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Across the board, wholesalers are moving toward inventory optimization – and that makes sense. They’re holding just enough inventory to match demand projections, opting to stay lean and efficient. But while this is the right move for their business, any type of aberration that impacts shipping or demand can cause some serious heartburn for manufacturers, ultimately affecting pharmacies’ abilities to stock product.
It’s up to manufacturers to understand how to operate in an inventory optimization environment and keep up frequent communication with their wholesale partners. To best mitigate pharmacy out-of-stocks there are 6 key steps manufacturers can take.
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1. Use your tools.
Days-on-hand averages (both at the aggregate level and the wholesaler distribution center level), seven-day sales averages, variations from forecast – be sure you’re using every data element that’s made available to you to better manage and understand the channel. Data aggregators are an excellent partner in this endeavor. Customizable charts, graphs and key performance indicators can be provided or created via their platforms. Dynamic dashboards can be updated as frequently as manufacturers receive wholesaler data.
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2. Be weather wise.
When inventory is optimized, a weather event could severely limit access. Your wholesaler may not be aware of weather events that could delay shipping and impact a pharmacy’s ability to stock product, so it’s up to you to stay alert and communicative. If you know there’s an ice storm or some other severe weather poised to hit where your 3PL is located, work with your wholesaler to increase your orders in advance. Severe weather at one of the central wholesaler facilities or at a transportation hub such as Indianapolis or Louisville should always be considered as well.
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3. Overcommunicate during product launch.
If you’re in a product launch phase, communication with your wholesale partners is especially important. Proactively show and share growth trends across your product line during launch, making your wholesalers aware of changes that may be happening regionally, nationally, or organically.
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4. Don’t miss marketing moments.
Are you going on TV? Have a pending media placement in a top-tier outlet? Planning a direct-to-consumer launch? High-impact marketing tactics like these have the potential to directly affect product demand, and therefore could cause a pharmacy out-of-stock if inventory is adjusted in advance. Share this information with your wholesaler to make sure you stay ahead of demand.
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5. Consider new indications.
New indications on your drug could affect overall sales. Don’t miss the chance to connect with your wholesaler to ensure more product is made available as your patient base expands.
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6. Adjust for new sales reps.
If you’ve recently added a new sales rep to a territory, it’s time to start a conversation with your distribution center for that area. Additional reps might mean a significant growth in sales – good motivation for your wholesaler to increase available stock for that region.
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Wholesalers are working with thousands of manufacturers, and it’s unrealistic to expect them to track all of these factors (and more) for every single partner. At the same time, monitoring and communicating any potential disruption can be fairly overwhelming for manufacturers with a hundred other things to think about daily. That’s where Trade Management comes in.
Trade Management and Trade Operations keep an open and frequent communication stream with wholesalers, providing them with actionable insight to guide inventory management.
Two Labs provides best-in-class Trade Operations and Trade Management support and we have a proven track record of improving channel operations for the manufacturers that work with us. For any inventory issues we can’t prevent, we have a solution for that too. Our Trade Management app makes it easy for sales teams to address pharmacy stocking issues on the spot.
In less than two minutes, sales representatives can submit trade issues for triage using a digital escalation form. Plus, our app is integrated with our EHRx Solutions service. It can help resolve product listing and other EHR issues sales teams encounter when physicians can’t find products for e-prescribing.
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Need a Trade Management partner to help mitigate inventory issues in an inventory optimization world? Click the button below to get in touch.
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