Inventory Management

Supply management is a term that applies to identifying, acquiring and managing the resources needed to keep a business running. Laboratories need materials to keep a continuous workflow for patients whom need results that may affect their care quickly. Test orders need to be processed in a timely manner. Yet you can’t have a glut of inventory because of the expense and possible expiration before use. There has to be enough inventory in just enough time.Inventory Management

Lean Six Sigma is a methodology that relies on a collaborative team effort to improve performance by systematically removing waste. There are eight kinds of waste: defects, overproduction, waiting, non-utilized talent, transportation, inventory, downtime and motion. Inventory can refer to over ordering in the lab. Anything in your lab not being utilized is considered lost revenue. The flip side of that is having stress from supplies being sent at the last minute to decrease lost revenue, but then incurring the extra shipping costs of express delivery. Optimum supply management is a perfect marriage of making sure that the supplies are both available and ordered in a timely manner without excess.

This can be a balancing act that takes some thought to be successful. Different manufacturers have different timeframes for getting your supplies to you. Yet, if you order more than the imminent need, the materials can expire. These materials can become “distressed inventory.” This is inventory that is expired and, therefore, a loss to budget. This makes laboratory inventory a very important facet of managing a lab. It is also a marker of quality control that someone is keeping a close tab on the expiration dates of all of the items found in a lab.

Of course, one must also consider the number of samples that their specific lab requires for reagent quality control. If your lab requires a large enough number of quality control tests, then ordering supplies in larger quantities makes sense. In addition, when you have a large number of supplies, having a large order of one lot makes it much easier to keep the expiration dates and lots organized. There is many staff involved with putting away inventory in larger labs, and a smaller number of the inventory can get lost in the shuffle and potentially expire. Obviously, this is lost revenue for a lab.

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There are many facets to supply management. This is what makes it more complex than what is taken into consideration. If staff isn’t trained to organize supplies with the earliest expiration out, revenue is lost. If usage is not taken into account, supplies become “distressed inventory.” In these days of tighter lab budgets, inventory management should be at the forefront of many managers’ minds.

Here are a few ideas for inventory management. On the more simplistic level, labs can utilize a sticker system. Each item of inventory is counted, and that number is counted over the total and put on the sticker. For example, 10 of 10 is used first and placed on a user worksheet. This will allow you to date when inventory is used and may allow you to keep a handle on when to reorder by seeing how long it takes for a set number of inventories to be used.

The minimum number of inventory on your shelf should be flexible. There may not be as many of one lab test, such as influenza, ordered in the summer. This test order number can be increased in the fall and decreased in the summer, for example. Inventory should be counted as often as possible, but with enough time to have an impact on usage. This must be defined lab-by-lab.

Another simple inventory control monitor is to mark the last box or boxes as “must order.” Of course, this depends on staff alerting the person in charge of ordering. If you have the space in your facility or off-sites, you can utilize Kanban. This system was developed by Taiichi Ohno, an industrial engineer at Toyota, as a system to improve and maintain a high level of production.

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