Culling the Herd: How to Stop Pharma Inventory Waste and Protect What Matters

 

Culling the Herd: How to Stop Pharma Inventory Waste and Protect What Matters

In the pharmaceutical world, inventory management is a high-stakes game. Companies often carry a vast number of product variations, or SKUs (Stock Keeping Units), to meet market demands. However, this common practice leads to a silent but significant problem: a warehouse full of slow-moving stock that eventually expires, forcing companies to write it off as a total loss. At the same time, this clutter can obscure the true state of the supply chain, leaving critical, life-saving drugs understocked.

This challenge is a classic case for the Theory of Constraints (TOC), which provides a clear path to prioritize and protect what's most important. Instead of treating all products equally, TOC helps us differentiate between what truly matters and what's simply taking up space and costing money.

---

The Problem: A Tale of Two SKUs

Imagine a pharmaceutical company with thousands of different product variants. Some are blockbuster drugs used daily by millions, while others are rare medications for a specific, small patient population. Without a smart strategy, both are treated similarly by the inventory system. This results in:

• Excessive Waste: Low-demand SKUs sit on shelves for months or years, ultimately expiring and being thrown away. This is not just a financial loss; it's a major source of waste.

• Patient Risk: The company's focus is spread thin, and the most important, fast-moving drugs may not receive the attention they need. This can lead to stockouts of life-saving medicines, which carries a far greater cost than any financial loss.

---

The TOC Cure: A Simple, Three-Step Prescription

The solution lies in applying TOC's principles to inventory management. It’s about being strategic and focusing on throughput, which is the rate at which the system generates money.

1. Rank Your SKUs by Throughput:

   First, we must stop treating all products as equal. Using throughput accounting, we rank every SKU not just by sales volume, but by its contribution to the company's throughput. This means we look at the gross profit an SKU generates, minus any direct costs. More importantly, we also consider its clinical value. This step gives us a clear picture of what’s truly valuable.

   Example with Numbers:

   Let's look at three hypothetical SKUs:

   • SKU A (Lifesaving Vaccine): Sells 100 units per month, with a profit of $500 per unit. Monthly Throughput: $50,000. Clinical Value: Extremely high.

   • SKU B (Common Pain Reliever): Sells 10,000 units per month, with a profit of $10 per unit. Monthly Throughput: $100,000. Clinical Value: High.

   • SKU C (Rare Dietary Supplement): Sells 20 units per month, with a profit of $20 per unit. Monthly Throughput: $400. Clinical Value: Low.

   Throughput accounting immediately highlights that while SKU B has the highest sales volume, SKU A's critical nature and high per-unit value make it equally, if not more, important to protect. SKU C, however, has a negligible contribution.

2. Cull the Non-Performers:

   Once you've ranked your SKUs, you'll find that a small number of products are responsible for the vast majority of your throughput. You'll also identify a group of low-impact SKUs with negligible throughput contribution. The cure is simple: reduce the SKU count by eliminating these non-essential products. This frees up capital, warehouse space, and management focus, all of which were previously wasted on items that provided minimal value.

   Example with Numbers:

   After our analysis, the company decides to discontinue SKU C. By doing this, they free up the space and labor previously dedicated to managing a product that only generated $400 per month in throughput. This resource can now be redirected to more profitable or critical products.

3. Differentiate Your Buffers:

   With your inventory streamlined, you can now apply a tailored approach to managing what's left. Instead of one-size-fits-all safety stock levels, you create differentiated buffers.

   Example with Numbers:

   Let's assume a typical safety stock is a 2-month supply for all products.

   • SKU A (Lifesaving Vaccine): We increase the buffer to a 4-month supply to protect against any disruption. Instead of just 200 units on hand, we now maintain 400 units, ensuring patients are never at risk of a stockout.

   • SKU B (Common Pain Reliever): We keep its buffer at a 2-month supply, which is sufficient for a high-demand, stable product. We maintain 20,000 units.

   • SKU C (Rare Dietary Supplement): Having culled it from the inventory, we have a 0-month supplyas it is no longer stocked.

---

The Result: A Healthier Inventory

By applying these TOC principles, a pharma company can transform its inventory from a cluttered, wasteful mess into a lean, efficient system. They stop focusing on products that drain resources and start protecting the products that save lives. This approach not only lowers waste and cost but, more importantly, protects patient-critical flows, ensuring the right drug is always available at the right time.

The Global Demographic Shift: A Look at the Next Twenty Years

The Global Demographic Shift: A Look at the Next Twenty Years

The ongoing global demographic shift—marked by falling birth rates, increasing life expectancy, and a rapidly aging population—is set to have a profound and lasting impact on the world over the next two decades.³ This trend, while varying in pace and severity across different regions, will reshape economies, societies, and geopolitics.⁴ The most significant impacts will be felt in countries that are aging rapidly, such as Japan, Germany, and China, but the consequences will be global.

Economic Impacts

The most direct economic consequence is a shrinking working-age population.⁵ As the proportion of older, retired individuals grows, the ratio of workers to retirees (known as the dependency ratio) will decline.⁶ This puts a significant strain on social security and pension systems, as a smaller pool of workers must support a larger population of retirees.⁷ It also leads to labor shortages, which can slow economic growth and productivity.⁸ To mitigate this, many nations are considering increasing the retirement age, encouraging greater labor force participation among older adults, and embracing automation and technology.

