Friday, August 26, 2016

Doveryai, no proveryai – Trust, but verify...

Image result for quotes for trust but verifyThe quote, “trust, but verify,” is actually an old Russian proverb that President Ronald Reagan used during arms control negotiations with Russian President Mikhail Gorbachev in the 1980s. He learned the quote in the Russian language and used the phrase frequently as he and President Gorbachev worked to prevent the promise of mutually assured destruction if the two superpowers failed to get along during that era. 

Our message for today is not really a history lesson but more of wake up call for those of you in the pharmaceutical space , or looking to go into. 

This month OptumRx one the largest pharmacy care services, any the pharmacy that manages our health care plan as well, Sent a letter to all it's member/partner pharmacies.  Informing them that if they were not VAWD Certified then they might likely no longer be able to participate.  

Effective Date: 10/01/2016  OptumRx

Verified & Accredited Wholesalers

As a Network Pharmacy Provider and participant in OptumRx’s Networks, your pharmacy must comply with the terms and conditions of the Agreement and the Provider Manual (“Manual”). The OptumRx 2016 Provider Manual is available on-line at Information on accessing the OptumRx BINs and Payer Sheets are contained within this Manual.
Effective October 1, 2016, changes will be made to the provider manual stating that your pharmacy MUST purchase ALL medications dispensed for claims being dispensed to OptumRx participants from a Verified- Accredited- Wholesale Distributor (VAWD). This accreditation program is offered through the National Association of Boards of Pharmacy (NABP).

So what is this all about? 

I see it as a new way to trust but verify , as the business landscape changes and we need to push the liability buck (so to speak) , it is a new way to verify your business partners are real and are doing things in the correct manner. 
We saw a similar issue with the DSCSA and the requirements to check licenses on all your trading partners.  They want to trust you with the business but need to verify you are doing things right and know you can prove that fact, easily and quickly in the event of a question. 

The long and short of is that your business practices, SYSTEMS AND PROCESSES,  and people are now under more and more scrutiny.  It's not about cutting the little guy out,  as many may think, as we at TSH have both large and small clients who are VAWD Accredited. 

If you are still running your business  in spreadsheets and quick books , the time has come for you to look at the landscape and ask yourself how long will it be before you need a system with audit, security and business process management designed for the healthcare industry? 

The good news is that this an excellent opportunity for those companies with systems in place. As they are way ahead of the game. Typically VAWD certification can take months if not a year , 
So a two month time frame means that the OptumRx business will likely be up for grabs. 

Are you ready to partner with a solution and team that knows healthcare and pharma?
Join us as the Specialty Pharmacy show in Washington this September. 


For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556.
 Or send a message to

Click here and tell us how we can help you with your business solutions.

Friday, August 19, 2016

The secret to the perfect fill rate, Next Day Shipping (JIT)

Use your vendor partners to get your fill rates where they need to be

 An ever elusive goal is the perfect order, 100% fulfillment and no backorders, but the reality of today's business is that heavy inventory investment is no longer a possibility.  You can just keep everything in stock any more.

To help you compete in the fast paced "JIT"- Just in Time , or Next Day Shipping environments, MDS now offers a Next Day Vendor module. Rather then try to figure out usage patterns and forecast demand etc.. 

You can now pass those headaches to your vendors and make the process transparent to your customers. 
Many distributors already do this and we have already discussed our special Tie to sales order PO logic - which allows you to take a sales order and have it create a special po to ship and match to the sales order, - well with the next day vendor logic , any Item flagged as next day vendor is treated as in stock and will go on a building order for that vendor. 

The Major difference is that it will show up in the warehouse on the picking documents with a flag indicating the item will be next day shipped. Customers wont see any evidence that you shipped from an alternate source. 

Many vendors allow you to aggregate orders for the day and take one big purchase order for all the items you need for the day. The will then ship them overnite and have them at your warehouse the next morning. 

Your customer's order will then ship the next day with the other goods you already had in stock. and you can cut down on the paper work  with a single purchase order to your vendor and no second or third shipping documents. 

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to
Click here and tell us how we can help you with your business solutions.

Friday, August 5, 2016

Find your niche, and you will find the profit..

Image result for niche markets

The Economy continues to slowly grow, but in some segments we are seeing "pockets of growth" or specialized high growth Niche areas in the sea of steady growth.  With 2016 almost gone and the last quarter just around the corner, the question is: How can distributors exploit "pockets of growth" without wasting time and effort on the segments that will remain persistently flat this year? 

In the end it comes to down to this:  What worked last year or the year before will not necessarily work again in 2016.  With this in mind distributors need to be:

  • Constantly innovating, 
  • Seeking new market opportunities, 
  • Going after smaller more promising market niches 

The business climate has changed quite a bit in the last five to seven years to compete effectively, distributors should be pursuing new opportunities, looking for untapped growth markets, and hitting fresh customer segments.

Some Ways to Leverage New Opportunities

While the national economy is undoubtedly in better shape than it was five years ago, the rising tide hasn't necessarily lifted all of the boats.  Where health care changes in the Northeast may be fueling with an onslaught of new commercial and industrial opportunities , those in the oil-producing states have seen significant drop-offs in business opportunities and some are actually in a state of stagnation or even depression. This affects the health care space just as much as the rest of the oil industry. 

Drill down a lot deeper. 

Break larger geographic regions down into smaller chunks and then divide and conquer;.
Drill down and figure out where you can add value in new, less obvious areas, geography can be a big helper here and using the MDS Data visualization tools can help. If you are not familiar with heat maps 
you might want to invest in a system to help you visualize your sales by geography. 

Utilize customer segmentation strategies. If you're unsure how to go about dissecting potential market opportunities, try using a customer segmentation strategy. (see graph Below) Defined as the practise of dividing a company's customers into groups relevant to a particular business, customer segmentation helps you decide how to correlate customers within each segment in order to maximize the value of each customer to the business. 

"Customer segmentation is most effective when a company tailors offerings to segments that are the most profitable and serves them with distinct competitive advantages," according to research firm Bain & Company. "This prioritization can help companies develop marketing campaigns and pricing strategies to extract maximum value from both high- and low-profit customers." In English 


Don't try to be the low-cost leader. Most business owners refer to this as the "race to the bottom," yet many distributors still insist on signing up for—and participating in—this race. "This is a pretty dangerous strategy to pursue because it's extremely difficult to maintain a cost advantage over time,"

A better approach, is to develop a "niche" strategy by finding one or more customer segments where you can really shine. When selecting niches, distributors should take the time to identify, size up, and research potential opportunities before allocating money, time, and manpower to the effort. "Quantify the niche, determine its size, and look not only at the number of players that are in it—but also how much each one of them is spending," "Then, put together a plan of attack for the niches that show the most potential."

Maximize current opportunities. One of the easiest and fastest ways to tap into small growth pockets is by simply selling more to the customers that you're already working with. 

As an example, Amazon gained huge insights by offering customer's item that others have bought. Use this  same algorithm in your system. people who bought "X" also bought "Y". 

This seemingly small oversight can wind up costing distributors money as their customers turn to other sources for their materials, supplies, and equipment. "Look at all of the possible product and service extensions, and talk to your customers about their day-to-day needs.  

If the Amazon logic seems to much , look at a simpler approach and whenever you sell an otoscope 
ask them if they need light bulbs. If you sell Gloves make sure they have all the sizes they need (not every one is a large you know..)

Ignore your customer and it won't take long for sales to flatten out and opportunities to wane. "The companies that are building customer engagement and selling to them the way they want to be sold to are the market leaders. 

Ready to find your Niche? 

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to