How can hospitals track and trace circulating inventory?

Image by Michiel4 – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=82986329

In my last post, I explored how inventory accuracy contributed to patient safety. I had explored the difference between financial accuracy and operational accuracy for inventory management and patient safety.

Many experts in the warehousing, distribution and supply chain consulting space have addressed the importance of inventory accuracy on margins. Rob O’byrne’s video on ‘The Best KPI for Supply Chain & Logistics’ deals with the subject elegantly.

Unfortunately, very few professionals address the issue of circulating medical conusmables, pharmaceuticals and other circulating items in hospitals. Rob O’byrne does, however, address a similar problem in the management, repairs and operations sector.[ii] He says that squirreling is one of the biggest hinderences to successful inventory management.

Squirreling is better known as inventory hoarding or hiding. It is both a cause and a symptom of a problem. This is most likely to occur when lack of availability motivates people to hoard the items to ensure that they can deliver excellent service.

Good Intentions

Although hiding inventory is done with good intentions, it actually makes the situation worse. In hospitals, it impacts operation costs but more significantly it can endanger patient safety. In order to fix the problem we need to look for the underlying causes which may include:

    • Poor availability of inventory in designated locations.
    • The desire to ensure that people have the items they need just in case it is not available when needed.
    • Clinicians know that inventory in hospitals are constantly circulating and may not be available in the designated storage areas.

The problem with these causes is that they get worse over time if nothing is seen to be done to fix the problem.

Fixing the Problem

The traditional ways to fix this problem in hospitals makes the situation worse. These have been:

    • Improve systems and processes. Determine what items and howmany ought to be held in the stores.
    • Create replenishment policies that are based on max/min inventory levels for all the items regularly used.
    • Integrate inventory management with other hospital processes to show what items are needed for procedures.
    • Introduce controls to physically restrict acess to inventory from designated stores.

Clinicians must have access to inventory for good patient care. The solutions to fix the problem make the situation worse because they do not address the basic concern that clinicians have – finding things when they need them most.

Improving the flow of goods only ensures that more items are hidden. Hospitals must find ways to assist clinicians to find items when they need them most. When this can be done hidning will become redundant.

Kevin Ashton solved this problem when he was working in the fast moving consumer goods industry. His solution is widely being used in the retail sector. It is unfortunate that it hasn’t found its way into the hospital sector.

The Vital Behaviour

The vital behaviour for solving this problem is to give clinicians the ability to search for things in real time. This is not a technology problem. This is a mindset problem. As Deming says, ‘It is not enough to do your best; you must know what to do, and THEN do your best.’

I have also written a book, ‘Hidden Hospital Hazards: Saving Lives and Improving Margins’, that deals with this issue, purchase it from Amazon or get a copy free from [here].

[1] Rob O’byrne (2019), ‘The Best KPI for Supply Chain & Logistics’, Supply Chain Secrets, https://www.youtube.com/watch?v=witWunLCEdI
[2] Rob O’byrne (2017), ‘How to Fix Your MRO Inventory Squirrel Problem?’, https://www.logisticsbureau.com/how-to-fix-your-mro-inventory-squirrel-problem/

Want to Reduce Harm, Save Lives & Improve Hospital Margins?

Subscribe now to discover how to simplify the tracking, tracing and recording of medical consumables and devices used, in real time. Get your free copy of our eBook: Hidden Hospital Hazards.

Book Cover

Want to Reduce Harm, Save Lives & Improve Hospital Margins?

Subscribe now to discover how to simplify the tracking, tracing and recording of medical consumables and devices used, in real time. Get your free copy of our eBook: Hidden Hospital Hazards.