Commentary
The impending UPS strike is a signal for veterinary hospitals to plan ahead. While we can hope the strike ends without delivery disruptions, adjusting inventory levels sooner rather than later is a solid strategy ahead of the August 1st strike date. For “A” and “B” products critical to day-to-day functions, moving reorder points to create a 30-day to 45-day on-hand inventory is advisable*. While FedEX and USPS may be able to pick up some of the volume, just-in-time delivery is likely to be less dependable.
The last UPS worker strike occurred in 1997 . . . it caused a 2-week shutdown of operations.”
Amid negotiations with UPS union employees, the company is taking preemptive actions to keep packages moving. The temporary plan is to train non-union employees in case drivers strike to make sure deliveries of goods and medications are not affected. If an agreement is not reached, a strike could occur August 1.
Source: CBS News Texas, July 16, 2023. Link.
*Note: For a SKU that has an average monthly use of 36 units, the current reorder point (ROP) is likely 24 units with an economic reorder quantity (EOQ) of 24. To plan for carrier disruptions and possible runs on available inventories at distributors, consider moving the reorder point to 36 units. In many cases managing ROP = EOQ supports always having items on hand when needed . . . never running out of a key SKU.