| Imagine this: You walk into a local bank to open an | | | | what level of attention to supplies might be needed. |
| account. As you're speaking to a bank representative, | | | | Here are some of the symptoms: |
| you notice that there are no tellers. Instead, customers | | | | |
| seem to be walking into the unguarded vault and | | | | 1. Shortages. If we don't know with precision what we |
| helping themselves, either depositing or taking the cash. | | | | have, then an inevitable results will be a higher level of |
| The bank rep explains: "We can't really afford to hire | | | | shortages. The results can be serious for our patients, |
| people to just keep track of the cash, so we operate | | | | and also drive high expediting and overnight freight |
| with the honor system. When you take some cash or | | | | costs. |
| drop some off, you are supposed to leave us a note. | | | | 2. Inaccuracies in billing. Not everything gets billed out |
| Once a month we'll do a count and reconcile the | | | | correctly if we don't have tight reins on inventory |
| balances. Most people are pretty good at following the | | | | management. |
| system, but we always have some variances to write | | | | 3. Excessive supplies handling. The "par level" method |
| up or down. But paying tellers to just keep track of the | | | | used to assess inventory needs is horribly inefficient. It |
| cash is a waste we just can't afford." By this time | | | | should be replaced with the system used by most |
| you're running for the door. | | | | world-class organizations, kanban. See my ezinearticle |
| As ridiculous as this seems, this is exactly the way | | | | on Par and Kanban. |
| that many (most) hospital OR's handle their supplies | | | | 4. Inaccurate financial statements. The accounting rules |
| and materials. Much of the material in the OR falls | | | | tell us that if we don't really know what we have, we |
| under the inventory classification of A items, items with | | | | also don't really know what our costs are for any |
| a high dollar value. Examples of A items include | | | | given financial reporting period. |
| implants, stents, and grafts. The dollar value of this | | | | 5. Excess inventory. If inventory records are not |
| material in the OR can easily total several million dollars | | | | accurate, we tend to compensate by overstocking. In |
| or more, and represent 70% of your total inventory | | | | a recent improvement project, we removed over |
| investment. | | | | $500,000 in excess inventory from an OR, without |
| How do we keep track of all of these dollars, in the | | | | breathing hard. |
| form of supplies? Very few OR departments actually | | | | What should you do about managing A items? There |
| maintain a perpetual inventory system, that keeps | | | | are several possibilities, ranging from the very manual |
| track of material like a bank keeps track of cash. In | | | | to the high tech. The simplest suggestion is to do what |
| other words, at any given point in time the OR doesn't | | | | most high performing organizations do: have a |
| really know what is in stock without physically looking. | | | | quick-response stockroom in the OR, with individuals |
| Complete physical inventories are done periodically, | | | | assigned to inventory control, inventory transactions |
| sometimes as infrequently as every six months, and | | | | and patient service for materials. Set a goal of being |
| there are significant accounting write-ups or | | | | able to put your hands on any item within 10 seconds, |
| write-downs whenever this is done. Needless to say, | | | | and set up the storage area to be able to accomplish |
| this is a source of heartburn for the hospital financial | | | | this. Plan to staff the area for hours that match the |
| department as well. | | | | schedule of OR need. |
| So why is this apparently common state of affairs, | | | | An intermediate-level solution would involve the use of |
| something that would be unacceptable in a bank or | | | | bar-codes to speed up transactions and reduce errors. |
| even a manufacturing company, allowed to continue in | | | | Nurses and techs can be trained to use the bar-code |
| hospitals? Here are some of the reasons we hear: | | | | system, and reduce the workload on the materials |
| | | | staff. Barcoding is not a new technology, and virtually |
| 1. Our focus is on the patient. We can't expect nurses | | | | every inventory system supports it. |
| and doctors to become "bean-counters". They're too | | | | On the high-tech side, install RFID-based cabinets. An |
| busy. | | | | RFID cabinet is a locked storage container that is able |
| 2. Supplies and materials are often needed urgently. | | | | to track what is inside via a Radio Frequency |
| We can't slow down to fill out paperwork or transact | | | | Identification tag attached to each high-dollar item. In |
| what we need, because it's too time consuming. | | | | order to unlock the cabinet an employee badge and a |
| 3. We can't afford to hire any new FTEs to track | | | | patient case number are needed. The RFID cabinet |
| materials, because that's just another overhead | | | | has the advantage of being able to capture billing |
| expense, and we need to control costs. | | | | information in addition to inventory information, and |
| 4. That's not the way things are done in a hospital. | | | | greatly reducing human error. |
| Before we offer some suggestions for improvement, | | | | Regardless of the path you choose to follow, it is |
| let's take a look at the hard costs related to lax | | | | important to make a commitment to a high level of |
| inventory management. In that way we can make a | | | | inventory control for A items in the OR. This effort will |
| more informed decision about what we can afford, or | | | | pay for itself many times over. |