year. This intelligent automation fuels better decisions with an easy to understand traffic light dashboard that indicates the severity of the outlier (red, yellow, and green – with red indicating urgent action is needed). As a result, you can:

  • See trends for the next 7, 30, and 365 days to know at a glance if increased demand for a product is expected
  • Compare past consumption to anticipated future consumption, spotting outliers with ease
  • Look at inventory for any specific product and see outliers for the number of days of stockout over the last year

With this insight at your fingertips, you can more quickly identify and address outliers in spend, pricing, ordering, and delivery to improve supply chain outcomes while lowering costs. In doing so, you will create more nimble, responsive, and resilient operations while elevating the supply chain as a strategic pillar for the enterprise. Contact MUUTAA today for more information.

About the author

Barry Holleman is the Chief Operating Officer and Cofounder of MUUTAA, a healthcare AI company focused on patient-driven demand for clinically integrated supply chains. With more than two decades of global healthcare technology experience, Barry specializes in healthcare supply chains, healthcare logistics and automation, health IT, and pharmacy logistics. A results-oriented leader, he has helped spearhead market adoption of innovative technologies in healthcare across the European Union and North America. To contact Barry, email barry.holleman@muutaa.com







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