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ASCM Insights

Keeping Tabs on Critical Supplies

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Although many industries have fully embraced the benefits of automated inventory management systems, hospitals have yet to catch up. A new report from Cardinal Health and SERMO has uncovered that 78 percent of surveyed hospitals still use manual methods of inventory management, according to RevCycle Intelligence.

When automated systems are not handling inventory management at hospitals, the duty tends to fall on frontline clinicians. These workers estimate that they spend about 2 hours per shift—an average of 17 percent of their workweeks—on inventory management responsibilities. When they are focusing on these supply chain issues, they spend less time caring for patients. As a result, 65 percent of the frontline clinicians surveyed said they wished they could trade their supply chain management responsibilities for more time with patients. 

Of the other hospital staffers who help with inventory management tasks, nearly two-thirds of service line leaders and 59 percent of administrators said they would prefer not to have to manage inventory tasks. 

If supply errors occur, the consequences could be serious for patients. Of the hospital staff surveyed, 57 percent recalled a situation in which a provider did not have the necessary items for a patient procedure, and another 24 percent said they had seen or heard about other staffers using expired or recalled products on patients. 

In spite of these risks, hospitals are slow to implement automated inventory management tools. RevCycle Intelligence pointed to a few barriers, namely

  • perceptions of high costs
  • lack of knowledge about available options (For example, more than one-third of respondents did not know about radio-frequency identification.)
  • the need to increase hospital-wide buy-in
  • other priorities.

Instead, the top priority of many hospitals is financial challenges. However, many respondents agreed that automated inventory management processes would actually help improve a hospital’s financial situation. 

The bottom line: Patients and hospitals have the opportunity to benefit from automated inventory management. It’s time to increase information in this important area and bring the industry up to speed. 

The right tools for the job

Whether you work in a medical facility, a warehouse, a production facility, or even in an office, it’s important that you have the right tools to do your job and serve your customers. Consider this description of the purpose of inventory from the APICS Operations Management Body of Knowledge (OMBOK) Framework: “Inventory's primary purpose is to meet demand in support of production or Customer Relations. Inventory is an expensive asset and needs to be carefully managed and controlled.” The APICS OMBOK goes on to note that a critical facet of inventory management is keeping inventory in up-to-date, usable condition. 

For years, inventory management has been one of the core pillars of the APICS body of knowledge. On top of that, APICS continuously works to bring you the most up-to-date content to help you support your company and enhance your career. This is one important reason why we chose to update the APICS Certified in Production and Inventory Management (CPIM) designation. The revised, two-module program streamlines the exam and preparation process to help supply chain professionals master the essential production and inventory terminology, concepts, and strategies in an even more effective and efficient manner. Keep an eye out for more information about this enhanced program in the coming months.

In the meantime, to learn about how earning your CPIM designation could make a difference in your career, visit apics.org/CPIM.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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