The shift will also change consumption and investment patterns. As populations age, there will be greater demand for healthcare, senior living, and elder care services, while demand for goods and services related to youth and family life may stagnate.⁹ This requires a reorientation of economic resources and a potential restructuring of entire industries. The increase in healthcare costs, in particular, will place immense pressure on government budgets.¹⁰

Social Impacts

Socially, the aging trend will challenge traditional family structures and social safety nets.¹¹ With fewer children, the historical role of the family as the primary caregiver for the elderly is weakening.¹² This places a greater burden on public and private care systems, which are often ill-equipped to handle the growing demand for long-term care. The potential for social isolation among the elderly is also a growing concern.¹³

Conversely, an older population also brings potential benefits.¹⁴ Many older adults remain active, healthy, and economically productive, contributing through work, volunteering, and caregiving for grandchildren. Their accumulated knowledge and experience can be a valuable asset. The challenge lies in creating social structures and policies that recognize and support these contributions, rather than viewing aging solely as a burden.¹⁵

Geopolitical Impacts

On a geopolitical level, demographic shifts will alter the balance of power. Countries with rapidly aging and shrinking populations, such as Russia and China, may face long-term challenges in maintaining their economic and military strength. A smaller workforce and a larger dependent population can limit a nation's capacity for innovation and growth.

Meanwhile, countries with younger, growing populations, particularly in parts of Africa and South Asia, may experience a "demographic dividend"—a period of accelerated economic growth fueled by a large working-age population. However, this potential can only be realized if these nations make significant investments in education, health, and infrastructure to provide meaningful employment opportunities for their youth. This disparity in demographic profiles could lead to increased migration from younger, developing nations to older, developed ones, creating both opportunities and challenges for international relations and domestic policy.¹⁶

The UN Population Division provides interactive graphs and data on its World Population Prospects website.

Why Assisted Dying Is a State Responsibility

 

Why Assisted Dying Is a State Responsibility

The question of assisted dying is a deeply personal and difficult one. It's an issue of autonomy and dignity in the face of suffering. In the UK Parliament's debate on this topic, a core argument emerges from a fundamental inconsistency in how the state treats personal health decisions. While getting sick or old are personal processes, the state is heavily involved in assisted healing. Therefore, the same logic dictates that the state should also be involved in assisted dying.

---

The Core Inconsistency

The state already plays a massive role in our healthcare. We have a National Health Service (NHS) that provides a wide range of treatments and care, all designed to help people heal and prolong life.¹ This includes everything from simple medications to complex, life-saving surgeries. We spend billions of pounds each year on doctors, hospitals, and medical research.² This is a form of state-assisted healing, and we collectively agree that it's a necessary and moral function of government.

This state involvement is not seen as an intrusion; rather, it's a fundamental duty to support the health and well-being of citizens. We don't say that treating cancer is a personal matter and should be left to the individual and their family alone. Instead, we have a public system in place to assist.

If the state is so deeply involved in assisting people to live, why does its responsibility stop at the point where a person, facing incurable and unbearable suffering, wishes to die? The decision to end one's life under these circumstances is just as personal as the decision to seek treatment for an illness. To deny assisted dying is to say that the state can help you live but cannot help you die, even when living has become a burden that a person no longer wishes to bear. This creates a moral and ethical imbalance in our healthcare system.

Addressing Concerns

Of course, there are significant concerns about assisted dying. The risk of foul play, pressure on vulnerable individuals, and ethical issues are very real and must be addressed. However, these concerns are not insurmountable. Many countries have already implemented assisted dying laws with strict safeguards, including:

• Multiple physician approvals: Requiring more than one doctor to confirm the patient's terminal diagnosis and mental capacity.

• Waiting periods: Ensuring the decision is not made impulsively.

• Patient self-administration: In some cases, the patient must be the one to take the final dose, ensuring the act is truly voluntary.³

• Mental health evaluations: To confirm the patient is not suffering from treatable depression or other mental health conditions that may be influencing their decision.

These safeguards demonstrate that it is possible to create a system that respects individual autonomy while protecting the vulnerable. The debate should not be about whether to allow assisted dying, but how to implement it safely and compassionately.

In conclusion, if the state's role is to assist its citizens in their most vulnerable moments, then that responsibility must extend to both living and dying. To provide a public service for assisted healing but not for assisted dying is a logical and ethical contradiction that the UK Parliament should resolve.

---

You Can’t Tell Me This Makes Sense

 

You Can’t Tell Me This Makes Sense

I was thinking about things you see on the news, things that just make you scratch your head. They’re always talking about capital punishment, about how we need to make sure it’s a humane death. They’ve got the lethal injection, and they’ve got it all timed out. It’s supposed to be quick, painless, dignified. We spend a lot of time and money making sure the worst person in society, the one who took a life, doesn't feel a moment of suffering on their way out. And you know, a part of you thinks, well, that's what a decent society does. But then you look around.

---

You go to a hospital. A cancer ward, maybe. And you see people who have done absolutely nothing wrong. They’re lying in beds, for weeks, months, sometimes years. The pain is relentless. The medications barely touch it. They’re wasting away, hooked up to tubes, and they’re just waiting. They’re waiting for the end, and there’s no dignity to it. It’s a slow, agonizing grind. We make sure a murderer gets a peaceful exit, but we let our own loved ones endure a prolonging of their suffering. What's the deal with that? What's the logic here? It’s completely backwards.

---

Maybe we need a little perspective. Maybe we should put webcams in every hospital room with a terminal patient. Real-time footage. No editing, no doctor's notes, just the truth. And then we can show it to people. We can make it mandatory viewing. Every twenty minutes, while you're binging your sci-fi or your romance movie on Netflix, a little clip pops up. A reminder of what a "humane" society looks like. A short clip of a man wincing in pain, or a woman struggling to breathe. Maybe that’s what it will take. Maybe that’s the only way to remind people of the suffering we’re just letting happen behind closed doors. You’d think we'd have better priorities.