8312016 Zimmer Biomet Loaners Debit Policy Proposal Late Fee Policy Harmonization 8312016 Shipping Harmonization Extension Harmonization System Harmonization 2 Loaner Harmonization Loaner Harmonization Series ID: 579176
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Eric Huppi & Patrick Schenkel8/31/2016
Zimmer Biomet
Loaners
Debit Policy ProposalSlide2
Late Fee Policy Harmonization8/31/2016Shipping Harmonization
Extension Harmonization
System Harmonization
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Loaner Harmonization
Loaner Harmonization SeriesSlide3
Performance threshold in place to offset monthly debits. If
Q1 2017
85%
of your records for a given month are returned on time, all debits will be waived. Q2 2017 go to the mature program threshold of 90%.
Source inventory 4 days prior to the case, inventory must be back 3 days after the case. This gives an 8 day cycle time on inventory.
Debits occur at the end of every month. All debits will go towards the production of new inventory.
Debit-$25 per stock type (loose piece, kit, invalid kit) per day late up to 22.5% of listOnce debits hit 15% of list and are 10 or more days late, the inventory will either:Inventory will go through the lost/wasted process-22.5% debit appliedInventory is transferred to DI and mutated from CI to ZDI inventory in SMS and 15% debit is appliedCI inventory should not be in bins outside of Southaven. Binned inventory will count as late. Debit-$25 per stock type per day in binCI inventory in packages will be reviewed daily by Loaners team to manage overdue packages. Special thanks to ZB SoCal, ZB Iowa, ZB South Carolina, ZB Wisconsin, ZB North Texas and many others. We are trying very much to be transparent and listen to your feedback. We also have 3 months to refine the process so please keep it coming.
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Late Debit Policy: Principles
Policy PrinciplesSlide4
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Loaner Case Inventory Cycle
8 Day Inventory CycleSlide5
5 kits are on loan2 implants
3 trays
The 5 sets are not received 3 days after surgery and the territory is not within the 85% (90% in Q2) return on time window a $125 dollar late fee will be applied each day.
The late fee will be applied until 22.5% of the value of the kit is reached. At that point the territory will have the option to file the items as lost wasted, or if the territory does not report the items lost will have them transferred to their DI.
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Late Fee Impact
Scenario 1: Nothing returnedSlide6
1 implant kit with 8 items are on loan.1 implant gets returned on time
The item is received to SH as the kit it is associated with. The rest of the items are pushed back to loan as loose items.
Each item is no systematically seen as loose stock and each implant will trigger a $25 dollar a day until the value of the stock at
15% of list is achieved. At this point the items will be transferred to the DI and can be processed as lost wasted.
In this example a $175 dollar a day late fee would be applied if the territory is outside its 90% on time return threshold.
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Late Fee ImpactScenario 2: Partial returnxxSlide7
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Decoupled Kits and the Late Fee impact
Max 15%Slide8
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Late Fee
Impact
Scenario 1: Missing instrumentSlide9
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Late Debit Policy:
Reporting & Rollout
Late Loaner Debit Example Review
Daily SnapshotsRolling Monthly accumulation
Month over Month Trending
Rollout-Mock Fees September-Dec, Go-live January 1Amnesty period to clean up legacy noise. Noise driven by legacy field, corporate, and AMT SMS activityCommunicationsLocation: Livelink, and the option of an automated email. Performance Visibility of your local territory and top level view of all other distributersSlide10
Field Operations Managers and OperatorsRequests for policy from the field to drive compliance with purpose of Loaners
Feedback on reporting from the
Inventory ControlImpacted by Lost/Wasted and inventory mutations
Asset ManagementImpacted by transferring inventory from Loaners to DIFinance
Allocation of Debits(GOAL IS TO NEVER COLLECT A DEBIT JUST GET STOCK BACK ON TIME)
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Key StakeholdersSlide11
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Policy Application
* Legacy Biomet Loaners is transitioning to SMS from September-December 2016. All loaners will be sourced via SMS by January 2017. Legacy Policy applies until in product is in SMS. This extended transition allows Legacy B loaners to continue operating during transitionSlide12
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