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Inventory Optimization for Measuring and Test Equipment (M&TE) - Developing a Plan

12/05/2016 : 0 Comments  

This is the second in a series of blog posts that documents our journey in identifying and developing a plan and process for optimizing the inventory of measuring and test equipment (M&TE) at a large electric utility. In the first post we talked about identifying the problem. As Charles Kettering once said, “A problem well stated is a problem half-solved.”

Our problem simply stated was not knowing what level of inventory we needed to maintain for each of the over 2,000 models of M&TE we had to ensure availability under differing demands, while at the same time avoiding excess inventory and annual calibration costs. We also knew that our existing M&TE management database could not easily provide us with the answers.

One option was to try to develop the analytical tools in-house. As an engineer I’ve always been tempted to try to do it myself, but fortunately with age, some hard knocks, and sound input from my staff we took the wiser path and decided to look for outside expertise. The question then became which outside resource could best meet our need within our budgetary constraints?

We first developed a list of criteria that were important to us relative to the solution we would be seeking. These criteria were:

1. We needed a software solution that would interface with our existing database and not require us to adopt a whole new database solution for managing our M&TE program.
2. We needed a fully functional solution capable of being quickly and easily implemented but one that could be fully automated if we ever needed that capability.
3. We needed a service provider with the technical expertise to help us navigate through and meet all out corporate IT and cyber-security requirements related to the use of third-party software.
4. We wanted a service provider that would partner with us to ensure we obtained the results we needed, would provide hands on training, and would take a personal interest in our success.

As a regulated utility our procurement process required us to evaluate a number of suppliers to ensure our selection was both cost effective and based solely on merit. We therefore did a search of software solution providers and identified a number of products that appeared to be a potential fit for our need. Preliminary inquiries were made and the list was reduced to five potential candidates whom we determined had offerings capable of providing the analytics we were seeking.

More detailed inquires were made and it became apparent that three of the five solution providers would require us to adopt their inventory management system in its entirety in order for us to use there analytics modules. This left two provides whose solution would work with our existing M&TE database.

We set up detailed phone and then face-to-face interviews with both providers. We provide each with a sample of our data and asked them to demonstrate a solution based on our need and the data provided.

Both providers were able to demonstrate their software could determine basic usage patterns over time for individual model numbers based on various parameters we provided and both had acceptable graphical representation of the data. We made our final selection based on a comparison against our initial criteria.
Criteria 1 – As noted, both the two finalists met the first criteria of being able to integrate with our existing database.
Criteria 2 – Both had solutions that could handle all our current and future anticipated needs, but Invistics offered a simple initial solution which would get us up and running with less front end effort. They also detailed how they could fully automate the process when and if we desired but noted we might find the base solution was all we would ever require. The Invisitics solution also had the advanced analytics we were looking for as part of the base package. The other provider’s product appear to involve much more extensive front end set up before results could be obtained and they indicated that, “they were sure their product could do the analytics, but it might involve another module and some integration on our part.”
Criteria 3 – We felt both providers could provide the necessary interface with our corporate IT and cyber-security folks based on their existing client base and their answers to our interview questions.
Criteria 4 – Invistics showed a keen interest in understanding exactly what we were trying to achieve and provided a plan where they would work closely with us to craft the correct solution and provide us hands on training. The other provider indicated that while they could get us started, “their software was easy to use and they had on-line tutorials which would guide use through the process.” They seemed to be offering a more hands-off approach to partnering and support.

From a cost perspective both base solutions were comparable, but it appeared we might need an additional module from the other provider if we wanted the complete analytics we desired. That module was not included in the quoted price. The package Invistics offered would fully meet our need as quoted, but if in the future we decided to fully automate the process there would be some incremental increase in cost.

Based on all the factors, we chose the Invistics solution. The main driver for us was the sense that Invistics wasn’t just selling us a software solution, they were partnering with us to craft a solution that met our specific need and would be working with us to ensure our success.

Part III of this blog will share how the contracting, initial set up, and training went, and how Invistics helped us meet our initial objectives.

