No drugs at any price? Geoffrey Joyce, PhD, believes the escalating drug shortage problem illustrates a major shortcoming of capitalism. He says the problem boils down to the nature of the pharmaceutical industry and how differently the markets for brand and generic drugs operate. Current shortages include widely known drugs such as the antibiotic amoxicillin; the heart … [Read more...]
Search Results for: replenishment
Yellow’s exit predicted to raise overall shipping rates
Commentary The cost of fulfillment is a considerable factor in what veterinary clinics and retailers pay at the point of sale especially when measured as a percent of net income versus gross sales. In recent weeks we have urged animal health pros to consider improving replenishment planning, adjust inventory levels and to better understand how the cost of moving products … [Read more...]
Identifying and controlling the hidden costs of veterinary inventory
Complimentary Commercial Content Beyond a good explanation of ABC inventory groupings, this article identifies two hidden inventory costs: ordering costs and holding costs. Ways to use an online pharmacy to help control costs and service clients using home delivery are also presented. Source: Vetsource. Link. INSIGHTS: Inventory management is an important role for … [Read more...]
Last-mile delivery race is a losing proposition
Commentary The Forbes article linked here provides context for animal health pros as our industry deals with growing resupply costs while holding margins in line to service animal owners. By land or drone, the retail industry is waging big money on last-mile delivery timelines. The prospect of a return on investment seems murky at best, shares Greg Petro. He describes the … [Read more...]
Each time you place an order for a product, the labor cost is $17.25
Complimentary Commercial Content In a recent post, Nicole Clausen, CSSGB, CCFP, CVBL, takes a non-traditional approach to calculating cost per SKU when replenishing inventory in an animal hospital. Using a loaded cost of $23 per hour for inventory personnel, she estimates 45 minutes to order, unpack, receive, record, pay the invoice and keep track of an item each time it is … [Read more...]
Petflation: Inflation’s impact on pet industry
Inflation is strong in the pet market says John Gibbons. The Consumer Price Index has shown four straight months of double-digit, year-over-year monthly percentage increases. These are the first increases of more than 10 percent since 1981. We’re sharing quotes from two sources that present economic trends in the animal health industry. Inflation historically affects pet … [Read more...]
Chewy behind Amazon, ahead of Walmart in automatic reorders
Forty-four percent of Chewy’s customers are enrolled in its Autoship program, which lets customers specify when they want replenishment orders. Those customers spend considerably more than others who shop on Chewy.com. Autoship customers buy $820 per year on average from Chewy versus $423 for other Chewy customers. They buy 15.5 times annually versus 10.4 times and spend $53 … [Read more...]
5 employer strategies to help with rising inflation
Includes Commentary Inflation rose 8.5 percent year-over-year in March, the highest inflation rate since 1981, according to the U.S. Bureau of Labor Statistics. Employees are now looking to their employers for help as inflation challenges their lives, says Kathryn Mayer. She offers five ways employers might address inflation challenges. Coupled with the current … [Read more...]
Meeting inventory needs a year later
Opinion Looking ahead through July, can you trust purchase history and forecasts?” – Kirk Augustine ABSOLUTELY NOT! The pandemic shutdown began a year ago. Replenishment slowed to a near halt. Inventory items on hand were motionless until late May or June. Now a year later, our industry has adjusted through curbside services, tele-everything and animal owners have migrated … [Read more...]
Grouchy clients, stressed staff, but business is growing
The VHMA’s tracking surveys are often revealing. June 2020 versus June 2019 numbers look strong, even in the shadow of a possible recession. Practices are reeling from the cumulative disruption from the pandemic but gaining ground against previous shortfalls. About 53 percent of practices never changed their hours of operation and another 25 percent did, but have returned to … [Read more...]
Part 2 – Inventory adjustments needed during disruptions
Feedback from our original post on inventory management is strong. AHD founder, Kirk Augustine offers an update to his original paper. He identifies supplier issues and resets to reorder points during a prolonged disruption period like we’re currently experiencing. Source: Animal Health Digest, April 16, 2020. < Link > At the four- to six-week point in a disruption … [Read more...]
Adjust inventory to account for supply chain disruptions
Original material from AHD The COVID-19 situation is stressing various supply chains. Adjustments to inventory management, especially for SKUS needed for caring for animals, will be critical for the foreseeable future. AHD founder, Kirk Augustine has helped develop and teach inventory management curricula for veterinary teams. He created a short inventory management paper … [Read more...]
