Everything You Need To Know About Allocations

September 21, 2020

By Darlene Santos Senior Account Manager
Back-orders and allocations are inevitable in any industry, and especially susceptible in the medical industry. With such a high demand for supplies, manufacturers either do not make a sufficient amount of products to match the rising number of sales or distributors warehouses underpredict how much stock would be needed. Sometimes, unforeseen natural disasters occur, leaving manufacturers and distributors without the opportunity to fulfill any orders. In 2018, there was an IV bag shortage due to Hurricane Maria in Puerto Rico; the Hurricane “amplified the IV bag shortage, in particular, sodium chloride 0.9% injection bags, which are ubiquitous in medical facilities and hospitals”. As a result, clients (in our case, physician offices, surgery centers, medical spas, biological laboratories) were left at large, scrambling to find any distributor with remaining stock to avoid disruptions in procedures. As the client, using a few simple strategies you can ensure some protection against back-ordered items and or during times of allocations. Of course, the following tactics are not absolute, but they offer a bit of peace of mind in times of need. Below are some ways that you can be empowered and ensure stock for your business:

1. Loyalty to one Company

Using a single platform to fulfill all the orders from your medical practice will save you time, money, and help you establish a definitive buying history. In our industry, order histories serve as a way for buyers to collect data and make a judgment call on the amount of stock needed for each warehouse. By having loyalty to a single company, you will be dictating an exact and precise buying pattern, thus indirectly assisting the buyers in making more accurate predictions to meet the sales demand. During times of allocations, if an account has loyalty to a company, a spending history will provide a cushion of security because there will be a high probability that those items will be in stock even if nobody else has them. Often the company will provide loyal customers an allocated number of products to help them through shortages. Again, this is not a guarantee, but from experience, those who have a dedicated spend usually have protection over those that do not.

2. Custom Packs

Creating a custom package can save your practice money in the long run. Practices that use custom packs (not to be confused with off the shelves pack) have stock available for up to ninety days. Let’s put this in perspective. Lately, gowns and surgical masks have been on allocation and are very difficult to obtain. The practices that use custom packs are not concerned; they have stock of surgical gowns in their custom packs for up to three months, meaning that they can use that time to work with their Account Manager/sales representative to come up with a solution to the shortage. Or, sometimes clients can get through the shortage by using the custom packs. The surgeons of these practices are not worried about having to store dozens of cases of gowns in their facility or canceling surgery because their custom packs are their property (the custom packs are available at any time). doctor work on digital tablet healthcare doctor technology tablet using computer in a modern office t20 eVdlK2 scaled e1581975323781

3. Establish a relationship with your Account Manager

Account Managers will work towards finding alternatives to products that are not available. For instance, Account Managers at Pipeline Medical serve customers as their defect Material Manager, knowing the tips and tricks to navigate the industry and find solutions for the practice’s problems. Informing Account Managers of any changes in your practice that might alter your ordering pattern will ensure a seamless supply of products. Keeping the lines of communication open with your Account Manager can help benchmark your business to ensure stability in products ordered, assurance in quality, as well as providing connections to contracts that can help increase your bottom line.
by Kinza Khan
by Kinza Khan

September 21, 2020