  

Death, Taxes and DEA Inspections

12/01/2016 : 0 Comments  

In his recent article, Hyman, Phelps & McNamara, P.C. Of Counsel, and former diversion investigator for the Drug Enforcement Administration, Larry K. Houck, explains the scope of DEA pre-registration and cyclic inspections as a step-by-step guide to actions and procedures registrants should take to prepare for and manage such inspections.

There were 3 sections in his article where Invistics’ Flowlytics software could be leveraged to provider better results:

Cyclic Inspections, i.e., when the DEA arrives unannounced up every 3-5 years to ensure the DEA Registrant has accurate and “readily retrievable” inventory records. Flowlytics lets you drill down into the location and quantity of all your controlled substance in real-time, with printable reports and accurate inventories that can be quickly retrieved and confirmed when the DEA calls.

Accountability Audit, i.e., when the DEA starting counting inventory and comparing it to the amount that should be on hand. The DEA starts with the quantity on-hand during the most recent biennial inventory, adds the receipts since then, subtracts the dispositions since then, and makes sure the current on-hand quantity matches this calculation, much like balancing a checkbook. Flowlytics greatly simplifies this by allowing internal auditors to print what they have in their electronic system and count the controlled substance in person to insure the system is accurate in case of an audit.

Records and Reports, i.e., when the DEA pulls a small sample of records to ensure they are accurate. Flowlytics Report Manager can consolidate data from multiple systems and has many built-in report templates that can be populated for multiple purposes such as the DEA Form 41 report or the Biennial Inventory Year-End Report.

Give us a call at 1-800-601-3456 if you’d like to learn more or see if we can help.

  

US Manufacturing Growth in 7-Year Low

11/01/2016 : 0 Comments  

airport

“The survey indicates that factory output is dropping at an annualized rate of approximately 3 percent, and factory headcounts are being culled at a rate of around 10,000 per month,” Chris Williamson, Markit’s chief economist, said in a statement Monday. “Rather than reviving after a disappointingly weak first quarter, the data flow therefore appears to be worsening in the second quarter, raising question marks over whether [gross domestic product] growth will improve on the near-stalling seen in the first three months of the year.”

Read more here: http://www.usnews.com/news/articles/2016-05-02/manufacturing-crawls-as-growth-nears-7-year-low

  

DEA Reduces Amount of Opioid Controlled Substances that may be Manufactured in 2017

10/05/2016 : 0 Comments  

Yesterday, the United States Drug Enforcement Administration (DEA) dramatically decreased the amount of Schedule II opiate and opioid drugs that may be manufactured in 2017. Almost all of the reductions were 25% or more, with 33% reduction to hydrocodone.

The DEA’s 2017 Aggregate Production Quota (APQ) is the total amount of a Controlled Substance necessary to meet the estimated medical, scientific, research, industrial, and export needs for the year as well as the maintenance of reserve stocks. DEA establishes APQs for more than 250 Schedule I and II controlled substances annually. The 2017 APQ has been reduced for oxycodone, hydrocodone, fentanyl, hydromorphone, morphine, and other such medications.

In announcing these reductions, the DEA cited data showing demand for these opioid medicines has reduced, and stated that much of the reduction is due to the elimination of a 25 percent buffer that had been previously added to the APQ in 2013 and extended through 2016 to guard against shortages.

After the aggregate quota is set, DEA allocates individual manufacturing and procurement quotas to those companies that apply for it. What does this mean for pharmaceutical companies who manufacture Schedule II controlled substances?