Recycling is broken
Waste is an enormous problem. But, recycling is the wrong solution, writes Don Norman. The real culprit in the story of recycling is failure to identify the core, underlying problem. Recycling is the symptom, he says. The underlying problem is the design and manufacturing of so much stuff that must be discarded. Recycling is a poor attempt to solve this problem. Source: Fast … [Read more...]
Opinion – Keyboards could become obsolete with AI
Artificial intelligence (AI) seems more like an oxymoron than reality. Weird e-mails, robocalls and web pop-ups are already the products of rudimentary AI applications, as well as Siri and Alexa. Ian Heller offers considerations about AI being used in ordering and replenishment platforms. It is worth thinking about in the context of inventory replenishment and … [Read more...]
Be aware of accounts that eat your lunch
Randy MacLean explains distributors’ challenges of big accounts and the financial consequences of servicing them. It is a familiar story of top-line revenue versus cost-to-serve, fixed-cost conundrums that have long-been prevalent in animal health markets. It is also a situation common to livestock veterinary clinics and retailers that is exacerbated by ongoing consolidation … [Read more...]
Amazon embraces chaos for its efficiency
Amazon is an eight-ton gorilla that animal health pros watch, fear; yet use for personal purchases. Sara Kessler writes about the company’s elaborate systems that have completely redefined warehouse efficiency and customer convenience. Much of the efficiency is supported by technology, robotics and ultimately moving product to people, rather than moving people to the products … [Read more...]
Opinion – Adjust ROPs and EOQs for the holidays
The rise of e-commerce and the growing instant gratification consumer mentality has exacerbated the need for early and thoughtful peak season preparation. This article is a reminder to adjust inventory on-hand settings and replenishment timelines for critical items in animal health inventories. Halloween will not create much disruption, but it does signals the upcoming holiday … [Read more...]
Rising shipping costs coming
FTR, a transportation forecasting firm, believes that shipping rates will increase soon as available capacity will be negatively impacted by economic conditions while a new regulatory drag will affect the trucking industry in 2017. The firm predicts that current wave of new regulations will last at least through 2019, which could see the Shippers Conditions Index drop to new … [Read more...]
Sales increase when using real-time customer data
Forrester Research, Inc., reported findings from a new, summarized in a report titled How B2B Sellers Win in the Age of the Customer. Sellers using what the study calls an evolved selling model had better results, which the report attributed to four key factors. They are: the ability to assemble and present content from various online sources on the fly the seller’s … [Read more...]
Editorial – Manage product deliveries efficiently
Amazon will soon deliver to businesses and homes. If we accept that a 2 full-time DVM equivalent veterinary hospital places 10 orders weekly to replenish its inventory, then it is likely that those orders will arrive in 20 to 25 different boxes. Some of these boxes come via UPS, FedEx, U.S. Postal Service and some from distributors or manufacturers. This can add up to three … [Read more...]
Alternatives to in-house product sales
Alan Newport reviews the trend of product sales moving to sources outside of clinics. Though directed to livestock veterinary practices, the key points are valid for all practices. Source: Beef Vet, Fall 2016, page 24. Newport addresses three choices: Stop actively marketing drugs and supplies Write prescriptions to be filled from an online pharmacy Partner with … [Read more...]
Inventory availability critical to distributor relationships
Eric Jensen shares his thoughts on how customers value distribution based on a survey of wholesale distributors. The results place inventory availability nearly as important as relationships. Technical support ranked third, while delivery time and price ranked fourth and fifth, respectively. Source: Industrial Distribution, August 12, 2016. If you are a distributor, while … [Read more...]
Editorial – Home delivery still growing
Articles about opportunities in the pet retail business often make me scratch my head. How can retailers get so excited and veterinary hospitals remain blasé’. For nearly 15 years, veterinarians have been offered opportunities to use various home delivery platforms to auto-fulfill standing prescriptions, brand diversity in large categories and specialty products. Yet, these … [Read more...]
Editorial – Online shopping destroys customer engagement
Our industry works hard to build, improve and provide customer-initiated systems for ordering and replenishing products, as well as easy access to transaction records and history. As the number of Amazon-like services increase, I am increasingly concerned about how well animal health companies understand the dynamics of de-personalizing the day-to-day transactional business on … [Read more...]