Monday, September 9, 2013
Challenges with Inventory Management in Healthcare Industry
Healthcare organization and hospitals, depend on endowment income, at least to a certain extent. Hence they are bound to handling situations wherein they have less financial resources to work with but are forced to maintain the organization’s standards even with these plummeting budgets. In such a situation the organization cannot afford to have its financial resources tangled up in hidden inventory. Fine tuning is needed to save money.
But in a hospital fine tuning requires tremendous effort because there are many teams and departments that work in collaboration to ensure that the required supplies are available readily at the point of use (for eg: OR). In this situation the burden of maintaining this supply is on the nurse which unfortunately detracts him/her from their main job of caring for the patient. But this collaboration is inevitable because every patient-care area is exclusive having different supply requirements depending on the types of patients and procedures. Based on a historical data we might draft an inventory management system but the question of how much to keep on hand remains a difficult one to answer. Moreover patterns drawn from history will not be appropriate with the orders that might erupt from nowhere and come grouped in large numbers; thereby making it very hard to keep the demand numbers realistic when planning. Also the individual patient care units may have unusual supply requirements, at times becoming just another inventory location. With FIFO being employed in most hospital systems, changes in demand are hard to respond to and of course as mentioned in class ‘Variability is bad’. This eventually affects the central inventory flow and is not desirable.
As health-care budgets explode and patient demands rise, it’s increasingly important for health-care organizations to focus on the effective and efficient use of their resources. Harnessing the scope of inventory management is a comparatively effective way that would improve supply utilization but this is difficult to implement and execute.
What could be a probable solution which is considerably easy to implement and execute in such organizations? Do the formula mentioned in other articles for the week need to be re-thought upon before being applied to such integral and vital industries?