Justin Tennant, Co-Founder & President; and Steven Darocy, Managing Partner & Co-founder, Surgical Product Solutions
A little bit of automation can do wonders, especially in the healthcare sector, where the bulk ordering of supplies results in waste and unnecessary expenditure. For instance, the rising demand for the latest surgical equipment, revisions in consumer-vendor contracts, or a change in physicians can lead to healthcare organizations discarding un-used medical products in favor of newer, albeit similar products. This substantial pile-up of surgical disposables creates an unnecessary strain on the company’s budget and the environment when disposed of in such large quantities. However, one organization has redefined the very foundation of the healthcare supply chain by introducing an element of automation into the redistribution of surgical surplus.
As a distributor of medical products, Surgical Product Solutions (SPS) partners with healthcare organizations nationwide to purchase unused, in-date surgical surplus, and offer these products to other facilities at a discounted price. The company helps its partners recover significant expenditure and encourages cost savings by purchasing surgical products that would otherwise be left unused until they are disposed upon expiry. This process goes hand-in-hand with assisting companies in buying the surplus, top-quality surgical equipment at greater discounts from SPS than toptier vendors.
The Merit of Automation
Surgical Product Solutions’ process is convenient and cost-efficient. Healthcare organizations that have worked with similar distributors of surplus products understand that there are time-consuming elements for optimal inventory management. It is a daunting task for customers to identify necessary products at desirable prices when warehouses store tens of thousands of Stock Keeping Units (SKU) at any given time. This is where SPS’ proprietary platform, Stockhawk, comes into play. “We noticed that customers who were interested in purchasing were put off by the immense time required to sort through the stock to find the products they needed,” says Justin Tennant, co-founder, and President of Surgical Product Solutions. Stockhawk offers the answer to this arduous task of inventory management via a semiautomated inventory management program, providing valuable insights into savings opportunities.
“Stockhawk is a data-driven platform that requires a baseline of the customer’s ordering data from the previous 12 months for efficient inventory management,” adds Tennant. Once the SKU data of the client’s previous purchases are uploaded into the Stockhawk system, the team at SPS can perform a fill rate analysis to help the client realize their estimated cost savings annually if they had purchased the products from SPS, instead of having to order in bulk from OEMs. Once connected to the client’s inventory, the platform also helps ship out prompt deliveries of products in low stock.
Traditionally, once the facility’s stock hits a minimum threshold, an order request is generated, which the company then has to send to their vendors. With the Stockhawk platform collecting data daily via FTP or email, the manual process of order generation is replaced. The system automatically compares the client’s stock with SPS’ inventory and creates an order queue per the customer’s needs.
We noticed that customers who were interested in purchasing were put off by the immense time required to sort through the stock to find the products they needed
Such an intuitive workflow is designed to allow buyers to enjoy the multi-fold benefits of the order process. Moreover, customers have access to reporting and analytical functions, which allows them to review purchase orders and share the reports with peers. As the platform is influenced by demand, every request made for a particular product allows the company to better understand the requirements and necessities of its clients, thereby allowing them to stock up on relevant products and anticipate what would be needed in the future. The entire ordering process is optimized further improving the efficiency of the platform and the savings made by all customers within the Stockhawk platform.
Healthcare, Technology, and Automation
There are many advantages to purchasing from a surplus product distributor such as SPS. The most prominent being the ability to buy the same, high-quality products as they would from an OEM, at much lower prices. Customers are also given the flexibility to “purchase by the each,” rather than being forced to purchase in bulk from the OEM. This ensures that facilities are not spending more than is necessary on products that they may not routinely need. Additionally, SPS does not require any contracts – allowing for seamless integration into the existing inventory management operations and purchasing obligations that have in place.
SPS’s leadership team comes from the healthcare, technology, and automation domains, enabling the company to address a multitude of requirements from both the healthcare and data perspectives. While Tennant brings in the analytical, financial, and technological skill sets, his counterpart Steven Darocy brings the necessary healthcare, pharmaceutical supply chain, and sales expertise to the table.
The duo’s proficiencies, alongside the benefits of the Stockhawk platform, infuse an element of automation to the conventional, manual ordering processes, which enhances the customer experience.
"Stockhawk is a data-driven platform that requires a baseline of the customer’s ordering data from the previous 12 months for efficient inventory management"
As most healthcare facilities traditionally order supplies at timely intervals, the control over inventory is limited. SPS’s shopping experience empowers healthcare facilities to resolve this bottleneck, saving them as much as 30 percent of their financial resources spent on a single SKU. “During my time as a medical professional, I learned that there is a financial challenge for medical facilities to manage the products that are required by the doctors,” explains Steven Darocy, co-founder and managing partner of SPS. “And, as a sales representative for these entities, I would often come across requests for credits from the medical facilitates, asking us to help them mitigate the surplus products left unused due to a change in physician.” As trivial as this may sound, sales representatives are faced with such roadblocks regularly, further delaying the potential sale of a product. Invariably, these setbacks allowed the two entrepreneurs to reimagine the distribution of surgical surplus within the healthcare space, leading to the establishment of SPS in 2011.
Darocy mentions one instance that encapsulates this service in its entirety. One of the hospitals that he engaged within Pennsylvania encountered a scenario wherein 6 of their surgeons departed the facility, leaving behind 1.4 million dollars’ worth of orthopedic screws, plates, rods, and instruments. The facility sought to monetize the unused equipment, as the new surgical group required a whole new set of products. “Such instances are not uncommon, as these surgeon groups are also designers and consultants for medical device manufacturers. Naturally, they would prefer using the products that they represent or understand extensively,” adds Darocy. The benefit of collaborating with Darocy and Tennant’s firm enabled the healthcare facility to reinvest the financial resources obtained from the sale of these surplus products toward the expansion of their facility, saving them hundreds of thousands of dollars in financial overhead.
Such win-win scenarios highlight the ingenuity of SPS’ business model, all the while showcasing the expertise of the co-founders in solving a quintessential problem with the healthcare and pharmaceutical landscape. Collectively, the company reduces the waste of medical surplus exponentially and offers customers a cost-effective avenue in procuring medical products and supplies.