Manage Inventory As Thoughtfully As You Do Patients



Inventory management seems like a simple concept. Any organization wants to have “what you want where you want it when you need it.” If it’s there, everything goes smoothly. If it’s not, things start to fall apart.

In a healthcare facility, poor inventory management might show up in numerous ways. Imagine during your first week on the job in a hospital, you go to supply closet D2 where you’re told suture packs are stored. You find one of these conditions:


  • Supply closet D2 has no suture packs…and never did.
  • One shelf has a label for suture packs…but it’s empty.
  • Six suture packs are on the shelf but none are the specific type and size ordered by the physician.
  • A shelf labelled “suture packs” is empty except for a note saying: “suture packs moved to closet E6.”
  • A note on an empty shelf says “suture packs put on order January 24.”
  • One suture pack is on the shelf, but it has an expiration date that passed two months earlier.
  • One suture pack is there, but it is open, thus no longer sterile.
  • One suture pack is there, but it is on a recall list for possible contamination.
  • The large suture pack shelf has hundreds of suture packs of half a dozen types, requiring manual inspection to find the right one.
  • Suture packs are now locked in the head nurse’s office to avoid hoarding.
  • The suture pack has been defined as a controlled substance and is now locked in the dispensary.
  • The supply closet is so completely disorganized that you can’t find anything.

By your second week on the job, you’ve probably found a hidden spot near your workstation to stash away a few suture packs and other supplies so you’re not stymied the next time.


SEE ALSO: Optimize Referring Provider Communications to Help Improve Patient Care

A suture pack is a relatively simple example of healthcare supplies. Multiply these issues by the thousands of supplies that the hospital uses each day, many with more critical impact than suture packs. The result of any of the situations above can be frustration and stress, delay in procedures, substitution of inferior products, higher costs, errors caused by rushing, patient dissatisfaction, and even physical harm to the patient.


Inventory management makes things better

It is possible to put a system in place to track supply orders and deliveries, maintain par levels (periodic automatic replenishment), manage recalls and obsolescence, monitor supplies usage, and minimize the “hunting and gathering” time and steps spent by nursing staff and technicians. All of this leads to lower staff stress, reduced costs, and better patient care.

The system will include consideration of central vs. distributed storage locations, degree of inventory controls, roles and responsibilities for inventory management, type of system tracking (e.g. manual or automatic), and review processes. At a detailed level, each supply will have a designated storage spot or spots, target par level, and specific monitoring. All hospital supplies must have inventory management. This includes not just suture packs and other surgical supplies, but also drugs, mops, batteries, printer ink, and anything else used on a regular or infrequent basis in the hospital.


Getting started understanding inventory

  • Form a team: An important first step is creating a multi-functional team. If your current inventory system is a mess, there may be lots of finger pointing between purchasing people and staff users. Bring representatives of both “sides” together to utilize the wealth of purchasing data and extensive set of user experiences to create a shared solution.
  • Observe the situation: Walk the floors together so everyone gets a good perspective of where inventory is currently stocked and how inventory management processes are currently working.
  • Build understanding: Before making any changes, articulate a shared mission (without casting blame), identify problems (and do root cause analysis), get educated in best practices in inventory management (in and outside of healthcare), and learn about inventory management systems (manual and automatic).
  • Classify inventory: Inventory is a huge target, with thousands of different materials in a typical hospital. The team will establish a prioritization approach. Often this considers criticality, frequency of use, and cost. Vital or fast-moving items need higher prioritization than non-critical or slow-moving items.

Tackling inventory problems

After the initial phase of understanding the current state, the team will start the work to make improvements, including several key decisions.


  • What kind of inventory management system will be used? Manual or automated?
  • Where will inventory be stored? Consider a balance to minimize excess inventory in numerous pockets across the facility vs. easy and quick access for real-time needs. Where and how will “bad” materials be collected and dispositioned so they aren’t counted as good inventory and don’t end up back on a supply shelf?
  • What are the appropriate minimum and par levels for each supply?
  • Who will manage inventory? This includes ordering new supplies, dispositioning damaged/obsolete/incorrect materials, and assessing ongoing needs?
  • What metrics will be used? The hospital will likely already have data on patient satisfaction, inventory turns, requisition delivery times, and carrying cost of inventory. The team may add cycle counts, quality assurance and other inventory metrics.
  • What training is needed? Methods to address inventory management, such as KanBan and 5S, may be unfamiliar to staff. In addition, change management training may be needed to get compliance when shifting from current practices.

SEE ALSO: Do You Know Where Your Equipment Is? Manage Distributed Inventory in Healthcare Facilities

If you’ve read the book “Who Moved My Cheese?” (actually written by a doctor), you know that mice (or people) can have huge problems when their cheese goes missing. In a healthcare facility, inventory is a big piece of cheese. When it’s there, things are great. When someone messes with inventory, it can start having an impact on daily processes for patient care. Panic, belligerence, and other dysfunctional behavior can occur.

Make sure you’re openly communicating with and engaging all members of the staff to address problems, gather suggestions, and pursue opportunities in managing inventory. The end result should be not only better patient care and lower costs, but also a smoother and less stressful environment. Contact EON to start an assessment of your inventory management performance in your healthcare organization.


Talk with an EON Opex expert to learn more

About the author

Nancy Bach

Nancy Bach has spent more than 20 years in the industry as a quality and operational excellence practitioner and manager. In private consulting, she creates and delivers a Lean Certification course, provides Green Belt training and works with multi-functional organizations to develop strategy and implement process improvement.