One of the many hidden challenges in hospital systems is to ensure required supplies are readily available and in the right quantity. Significant manpower is invested in material management so that patients receive care without interruption. An optimized supply system that uses modern technology and centralized distribution will help minimize costs and improve patient care.
When a person requires immediate care in the emergency room (ER), the medical staff often uses considerable supplies while attempting to diagnose the issue. These are pulled from cupboards, storage carts, and supply closets nearby. If the required item isn’t found where expected, commotion ensues. To avoid a repeat situation, staff replenishes supplies in higher quantities, and the extra inventory is “hidden” in certain places throughout the ER by individuals, without the general knowledge of others on the team.
Over time, inventory levels increase in these stockpiles, yet the supplies continue to be ordered and stored. Not only are the invisible supplies taking up valuable space, the items also may expire or be recalled. At the end of the year, inventory reconciliation reduces this stock to a certain amount, which consequently causes shortages later on, fueling the vicious cycle anew.
Challenges Faced by Clinics:
Many hospitals try to maintain an internal “hub-and-spoke” supply model. This involves a central warehouse (the hub) for daily purchasing, goods receipt, storage, counting, and picking for delivery. The warehouse supplies multiple storage locations (spokes) of varying size and type (cupboard, cart, bin) for which random methods of refilling are employed. By eliminating these different “spokes” and replacing them with a supplier to point-of-use distribution model, we can enhance supply-chain efficiency. However, before this can be implemented, we need to understand the strengths and weaknesses of the current material management situation.
Common issues include:
•High spending with zero accountability and control. State-of-the-art inventory management systems that automate the inventory reconciliation and visibility process are scarce in the healthcare industry. The amount of work performed by hospital staff to maintain correct levels of inventory is monumental and often done using an archaic supply system.
•Poor inventory visibility due to lack of data systems. It is nearly impossible to easily track product usage, and inventory levels are often much higher than actually needed, which creates a cost burden.
•Manually driven processes. On-hand stock is usually controlled manually by the material management staff, which counts individual products and generates orders to keep stock replenished for that day. Sufficient levels are therefore rough estimates consisting of a “best guess” or visual scans. To complete these activities on a daily basis requires a large labor force.
•Lack of tools and standard work processes. If the patient flow increases and supplies are low, the quick fix is to call the storeroom and have the items delivered to where they are depleted. Because this occurs frequently and without warning, individual departments have developed their own contingency methods to mitigate inventory shortages. Acting as the “supplier” to these internal customers, the material management department has little or no visibility to validate the actual product usage. The result is a multitude of hidden processes that foster the growth of inventory and special handling procedures.
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