Inventory Tune-Up Drives Yearly Savings
Often we hear, when talking with hospitals that they only expect to get a one time savings with our inventory solution. They’ll say, “With your solution, we are really only going to see a reduction in inventory on the initial install of your product. Thus, only realizing a one-time cost savings.” This has been their experience in dealing with other inventory companies over the past 20 years.
Since supplies are the BIGGEST non-labor cost for a department, today’s healthcare should expect more from an inventory solution. After all, supplies do have impact on more than just supply chain. Accurately documenting what supplies were used on what patients, by which physicians, provides very valuable analytics that provide insights that help better manage your inventory. In addition, this has a direct impact on hospital revenue and improving the documentation of surgical procedures.
According to HealthITAnalytics, “this is a marathon, not a sprint, and it requires connecting cost, clinical and supply chain data and analytics to drive significant change over the long term.” A good inventory solution should help you endure the race and give feedback on how you are doing throughout the race. Like a Fitbit watch or perhaps the RunKeeper app that is able to give you real time feedback on factors like your pace, distance, and time that help you to achieve your goals.
What factors would you want to have visibility on that would better help you to manage your inventory?
- Procedure Volumes (Demand)
- Procedure Consumption Data
- Physician Preferences and when they change
As procedure volumes (or demand) increase, so does the inventory you need on hand to support additional procedures. The same is true when demand is low then you may want to consider decreasing your inventory on-hand.
Procedure consumption data is very valuable. Not only is it important from a documentation and charge perspective, it also provides insight on how much you’re using so you can “right-size” your inventory to be able to meet the demand. It can provide visibility into what you are not using so you can consider removing some products from your shelves. Healthcare lives in a world where you cannot run out of anything at any time, but wouldn’t you like to know that you haven’t used something for an extended period of time (i.e. 2 years).
Physician preferences on what devices they prefer to use can have a big impact on your inventory. As preferences change, it’s out with the old and in with the new. Are you really made aware of what devices are no longer being used? What about if you have physician turnover? How do you know what devices are no longer in demand?
Over time these factors can change and can impact your inventory. Not knowing when these factors change and properly adjusting to it, can lead to having more inventory on hand than you need. More importantly, it can lead to having products that you are no longer using and become at risk for expiration.
In these days, you should expect more from a solution. Our solution has the tools to make you aware of these factors. One of our customer’s is a great example of this. They have been able to continually “right-size” their inventory by having reliable data on these factors. By right-sizing inventory, it allows most efficient use of the limited space in a surgical area.
In the graph below, our customer has had our system installed for 5 years. As you can see in the graph below they have been able to continually “right-size” their inventory well after the installation. Notice that in a year they decreased their on-hand inventory by 14%. At the same time the # of devices used increased 22%. That means as business grew their inventory shrunk.
After installation our customers are able to continue to “right-size” their inventory with the insights that our system provides. In addition to the software tools that are available to customers, Mobile Aspects makes it a priority to review this information with customers a few times per year.
Inventory is a marathon, not a sprint, and you need to align yourself with a solution that can help provide visibility on these factors so you can contain the biggest non-labor cost for your department.
If there are other factors that you would like to have visibility on (that I haven’t mentioned in this article), then please leave a comment.