  1. Expect your company’s quotas to drop significantly in 2017. With the aggregate quota dropping 25% or more and the average company’s procurement quota to be cut by 25% or more. Your company’s quota may be cut to the point where it will not meet its 2017 revenue/sales forecasts.
  2. Review your Quota Management Processes now. You and your competitors will be competing for a shrinking aggregate quota in 2017. So you need to be sure that your quota requests are timely, accurate, well documented, and aligned with DEA review policies and calculations.
  3. Plan to track your quota even more carefully in 2017 than you have in the past, so that you can properly document and request supplemental quota requests when needed as soon as possible in 2017. Supplemental quota can be requested mid-year as quota is consumed for product development needs, production losses, and changes in inventory levels.
  4. Review and confirm the accuracy of your controlled substance inventory tracking systems. With tighter quotas, each gram across the supply chain will be more precious. Any delays in compiling inventory records will mean delays in quota tracking and supplemental quota requests.
  5. Look for ways to increase inventory turns for Schedule II controlled substances. Increasing turns will help you in two ways: First, the reduction in inventory will lead to a corresponding one-time increase in revenue/sales. Second, the DEA formulas for procurement grants will INCREASE your 2018 procurement quota by the reduction of inventory in 2017.
  6. Look for ways to streamline and accelerate your DEA reporting. For example, companies that are still using paper or spreadsheets to track Controlled Substance inventory should invest in software systems that prepare automated reports to the DEA’s Automation of Reports and Consolidated Orders System (ARCOS). This investment allows companies to convert from quarterly ARCOS submissions to monthly ARCOS submissions, thereby strengthening the data DEA will use to approve mid-year supplemental quota requests during 2017.

Our company, Invistics, provides software solutions for strengthening your Quota Management Processes. This includes:

  • Quota Calculations & Requests – to prepare quota requests that are timely, accurate, well documented, and aligned with DEA review policies.
  • Quota Tracking – to ensure accurate and “readily retrievable” records, and to track every gram across the supply chain.
  • Quota Reporting – to streamline the preparation of DEA reports such as Automation of Reports and Consolidated Orders System (ARCOS) and the year End Reporting System (YERS).

Please contact us if you would like to learn more about our Quota Management software solutions.

  

Rhythm Wheel Optimization with Cadence Advisor

10/04/2016 : 0 Comments  

Cadence Advisor is a ‘workbench’ module in the Flowlytics suite that allows planners to rapidly evaluate many possible production cadences (aka ‘rhythm cycles’ or ‘rhythm wheels’) to minimize overall costs while creating a smooth and repeatable manufacturing sequence.

Planners are presented with their product mix and are able to evaluate different lot sizes by dropping each product into various weeks in the cadence cycle. The result is a basic capacity-feasible schedule. The final output is a product cadence, by product line, complete with manufacturing sequence. Metrics are available to highlight expected changeover costs, days between production, and cycle stocks.
The following are a few of the recent enhancements made to the Cadence Advisor include:

  • – Visual representation of recommended Cadence Wheels
  • – Unique logic to support both Supplying lines and Consumption lines (tying requirements between these two levels of workcenters)
  • – New, easy-to-understand Cadence Summary Reports
  • – Ability to override standard cadence quantities when necessary
  • – New rounding logic for calculating cadence quantities
  • – Improved baseline input data by allowing with using actual historical results or manually input data

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Call us at 1-800-601-3456 to schedule an appointment and learn more about this solution.

  

Inventory Optimization for Measuring and Test Equipment (M&TE) - Defining the Problem

09/26/2016 : 0 Comments  

[Author’s Note: This is the first in a series of blog posts that will describe the journey of one company as they grappled with the issue of inventory. These blog posts will roughly follow the journey as defined by the LEAN DMAIC process]

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Whether you are an aficionado of the Theory of Constraints, LEAN, some other formal process improvement methodology, or just based on your own practical experience, you know that properly dealing with inventory is one of the keys to improving effectiveness.

When we think of inventory, we often focus on the raw materials and supplies needed to support a manufacturing process or the service we provide. While these are certainly a type of inventory that needs to be addressed, there is another type of inventory that must also be considered.

This other inventory is the inventory of facilities, equipment, and tools we use to produce the product or service we offer. This second inventory, due to not being seen as a process consumable, is often overlooked when dealing with the inventory issue. Ironically however, this second category of inventory may have as big if not a bigger impact on operational effectiveness.

The reason is two fold: First, if not maintained in sufficient quantities it can directly impact the ability to produce a product or service. Second, this type inventory represents not only the “inventory” waste as defined by LEAN it also can also involve the “over production” waste. There is not only the challenge with managing the cost and stock level of this type of inventory, but this second type of inventory often requires daily care and feeding. If there is excess inventory it means you are expending production resources to maintain this unnecessary inventory. A simple illustration is machines on a production line. If you do not have enough of those machines you may not be able to meet your production goals. However, if you have an excess of those machines, you are not only incurring the acquisition cost but also the on-going maintenance cost for a piece of equipment that is not being used.

