Lightswitch - Overview

Reprocessed purchasing is an easy way to achieve savings but also can be a burden on purchasers if they need to look up inventory availability, order through non-standard interfaces, purchase based on emails, or respond to back-ordered product. The purpose of the Lightswith integration is to direct purchasing to the appropriate source depending on availability of reprocessed product so that purchases can follow a standard process without special reprocessing considerations.

Solutions that involve updates to the core system that do complicated things like split orders based on availability carry a high cost of integration development, unintended risks, and lack of persistence across system versions. For those reasons the proposed solution is to configure purchasing to be directed 100% towards reprocessed product when sufficient inventory is available or 100% away from reprocessed (toward new product) when this is not the case. This is typically assessed once a day before purchasing begins to occur for the day. This is accomplished by making configuration changes through automation and utilizing standard out of the box functionality of the system.

We consider it a best practice to have one item in your materials management system that can source either new or reprocessed product with the integration directing the default path based on inventory levels. The examples below illustrate the configuration changes made in two different common MMIS systems. Note, that the method used to direct purchasing to or away from the reprocessed item are different, however the same results are achieved in these two systems.

Example (Item has sufficient inventory available)

Lawson

McKesson

Example (Item has insufficient inventory available)

Lawson

McKesson

Safety Stock

The amount of stock that we hold onto before we take the action of turning an item on for reprocessed purchasing is called Safety Stock. To maximize savings it is preferred for this value to be as low as possible as very high safety stock requirements will limit your ability to purchase.

This can be achieved by keeping reorder quantities low. We can also keep Safety Stock low, and in fact many customers choose to set this value at 1 for most items. This will drive purchasing to reprocessed product when any inventory is available. If orders for more product than is available are received, we will ship the partial shipment, back-order the remainder (if not a fill-kill account), and the item would naturally turn off for reprocessed purchasing at the next integration execution. This practice will maximize savings but allow for some back-ordering, although minimized back-ordering due to the automated deactivation of the item that would follow any back-order. If the desire is to never have a back-order we will set safety stock values based on ordering patterns. If not explicitly set, the default configuration is for half of one month’s demand estimate. Back orders can be minimized and when they do occur, updates to safety stock will further refine the system and minimize bumps.

Special Rules

Purchasing Caps

If you have OEM contracts that require some count or percentage of your consumable purchasing to go to the OEM, we can utilize a purchasing cap rule to achieve some savings. Purchasing caps limit the amount of reprocessed purchasing your organization can make in a month. Once purchasing exceeds the configured cap, the integration will return a signal to turn an item off for reprocessed purchasing regardless of Medline’s inventory position. An over-under value is recorded from month to month so that if you place a big order that goes not too but beyond your monthly cap then the next month’s cap will be reduced by that overage and vise-versa. This over-under tracking will have an annual reset at whatever month is appropriate for your contract terms.

Exclude Rules

If for some reason you would like to leave an item configured with a reprocessed item, but never direct purchasing towards reprocessing for that item, we can add an exclude rule for the item in our system. This configuration is available from our customer reporting portal and can be changed by users with access granted to do so at any time.