The Top 3 Monsters Making Inventory Management Scary All Year Long
We've assembled our very own monster squad of the worst threats to effective healthcare inventory management. These common issues will take a bite out of your time, suck dry your budget, and generally wreak havoc on your ability to deliver your patients and communities the best possible care.
And the difference between these and the monsters that we usually celebrate around this spookiest of seasons is that the problems we're discussing today are real. (Please don't come after us if you are a practicing witch. We have lots of supplies for sale but probably none that can be used in a ritual.)
Night of the Living Dead Stock
Although it's commonly used in healthcare inventory management, we don't love the term "dead stock" for a couple of reasons. One: because its usage is inconsistent and might refer to product that is no longer used and might end up expiring, or it might refer to product that's already expired. Two: because product that's already expired can't be saved.
There's no cure for expired supplies. There's no hospital in America that wouldn't immediately double-tap them into the nearest disposal receptacle & then the dumpster.
While they're not infectious in the way most movie zombies are, they do multiply. Your expired oxygen masks aren't walking around biting the supplies near them, but if the same old practices are followed over and over - if you've got a bin of masks, and every time you get a new shipment, you throw the new masks on top of the others - the number of expired products expands to an unsustainable level.
Maybe your clinicians or supply chain staff find expired product, dispose of it, and order replacements immediately. But 28 days later, that same staff find out that, even though the whole shelf has changed, it's stayed exactly the same. There's the same amount of expired supplies as before.
They haven't addressed the root cause of expiration, which is a failure to base ordering on usage. The only cure is prevention. You have to wage World War SC to prevent the existence of expiration in the first place. Chances are good that you don't have the resources to identify and remove all your excess before it expires. That means a lot of your excess is taking up space on your shelves, and you're paying for that every month.
30 Days of Carrying Costs
Lurking in dark shadows throughout your shelves are supplies that might seem harmless. They might even have some inexplicable allure to them. One of your clinicians feels the pull of one brand over another, or the obsolete product is a romantic reminder of the way healthcare was in a simpler time.
But they're sucking your finances dry. You're paying for your excess supplies every second that they're on your shelves, and if they're all going to turn to dust before they can be used, every cent spent is one wasted. That reflects badly on any healthcare provider's supply chain or finance department.
We've spoken before about how carrying costs can be what's impaling your supply chain budget (maybe not in those exact terms, but still). See a specific example in our webinar co-hosted with Steward Health Care about how much they were able to save by identifying their excess inventory and getting it off shelves where it was bound to expire.
What we do in the shadows where these supplies lurk is turn on the light of predictive analytics and stake them in the heart with a logistics network that finds a suitable place for them to be turned into productive members of a hospital society or else buried forever before they can become more of a problem.
But that only works if we have an accurate view into what is on every shelf across every facility across a health system.
The Bride of Frankensteined-Together Inventory Management Systems
(Okay, they've all been stretches, but that one's the stretchiest.)
Every health care provider has (probably) got some form of ERP. But how well is it sewn together with every other part of the supply chain management process?
You're probably not ordering every product in use in your facilities through your ERP. (And if you are, you're missing out on savings from secondary market vendors who have the supplies you need at reduced prices.) You're probably not keeping an active eye on every shelf through a system that directly feeds into and updates your ERP. (And if you are, you're probably only doing it in certain areas, so you still have to mix-and-match your inventory management.)
Nuts-and-bolts daily supply chain management is a horror show mix of solutions that only work together through an immense amount of work by hand.
The typical annual inventory count is a prime example of handwritten numbers that becomes hand-entered data. Maybe your loyal assistants are completely accurate about counting everything that's on the shelf. That's not very likely, statistically speaking, but maybe you've got some abnormal brains on your side. Even then, are your helpers' eyes good enough to identify inventory trends at the shelf level and immediately identify potential dead stock before it becomes unusable?
Also not very likely.
Don't wait around for lightning to strike. Start using a system that enables accurate counts at the shelf and supplements them with immediate analytics that identify the smoke before it becomes a terrifying fire. Find a software and staffing partner that was built to your exact specifications and can continue to adapt as your needs do.
As we come to the end, we are of course obligated to ask: is expiring inventory the monster, or was the real monster us all along? Have these medical and surgical supplies only turned against us because of the shortcomings of mankind?
The answer is: who cares. The problem is clear. The solution is simple.
In every generation, there is a chosen one. They alone will stand against the expired, the carrying costs, and the forces of suboptimal inventory management.
They are... Z5 Inventory. (But that was obvious by this point, right?)