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Managing Demand for Critical Bio-medical Parts

Providing medical implants for upper-body surgeries is a critical, time-sensitive business. Raymond Allen of Biomet Microfixations explains how his company forecasts and manages demand so as to never disappoint the patient.

Biomet Microfixations manufactures rigid implants and devices for upper body surgeries from chest to skull, says Allen, senior forecast and inventory analyst. These are critical, life-saving products that must be available when needed, but their use is unpredictable and forecasting is difficult.

“We involve pretty much everyone in demand planning, starting with our president and CEO and our head of supply chain and pushing down from there to sales, marketing, customer service and distribution,” says Allen. “Really, everyone in the company plays a part in our supply chain and everyone has some information that will help us better serve the customer.”

The supply chain at Biomet Microfixations is mostly, but not entirely, a pull supply chain, Allen says. “We have distributors out in the field and we do a lot of consigned sets for surgeries, so we replenish to those. The push comes when we are moving into a new hospital and have to stock up.”

Biomet pulls 36 months of sales history to develop trends on which to base replenishment forecasts, Allen says. “Then we go out to each of the individual business units, such as our thoracic team, to get their input. We put four basic questions to every person in the field and take that information back to our statistical forecasters, who make adjustments based on that input.”

The statistical forecast, created using Forecast Pro, is fed back to the companies ERP system and used as basis for production, Allen says.

Most of Biomet Microfixations's products are made at two U.S. locations, though some are produced in China, and surgical instruments are made in Germany, he says. Production numbers for most products are locked in 45 days out “so we have to be at least 45 to 60 days ahead on all of our estimates,” Allen says. However, German instruments that are specific to particular types of surgeries have a longer lead time and orders are locked in six to eight months out.

“We ship to our distributors, but our end customer is the patient on the table and we never want to let that person down,” says Allen. “We never want to be the reason a surgery is postponed, and in the past two years we have missed a surgery only one or two times.”

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