7 Hospital Inventory Management Tips To Reduce Costs

Medical Inventory Management | McKesson

Hospital inventory management is a challenging business as it involves continuous scrutiny from staff and administrators to ensure products are not overstocked or understocked. This is meant that the hospital meets its demand and does not suffer any financial burden.

Currently, there are so many ways you can ensure that you have effective hospital inventory management. One of them has been the use of the NetSuite consulting software, which can enable you to manage all your healthcare processes as a single system. 

This software will not require any maintenance fees, upfront license fees, hardware, or complicated setups. Through NetSuite consulting software, you can learn so many tips that you can apply in your hospital inventory management to reduce your running costs. Some of them are:

1.Implementing viable labeling and organizing practices

One of the main challenges that you can face in inventory management can arise from poor organizing and labeling practices. For instance, putting items in the wrong places, wrong labeling, haphazard organizing can affect the operations of your hospital.

You can improve your inventory management by stocking all products which are about to expire at the front shelves so that they can be used first. Through such a method, you may avoid wasting resources, this financial loss. 

On the other hand, in you mislabel your items, you may think that certain products are out of stock such that you end up buying more, which can increase your expenditure.

You can solve such issues by using double-checking labels into your system.

2. Automating all processes to eliminate human error

Through the Netsuite ERP, you can run all your inventory processes in the cloud. This can assist you in eliminating human errors such as purchase orders, data collection, and storage. 

This software can help you to correctly capture data at the start of your supply chain and manage it well throughout the process. By accurately capturing data, you can easily determine where and how costs can be reduced.

3. Monitor KPIs

One of the major tips of reducing costs in your hospital by tracking your inventory KPIs. As you track it, you can measure your cycle time, write-offs, rate of inventory turnover, fill rate, and write-downs. Thus, if you compare the results that you get against that of achieved by your hospital, you can know how well you are managing it so that you can minimize your inventory costs.

4. Implement an inventory system which is in time

In this case, you will try to order every product that you need at the right moment that you need it.

This method would reduce your inventory cost as it requires you to do the following:

  • Separate your one-stop business from repetitive orders.
  • Have a strong relationship with your suppliers.
  • Improve the quality of your program
  • Find long term suppliers for your products

This will enable you to know the products which are out of stock, the best selling items, low-selling items, and the trend in demand. This can enable you to order enough products which satisfy your demand.

5. Reduce your lead time

In this case, it implies that you shorten the time that you take to receive your purchase orders. By making the process shorter, you may reduce many of the costs involved in receiving your products. The reduction of lead time will work in many ways to reduce the cost of your inventory; some of the major ones are:

  • It will allow you to keep less obsolete products in the future.
  • You will order less stock, thereby reducing the cost and size of your warehouse.

6. Getting rid of obsolete stock

If you hold a lot of inventory, you might have a lot of stock in your store, which is not moving. This can take of space and cost a lot of money than the one you brought it. Whenever a crisis hit, stock will go up and down. We are seeing the effects now as cloth face masks are in high demand- an IoT inventory management system can help anticipate demand and keep your stock in check. 

If you have less but required stock, your costs will be minimized. In case you already a lot of obsolete stock, then you can try to give discounts so that you can reduce it. However, if you are unable to sell it you can donate it. After clearing your stock, you can create a lot of space where you can store your fast-moving products. This can enable you to get huge returns as you run your hospital.

7. Joining a group purchasing organization

This can also be one way you can use to reduce your inventory management costs. Through this organization, you can have more buying power as it assists in negotiating for lower costs, and in return, you may receive huge discounts for bulk orders.

These groups can also offer more options for creating healthy competition within the healthcare sector and purchasing supplies.