I n Medtech industry, the management of consignment stock is a critical component of operational efficiency and financial performance. Consignment stock, where products are stored at a customer’s site but remain the property of the supplier until used, presents unique challenges. Effective management of consignment stock can drive cost savings, ensure compliance, and enhance customer relationships. This whitepaper explores the complexities of consignment stock in Medtech, the challenges companies face, and how Aligna, a Salesforce-based solution, provides a streamlined approach to manage consignment stock efficiently.

What is Consignment Stock in Medtech?

Consignment stock refers to medical devices and products that are placed at a customer’s location (such as a hospital, clinic, or surgery center) but remain the property of the supplier until they are used or sold. This model benefits both suppliers and customers. For suppliers, it provides assurance that their products are readily available and can enhance customer loyalty. For customers, it reduces the need for upfront purchases and ensures they have immediate access to necessary products without stockouts.

Despite these benefits, managing consignment stock in the Medtech industry comes with challenges, including inventory control, product traceability, regulatory compliance, and financial reconciliation.

Challenges in Managing Consignment Stock

Inventory Visibility and Control

One of the primary challenges in consignment stock management is maintaining real-time visibility of inventory levels. With products stored across multiple customer locations, suppliers may struggle to track stock levels accurately. This lack of visibility can lead to stockouts, overstocking, and inefficiencies in replenishment cycles.

Product Traceability and Compliance

Medtech products, especially those involving implants and high-value devices, must be traceable for regulatory and safety reasons. This includes tracking product serial numbers, lot numbers, and expiration dates. The challenge lies in ensuring that products used from consignment stock are appropriately recorded, and any issues such as recalls or product complaints are addressed quickly.

Financial Reconciliation and Cash Flow

The consignment model can complicate financial operations. Since the supplier retains ownership of the stock until it’s used, accurate invoicing and payment processes are crucial. Tracking the usage of consignment stock in real-time, as well as reconciling inventory and sales records, is essential to prevent discrepancies that can affect revenue recognition, working capital, and cash flow

Supply Chain Coordination

Effective coordination between the supplier and the customer is essential to ensure that consignment stock is replenished when needed, and that stock levels are aligned with demand. A breakdown in communication or delays in replenishment can lead to stockouts or excess inventory.

Regulatory Compliance

The Medtech industry is highly regulated, and consignment stock is no exception. Companies must ensure that their consignment practices comply with local and international regulations, such as FDA, EU MDR, and ISO standards. Failure to maintain proper records and traceability can result in compliance issues, product recalls, or even legal penalties.

Aligna: A Solution for Managing Consignment Stock

To address the challenges of consignment stock, Medtech companies need a robust, digital solution that offers visibility, control, and compliance throughout the order lifecycle. Aligna, built on the Salesforce platform, provides a comprehensive solution for managing consignment stock efficiently, enabling Medtech companies to overcome these challenges and optimize their operations.

Key Features of Aligna for Consignment Stock Management

Real-Time Inventory Visibility

Aligna provides end-to-end visibility into consignment stock. By integrating with various systems, including ERP and warehouse management systems, Aligna enables real-time tracking of stock levels at customer locations. With this information, suppliers can proactively manage inventory levels, ensuring that replenishment occurs in a timely manner and reducing the risk of stockouts.

Seamless Traceability and Compliance

Aligna ensures that all consignment stock is traceable, from intake to usage. Through its integration with serial number tracking, lot number tracking, and expiration date monitoring, Aligna helps Medtech companies maintain full traceability and comply with regulatory requirements. In the event of a product recall, Aligna’s system provides the necessary data to identify affected stock and execute corrective actions quickly.

Automated Financial Reconciliation

With Aligna’s automated reconciliation capabilities, Medtech companies can efficiently track the usage of consignment stock, generate invoices, and reconcile financial data. This eliminates manual errors and ensures that revenue recognition is aligned with stock usage. Aligna provides a clear audit trail, ensuring compliance with financial reporting standards and improving cash flow management.

Integrated Supply Chain Management

Aligna allows for seamless communication between suppliers and customers. It provides real-time insights into consignment stock usage, enabling suppliers to anticipate demand and optimize stock replenishment schedules. This integration helps streamline the supply chain, reducing delays and excess inventory, and improving overall operational efficiency.

Regulatory and Compliance Tracking

Medtech companies are subject to stringent regulatory standards, and Aligna’s built-in compliance features ensure that consignment stock management adheres to industry regulations. Aligna offers features such as audit trails, automated reporting, and real-time alerts to ensure compliance with regulatory bodies, including the FDA, ISO, and local healthcare regulations.

Conclusion

Consignment stock is an essential part of the Medtech supply chain, but it comes with significant challenges related to inventory control, traceability, compliance, and financial reconciliation. Aligna, a Salesforce-based solution, provides Medtech companies with the tools to manage consignment stock efficiently. By offering real-time visibility, seamless integration, and compliance tracking, Aligna helps Medtech companies optimize their consignment stock management, reduce operational risks, and ensure better financial outcomes. With Aligna, Medtech companies can enhance their supply chain, strengthen customer relationships, and achieve greater operational excellence.