The Case for Outsourcing CPAP Resupply Order Fulfillment

Published in Member Communities on November 01, 2023

The Case for Outsourcing CPAP Resupply Order Fulfillment By Boone Lockard, Director of VGM Respiratory, VGM & Associates and Matthew Flaherty, Director of Sales, VGM Fulfillment

In the realm of CPAP machines and resupply order fulfillment, providers often grapple with a crucial decision: should they handle it in-house or outsource the process? From cost savings to technological integration, there are a number of compelling reasons why outsourcing CPAP resupply order fulfillment can be a game-changing solution for providers.

Cost Savings

Managing CPAP supplies involves a spectrum of expenses, including materials, equipment, inventory, insurance, software solutions, and labor. These costs can swiftly accumulate. Outsourcing to a different party that provides a comprehensive solution that takes care of all these facets would allow for greater cost savings.

Inventory Management

A major burden for providers is the management of inventory carrying costs. By allocating inventory management elsewhere, providers would see a reduction in labor costs within operations, further enhancing cost-effectiveness.

Staff Allocation

With staffing issues rippling through the industry, providers must be mindful of how they allocate their staff to ensure daily operations of the business continue.

By entrusting the fulfillment process to experts instead of spending one's own time managing inventory or shipping supplies, providers can redirect their valuable staff resources where they are needed most - with the patients, not confined within a warehouse.

A Comprehensive Solution

VGM Fulfillment offers a comprehensive solution that covers all these facets, including greater cost savings, optimized staff allocation, and reduced inventory costs.

For example, suppose you have approximately 1,000 active CPAP patients and are onboarding roughly 50 new patients each month. Each of these new patients orders about two masks per year. Your warehouse stocks products from around six different vendors, and your inventory turnover rate is approximately three times per year. The personnel overseeing purchasing, shipping, and receiving are paid approximately $19 an hour, and they each spend 20 hours a week fulfilling their duties.

If we factor in overhead costs, which include rent, hourly wages, benefits, packaging costs, and average freight expenses, the total comes to approximately $63,000 for shipping products in a year. However, if you were to outsource your CPAP resupply fulfillment to VGM Fulfillment, the cost would be approximately $32,000. The key difference here is the savings of nearly $31,000 by outsourcing your CPAP resupply fulfillment. This calculation doesn't even account for the improved cash flow resulting from a reduction in inventory.

VGM Fulfillment services also have a proven process that speaks for itself.

Technological Integration

VGM Fulfillment seamlessly integrates with billing software, which streamlines the order submission process. The service provides vital delivery and shipment confirmations, ensuring compliance and keeping patients informed about their shipments. With dynamic order routing, orders are expedited to patients in the fastest and most efficient manner possible.

Speed, Accuracy, and Reliability

VGM Fulfillment boasts an impressive track record, with a 98.15% order fill rate and a remarkable 99.85% order accuracy rate, so patients can ensure their orders are processed promptly and accurately. Patients can also expect their orders to be shipped in full, eliminating the possibility of partial or split shipments.

Robust Distribution Network and Value-Added Services

With distribution centers strategically located in Iowa, Tennessee, Arizona, and Pennsylvania, totaling over 350k square feet of warehouse space, VGM Fulfillment ensures swift and reliable delivery service. VGM Fulfillment also houses a substantial inventory of nearly 3,000 SKUs, which is consistently maintained, and over 7 million packages are shipped annually. VGM Fulfillment also offers additional capabilities such as Business Continuity and Disaster Recovery (BCDR) capabilities to ensure uninterrupted operations.

Proven Processes and Expedited Order Processing

VGM Fulfillment relies on tried-and-true order fulfillment processes, fortified IT infrastructure, and sound inventory management practices, effectively reducing operating costs. In fact, they operate on a model where payment is made only upon product sale, significantly reducing financial risk. This approach also leads to a reduction in labor costs within operations, further enhancing cost-effectiveness. Finally, swift processing times by VGM Fulfillment mean that on average, patients receive their orders within only three days.

Outsourcing CPAP resupply order fulfillment to a specialized provider like VGM Fulfillment presents a myriad of advantages. This approach not only streamlines operations but also allows providers to channel their energies towards what truly matters - delivering exceptional patient care.

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