We are in an age where companies want to minimize inventory, where just-in-time planning is the norm, and where there can be fines for delivering early or late. Companies and providers may not carry assets or stock, yet they provide services using cars, hotels and even surgical equipment that they do not own à la Uber, Airbnb and others.
Consignment orders apply to the life sciences and medical device space though it’s not unique to this industry. Hospitals do not want their capital tied up in medical devices sitting on the shelf. Space is often at a premium so the trend is for field sales representatives to carry inventory and, in some cases, third parties hold the stock close to the hospitals ready for delivery the night before or morning of a surgery.
Medical device companies often employ graduate or master degree holders in their Customer Service Representative (CSR) teams. They need intelligent team members that can understand their complex products and fix complex supply chain issues. In order to free up these CSRs to do valuable service and proactive work that helps improve patient outcomes and ensure customer SLAs are met, these companies often turn to sales order automation.
Automation is desired, but if that technology cannot handle consignment orders, it often means less adoption potential and a big hole in the ROI for the project. Consignment orders can represent as much as 40% of order volumes. Our customers have shared that a key reason they chose Esker was the ability to handle consignment orders. Real-time integration into their ERP is mandatory as the order from the customer is often missing information they need in order to process the order.
Medical device products are serialized and tracked for compliance purposes yet the order from the customer is often missing serial numbers, LOT numbers and other details such as materials used, specific product make up and original ship-to details. These details are available in the manufacturer’s ERP and real-time integration will pull back this information for the CSR to validate even though it was not in the customer’s order.
Automation should always include consignment orders, otherwise, problems are to be expected. This is something Dave Piasecki explains in his inventory blog. Automation done right will help the manufacturer cut order entry time and help prevent accounts receivable credits due to billing errors caused by mistakes in the sales order process.
You can learn more about sales order processing automation, including for consignment orders, by watching the on-demand webinar. Reducing Costs & Retaining Customers: How Sales Order Automation Cuts the Bull to Free Up Resources for What Really Matters.