This particular story is about this second type of inventory. It involves measuring and test equipment (M&TE) that is used to support the production of electricity via nuclear power plants. While in the nuclear industry the control of M&TE is specifically mandated by Title10, Part 50, Appendix B of the Code of Federal Regulation, other industries have similar regulatory requirements, or just a recognized commercial need to have accurate M&TE to ensure quality standards. Whatever the basis for the M&TE program, it involves inventory costs.

As the nuclear power industry faces competition from solar, wind, and low cost gas production facilities, the need to reduce cost in all areas has become a necessity. The cost of it’s mandated M&TE program is just one area that has to be examined.

As with all inventory issues, the question is, how much M&TE inventory do we need to have on hand to ensure we can safely and reliably maintain the nuclear facilities without incurring excess cost? For M&TE this cost is not only the cost of buying and storing the equipment, but also with supporting the required periodic calibration of that equipment.

The problem definition thus became, “How do we determine the right level of M&TE to maintain and support?” As all M&TE used to support nuclear power plants is required to be uniquely identified and calibrated as specified at intervals, answering the question of how much current inventory was on hand was fairly easy. We quickly determine we had just shy of 17,000 total items in inventory. This inventory represented over 2,000 difference models of equipment that was being maintained in support of 6 operating nuclear facilities.

The hard part was determining the correct inventory levels for each of the 2,000 models needed to support both normal operations and peak demand during periodic maintenance and refueling outages at each of the 6 facilities. After unsuccessfully trying to “mine” and manipulate the data from our database we realized we were going to need additional resources.

Part II of this blog will share how we went about defining the resources needed to assist us, and the process of selecting the right vendor to support our needs.

Note about the author: Dean Williams is a graduated of the United States Merchant Marine Academy at Kings Point with 40+ years of experience in a variety of industries and positions. Dean’s passion is process improvement, which he brings to all of his activities, whether as the manager of a large electric utility calibration lab, industry representative on various committees and boards, or as a process improvement consultant.

  

Invistics Takeaways from the NCLSI Conference

07/28/2016 : 0 Comments  

NCSLI_2016WS

This week, Tom Knight, Invistics CEO and Founder, was invited to co-present at the annual National Conference of Standards Laboratories International (NCSLI) Annual Conference, held in St. Paul Minnesota. Tom presented a workshop called “Applying LEAN in a Laboratory Environment”, along with Dean Williams, the manager of the Duke Energy Standards Laboratory. Participants included representatives from laboratories in a wide variety of industries, including Pharmaceuticals, Aerospace, Utilities, Manufacturing, and Medical Devices.

This diverse group’s common interest included: how to use LEAN methods to improve efficiencies and reduce waste in laboratories, particularly in “high-mix” laboratories that handle a wide variety of complex testing methods. The workshop included many best practices and examples from labs that Tom and Dean have worked with, as well as hands-on exercises to reinforce these LEAN tools and techniques.

Of particular interest were software solutions Invistics has developed to help laboratories in two areas:

  1. 1.) Improving visibility of operations within a laboratory or testing facility, to improve flow and provide clear oversight of the “heath” and efficiencies of the lab’s operations. For example, pharmaceutical laboratories often struggle with lengthy sample testing times, or with disconnected computer systems that lack the ability to flag when operations are not efficient or if tests are not completing on time. The Invistics software provides visibility by consolidating data from a variety of sources, such as Laboratory Information Management Systems (LIMS), Asset Management Systems (AMS), and Enterprise Resource Planning (ERP) system such as SAP or Oracle. The software can even be used to replace paper-based records or home-grown tools built in Excel or Access.
  2. 2.) Advanced analytics to optimize inventory levels. During the workshop, numerous calibration labs stated their workload can explode and their lab operations suffer when excessive inventories of instruments or tooling require calibration. They expressed a common interest in mathematical tools to optimize inventory levels to avoid these problems. The Invistics software provides those analytics, allowing them to use math and analytics to prove where tools and other testing equipment can be eliminated.

