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Is Inventory Killing Your Bottom Line?

Michael Wilson | Jul 23, 2015

Category: Healthcare

For some healthcare managers, inventory is one of those necessary evils, something that has to be dealt with even though it's usually difficult and time-consuming to do so. But if ...

healthcare_inventory_management-1For some healthcare managers, inventory is one of those necessary evils, something that has to be dealt with even though it's usually difficult and time-consuming to do so.

But if you aren't practicing proper healthcare inventory management, you're running the risk of destroying all of the profits that everyone at your facility has worked so hard to hold on to. According to the NiH, most hospitals, and medical establishments spend roughly 35% of their budgets on supplies and labor to manage inventory and information flow.

Sure, you probably have methods that you use to optimize your supply chain management but are they really as effective as you think? There are probably some hidden costs to your healthcare inventory management that you haven't even thought of before, but just because you aren't aware of them doesn't mean they aren't slowly bleeding away your profits. And the only way to stop it is to discover the true costs of your inventory.

3 Hidden Costs of Healthcare Inventory Management

These inventory factors can easily cost you money without you even realizing it:

  1. "Invisible" items that get pushed or knocked into a new place when someone is frantically searching for a particular item or tool. After that, these items are hard to find because they aren't in their normal place.
  2. Outdated inventory systems that either aren't tracking things properly or can't be understood by new employees or others without as much familiarity with the specific system. It can take years for a hospital or healthcare facility to realize that their systems are hurting their inventory management.
  3. Many locations for inventory. This is a tricky one because it's sometimes wise to keep your inventory in multiple places. But many facilities overdo it and spread themselves too thin, which wastes space and causes uncertainty about how much of a certain type of item is actually around.

Every facility has its own set of healthcare inventory management thieves. So what can you do to make sure that yours isn't falling prey to these problems?

3 Tips for Lowering Your Inventory Cost

Fortunately, there are plenty of techniques that you can employ to help minimize these costs and make your inventory work for you, not the other way around:

  1. Sort and organize your inventory, it’s worth it! You don't always have to do a full count (although these are very helpful) but from time to time it's wise to take a couple of minutes to straighten up. You might find items that are lost or misplaced.
  2. Get feedback from other team members. Often times, doctors and nurses can give the supply department unique insights that they might not have ever thought of, simply because their function at the hospital or facility is different.
  3. Use lean or just-in-time ordering. This technique can take a bit of time to master perfectly depending on your facility's inventory flow, but once you get it down it will save you lots of space and wasted money ordering things you don't need

So the question still remains, is your inventory putting a strain on your bottom line? Yes! Always be evaluating your inventory and looking to sniff out these hidden costs so that you can keep your operation running smoothly and profitably at all times.

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