Can Automation and WES Fill the Gaps in Surgical Loaner Kit Management? 

As surgeries have become more and more intricate, the medical device industry has seen an increasing demand for specialized instruments. As one example, the global Minimally Invasive Surgical Instruments Market is projected to attain a market valuation of $60.64 Billion by 2030, with a Compound Annual Growth Rate (CAGR) of 9.7%. However, the sparse storage space within hospitals and surgery centers poses a limitation, prompting many healthcare facilities to opt for surgical loaner kits. Loaner kits are curated sets of procedure-specific surgical tools and devices that medical device manufacturers will loan to healthcare facilities.

Loaner kits allow staff to provide quality patient care and minimize operational overhead. But they are not without their own set of unique challenges, particularly during the fulfillment, replenishment and returns processes. The overarching issue lies in the lack of traceability and automation throughout each kit’s journey. This often results in labor-intensive manual interventions during the stages of kitting and assembly, replenishment and utilization.

In this blog post, we delve into the factors that make the kitting process so challenging, the reasons why it is different from retail or manufacturing fulfillment operations, and how medical device manufacturers can leverage operational practices from other industries to improve efficiency, traceability and speed.

What is involved with the use and management of medical device loaner kits?

During a procedure, hospital or surgical center staff will typically only use some of the SKUs in the loaner tray or kit. Each kit includes a variety of sizes or tools needed only should specific situations arise. The kit is then returned to the fulfillment facility to be replenished and a new order must be placed for the consumed SKUs.

There are many similarities between loaner kit management and the returns management operations of a retailer, namely Quality Control (QC) and Value-Added Services (VAS), followed by replenishment and picking. However, certain challenges are unique to the industry and the type of SKU being handled:

• Precise visibility of kit locations and their contents at all times
• Ability to guarantee the completeness of each kit with all necessary SKUs, ensuring full readiness for surgical procedures
• Swift responsiveness to demand, particularly in urgent situations
• Balancing an inventory pool that will both meet fluctuating demand and avoid overstock that can trap free cash 

RELATED READ: Returns are getting out of hand. Could fulfillment orchestration be the solution?

Why is managing surgical loaner kits so complex?

The process of fulfilling, tracking and replenishing loaner kits is time-consuming, highly manual, and requires a high level of accuracy due to:

• Kit location and contents – Unlike typical retail operations, kits are almost like a composite SKU made up of several individual SKUs. They are often created on demand for a specific configuration. This extremely complex SKU management and maintenance system is further complicated by the need to track unique locations for each kit LPN as required from a traceability and compliance perspective.
  
• Inspection and auditing – When it comes to managing surgical kits, there is no room for error. The need for accuracy in these complex composite SKUs with variable configurations is paramount, unlike anything else in retail or manufacturing. As a result, operations need to include several fail-safe and redundancy measures.
  
• Time to process/fulfill – Loaner kit operations can vary greatly: anywhere between a fairly predictable fulfillment schedule to same-day delivery operations that make retail fulfillment look like a walk in the park. It is extremely challenging to simultaneously flex the speed of fulfillment and maintain a level of efficiency that won’t negatively impact the cost of operations.
  
• Inventory optimization – The major issue with non-standard composite SKU configuration (e.g., a loaner tote) is that it throws inventory optimization for a loop. For example, it can result in a plethora of dead inventory within more active loaner totes as SKUs, which could massively eat away at cash on hand.

How medical device manufacturers can tackle loaner kit challenges

While many of these challenges seem unique to the business of loaner kits, the medical device industry could benefit from adopting innovations from the retail fulfillment space. With a few tweaks and customizations, these practices, specifically robotic automation and Warehouse Execution Systems (WES), could help companies fulfill loaner kits more efficiently. 

Robotics has become an essential part of retail fulfillment as it can increase productivity, optimize space utilization and allow for quick order fulfillment. These benefits also apply to loaner tote operations, where robotics, specifically Autonomous Mobile Robots (AMRs), can significantly improve the handling of loaner kits and trays, while optimizing space and enabling device manufacturers to quickly fulfill urgent kit orders. This consolidation of fulfillment for a specific area can also lead to a significant reduction in inventory proliferation within the supply chain.

Since Warehouse Management Systems (WMS) are not built to handle the complexity of a composite SKU like a loaner kit or tray, advanced warehouse execution systems (WES) are a better option for kitting operations. AI-driven solutions can orchestrate inventory, people and robots in real time to provide a level of traceability and optimization almost unheard of in the industry.

The medical device industry has a long way to go before the realization of an ideal operation for the efficient fulfillment of surgical loaner kits. However, companies can constantly improve by adopting fulfillment best practices from other industries. Collaborating with robotic and WES innovators can also help in adopting these improvements to fulfill loaner kits. This is the right way forward for companies looking to optimize, speed up and enhance traceability in their kitting operations.