Invistics specializes in these two areas: inventory visibility and analytics. (In fact, our name means inventory visibility and analytics.) We were delighted to have led this workshop, and to bring all these labs together to discuss their common needs and LEAN best practices to address them.

If you are interested in learning more about these software solutions, please contact us.

  

Invistics Upcoming Conference Tour!

07/12/2016 : 0 Comments  

Travel

In an effort to stay up-to-date on new strategies, ideas, and solutions in the industries that we serve, we will be attending the following upcoming conferences. Feel free to introduce yourself and say “hi” to our team, and we’ll be happy to answer any questions you may have regarding our company and solutions.

Upcoming Itinerary:

NCLSI Conference
Tom Knight, CEO of Invistics, will be presenting on the topic of “Applying LEAN in a Calibration Laboratory Environment” at the NCLSI conference this year.
Date: 7/25/2016 @ 8:00 AM
Website:
NCLSI Website

IHFDA Annual Conference
Date: 9/13/2016 – 9/14/2016
Website: IHFDA Website

NADDI National Conference
Date: 10/11/2016 – 10/14/2016
Website: NADDI Website

2016 Fall Hospital Pharmacy Conference
Date: 10/17/2016 – 10/19/2016
Website: Website

NASCSA Conference
Date: 10/18/2016 – 10/21/2016
Website: NASCSA Website

  

Webinar Recordings Available Now

05/31/2016 : 0 Comments  

Every month, Invistics offers educational Webinars in a variety of supply chain topics. Typically, these Webinars include best practices, case studies, and lessons learned from our experience working with a industry leaders. We’re proud to now be able to offer our Webinar recordings to be viewed at anytime:

http://www.invistics.com/resources/webinar-recordings/

  

How Invistics Solutions can prevent Controlled Substance Diversion (4/4)

04/14/2016 : 0 Comments  

Invistics Controlled Substance Blog Series:

In our Controlled Substance blog series so far, we’ve detailed the epidemic of opioid abuse that has ravaged our nation, leading to annual death counts as high as 27,000 per year, which is more than car accident fatalities and rivals the damage done by the AIDS epidemic in the 1990’s.

Invistics’ background is in helping complex supply chains with advanced inventory analytics and visibility tools. In 2012, one our pharmaceutical customers asked us to develop software specifically designed to improve Controlled Substance Inventory Management; it needed to have real-time inventory accuracy and verification to pass Drug Enforcement Agency (DEA) inspections, electronic data entry for Research& Development and Analytical Lab environments who are still mostly using paper-based inventory tracking, smart reporting features to consolidate controlled substance inventory data and make Year-End reporting less burdensome, and the capability to track and manage quota for schedule II controlled substances.

We were surprised to learn, given the urgency of the national drug diversion problem, that there wasn’t another software on the market that provided these capabilities. Over the course of the next four years, we have learned all we could about our nation’s current controlled substance crisis. And we have made significant investments building out our software’s capabilities to help prevent controlled substance diversion.

So now we can offer our experience and our software solution to fight diversion:

  • FlowPath Health: Real-time visibility showing the location of all controlled substance inventory, with alerts to flag if any material is not properly secured in the appropriate vault, cage, or restricted access location:

Controlled Substance Inventory Tracker

  • DataVault: Electronic data entry screens that allow employees in analytical laboratories, product development, and research departments to convert paper-based log books into electronic, real-time tracking information:

DataVault

  • Report Manager: Electronic reports that provide cradle-to-grave lot lineage, with audit trails for every movement of every gram or tablet or sample of controlled substances, and accurately compile the reports required by the DEA to prevent diversion or theft of controlled substances:

LotLineageReports

  • Quota Calculator: And assistance with requesting annual quota from the DEA for Schedule II controlled substances, the most additive and most dangerous controlled substances:

Quota Calculator

To see if our software solutions can help your company, please call us at 1-800-601-3456 for a free consultation, or download our Executive Brief for more information. Together we can turn the tide in the fight against Controlled Substance diversio

  

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