The Healthcare Hub

Top 7 Hospital Inventory Best Practices

Thursday, September 14, 2023

Hospitals and other healthcare facilities rely on a vast array of medical equipment and supplies to provide high-quality care to patients. In the fast-paced and dynamic healthcare industry, managing inventory effectively plays a pivotal role in ensuring smooth supply chain operations, cost savings and optimal patient care.

However, inefficient hospital inventory management can lead to stockouts, delays in treatment, increased costs, and compromised patient outcomes. By implementing best practices in healthcare inventory management, medical facilities and healthcare organizations can streamline processes, reduce human errors and enhance overall efficiency. 

 


 

Table of contents

  1. Streamlined inventory processes
  2. Inventory management optimization
  3. Centralized, categorized inventory storage
  4. Automated inventory management systems
  5. Staff training and education
  6. Audits and performance metrics
  7. Optimized physician preference cards

 


 

1. Streamlining inventory processes 

One of the key steps in managing inventory effectively is conducting a comprehensive inventory assessment. This involves taking stock of the existing inventory, identifying expired items or overstocking and establishing a baseline for future management.  

Additionally, implementing an inventory management system can significantly improve efficiency by automating processes such as tracking, ordering and replenishment. Automated hospital inventory management systems enable real-time visibility into inventory levels, helping materials managers make informed decisions and reduce inventory supply costs by avoiding stockouts or overstocking. 

 


 

2. Inventory optimization  

Routinely checking par quantities within Par locations to ensure effective levels are established can help prevent stockouts and minimize the expense of unused inventory. Unused inventory is also at risk of expiring.  

Using artificial intelligence, an automated inventory management system can provide analytics that review historical usage data for each item within a Par location. If usage is high or the item is experiencing stock outs, the reporting will recommend a higher Par quantity. If the inventory is moving slowly, a Par quantity will be recommended to reduce the on-hand quantities which will lower inventory costs associated within expensed locations. 

 


 

3. Centralized and categorized storage 

Organizing inventory in a centralized manner promotes efficiency and reduces the chances of errors. Healthcare facilities should establish dedicated storage areas for medical equipment and supplies, keeping them easily accessible to staff members.  

Segregating inventory based on product type, expiration dates, and usage frequency allows for efficient retrieval and reduces the risk of expired or misplaced items. Implementing first-in, first-out (FIFO) and last-in, first-out (LIFO) systems further ensures proper rotation and utilization of inventory. 

 


 

4. Automation and inventory management systems 

Incorporating automation and technology into hospital inventory management processes can yield substantial benefits. Automated inventory management systems eliminate the need for manual tracking and record-keeping, reducing human errors and improving accuracy.  

Cloud-based inventory management software enables real-time access to data from anywhere within the healthcare facility, ensuring up-to-date information on inventory levels and facilitating timely decision-making. Integrating inventory management with enterprise resource planning (ERP) and electronic health records (EHR) systems streamlines processes and enhances overall efficiency. 

 


 

5. Staff training and education 

Engaging staff members and providing comprehensive training on healthcare inventory management processes is crucial. All staff members involved in inventory handling should be trained on the correct procedures, including receiving, storing, and issuing inventory.  

Promoting a culture of accountability and ownership among staff members encourages adherence to inventory control protocols and reduces the likelihood of errors. Regular education sessions and opportunities for feedback enable continuous improvement and fosters a proactive approach to inventory management. 

 


 

6. Regular audits and performance metrics 

Regular inventory audits are essential to maintain accuracy and identify any discrepancies or inefficiencies. Conducting periodic inventory counts, known as cycle counts, helps reconcile the recorded inventory with the actual count, ensuring data accuracy.  

By regularly verifying the quantities of medical supplies, health systems can swiftly detect discrepancies, reduce waste, and make informed decisions about replenishments, thus safeguarding against stockouts or overstock situations, which can impact patient care and operational efficiency. 

Additionally, tracking key performance indicators (KPIs) such as stock turnover, stockouts, and carrying costs provides valuable insights into inventory management performance. Analyzing the collected inventory data enables materials managers to identify areas for improvement and implement targeted strategies. 

 


 

7. Optimizing physician preference cards 

Physician preference cards (PPCs) document each surgeon's specific preferences for instruments, supplies and equipment required during surgical procedures. These cards play a pivotal role in ensuring efficient and personalized patient care, but they also hold significant implications for inventory management. 

Nowadays, it is possible to synchronize and automate physician preference cards based on actual supply consumption in order to reduce waste and the costs associated with it. When PPCs are regularly updated to reflect current needs, hospitals can better forecast demand, minimize stockouts, and prevent over-purchasing.

This not only streamlines inventory processes but also enhances the overall efficiency of surgical operations, as staff can quickly locate and set up the required items, leading to smoother surgeries, better patient outcomes and increased procedural throughput. 

 


 

Key takeaways for healthcare inventory management

Efficient healthcare inventory management is essential for delivering optimal patient care while reducing costs and mitigating human errors. By embracing best practices such as streamlining processes, implementing an automated hospital inventory management system, accurate demand forecasting, and leveraging technology, healthcare facilities can achieve greater efficiency, improve patient outcomes, and enhance the overall healthcare supply chain.  

Continuous improvement, staff training and regular audits further contribute to a well-managed inventory system, ensuring that healthcare facilities are well-prepared to meet the demands of the ever-evolving healthcare industry. 

 

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Jeff Elmhurst

Inventory Solution Specialist
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