By Dave Wendland, as seen in HealthCare Distributor magazine, “Out of the Box” column, November/December 2018
Predicting the future has never been delivered with a 100 percent guarantee, yet countless palm readers, crystal ball gazers, and tarot card experts have made a living from it. In fact, knowing what has not yet happened is some-thing I believe virtually everyone may find value in. Imagine if such predictions could be made in business, allowing us to staff appropriately, compete more effectively, and take advantage of trends that have not yet revealed themselves.
Combining present-day technology with vast amounts of data has come very close to making this a reality. Characterized as predictive analytics, this advanced science enables projections to be formulated based on historical information, key market factors, and carefully-constructed algorithms that paint a fairly accurate depiction of a future state.
Looking across the retail supply chain, four areas immediately came to mind as opportunities for which future predictions would be incredibly valuable.
New Item Launches
The costs associated with developing and launching a new item (regardless if it is a prescription product, over-the-counter medication, or nutritional supplement) has become astronomically high. Our work with manufacturers desiring to move an item from concept through commercialization is often eye-opening as they weigh the expenses for such things as regulatory and legal review, manufacturing, packaging, and quality control, not to mention marketing and promotional investments. If the future success of an item could be more accurately predicted, failed missions could be avoided and necessary adjustments taken into consideration prior to launch.
Inventory Management
Despite tremendously effective demand planning solutions, effective inventory management remains one of the most daunting challenges affecting the retail supply chain. Current solutions project future demand based on past performance and other contributing factors such as availability of raw materials, transportation, and weather, to name a few. What improvements in inventory and supply chain management could result if predictive analytics could also be used to estimate time of implementation at shelf, staffing requirements, and more accurate estimates of how at-shelf promotions may increase demand?
Consolidation Ramifications
The healthcare industry has certainly not been immune to mounting merger and acquisition activities. In fact, the rate of consolidation and reconfiguration has been accelerating at a fever pitch over recent years. How could analytics be better utilized to predict ripple effects across the supply chain, customer reactions, and financial gains/losses? Once again, there are some tools available for such analysis; however, the opportunity exists to further enhance their capabilities and increase the ac-curacy of such predictions.
Technology Trends
Seems every time I turn around there is another whiz-bang technology making previous technology, architecture, and interfaces obsolete. What if there was an accurate way to not only identify and estimate when new technology was coming to the forefront, but also predict how it will affect existing systems, what types of productivity gains can be anticipated, and the investment required to make the necessary conversions, properly train staff, and take full advantage of the newfangled feature? I must admit, as Apple® continues to enhance and release new versions of its iPhone®, I wonder how long I can hang on to the seemingly prehistoric phone residing in my pocket.
Honestly, this article would have been much easier if I could have employed predictive analytics to estimate the word count — and your reaction. Well, even without some fanciful tool, you can count on my continued bold thinking, ideation, and imagination.