Know Your Inventory Story

Automated Systems Take the Guesswork Out of Inventory

Cardiovascular surgeons at TriStar Centennial Medical Center in Nashville, Tennessee, don’t worry about running out of supplies. When they go into an operating room, the sterile kits, clamps, retractors, needles and other surgical instruments they need are always on hand, thanks to the heart and vascular center’s automated inventory management system.

Each time an item is opened in the OR, it gets scanned. The system keeps track of which items have been used and, when the supply needs to be replenished, automatically orders replacements from a nearby warehouse. “The automation ensures that we have what we need for each surgery, with no delays,” says V. Seenu Reddy, M.D., a cardiothoracic surgeon at Centennial.

Similarly, hospitals across the country are utilizing technology to build a more efficient supply chain management process. High-tech approaches can give supply chain managers an accurate and up-to-the minute read on which products are on their shelves, calculate their true costs and decrease the risk of costly inventory mishaps.

Automation in Action

In addition to TriStar Centennial, the University of Miami Health System, Columbus Regional and LifePoint Health have all turned to Parallon to implement automated inventory systems to simplify the process of providing effective patient care.

“Perpetual inventory applications allow users to log in and see what they have on hand at the hospital and at the warehouse, as well as what has been ordered,” says Noel Hodges, chief operating officer at Parallon Richmond Supply Chain.

While it’s become fairly common for healthcare facilities to operate such systems in the med/surg arena, most do not yet use these systems for pharmaceuticals or implants. Parallon’s inventory management systems can manage supplies for all these areas.

In hospitals using the Parallon system for pharmaceuticals, a dispensing machine triggers an alert that replenishment is needed when a nurse removes a medication. A similar process is followed for implants and related components: When a nurse takes an item off the shelf and scans it into the system, its replacement is automatically ordered.

Parallon relies on several different suppliers and platforms to streamline inventory management. For implants, the company uses a proprietary internal requisitioning software called Smart. For medical and surgical supplies, it uses OptiFlex, which interfaces with Smart. For pharmaceuticals and pharmacy supplies, Parallon uses Pyxis, a CareFusion product that also interfaces with Smart. Because all the products work together, the entire system is seamless and easy to use, Hodges says.

The Benefits of Automated Inventory

From the perspective of supply chain leaders, automated inventory tracking systems provide a “truly perpetual inventory,” Hodges says. “Nobody has to count items on a daily basis for requisition purposes.”

Because the systems automatically reorder and replenish items, they eliminate manual touching of products. “At any given time, you know how much inventory value is sitting on your shelves,” Hodges says.

Atiq Rehman, M.D., FACS, director for minimally invasive cardiac surgery at Lourdes Health System, is part of a physician leadership committee making decisions on new technology, weighing products’ clinical evidence and economic feasibility. Lourdes Health System recently transitioned to a new inventory management program that’s more user-friendly and helps chart cost savings.

“It gives visibility to product availability and maps the hospitals’ spend on different product lines,” Rehman says. “It’s a hand-scanner and iPad-based management system that gives us cycle counts per month, and keeps us on pace so we’re never running out of products.”

Automated inventory systems also allow supply chain team members greater visibility to usage trends, which helps them make more strategic decisions about inventory management.

“Clearly, the technology will help you determine what your utilization is, which can help you build an inventory system,” Hodges says. “If you know that you use two of a particular item each day, you realize that you no longer need to keep 20 on the shelf. That helps you avoid tying up dollars in inventory that you don’t need.”

Automated inventory systems can also provide real-time information about needed orders. For instance, HCA’s system includes a mobile app with a tracking dashboard that allows facilities to monitor where their orders are in the shipping and receiving process.

“When a facility places a requisition order with the warehouse, staff there start picking, packing and shipping the order, and the app tells you exactly where the order is in that process at any given time,” Hodges explains.

Sometimes a full order may not be sent if the warehouse is short-stocked on an item. The mobile app keeps supply chain professionals informed with a summary of their order, including the number of items being sent. Rather than being surprised when an incomplete order arrives, the automatic tracking system provides forewarning of a shortage so they can plan for it.

“From a global perspective, these systems allow you to see how much product is in the facility at any given time,” Hodges says. “By having those products in perpetual inventory, you can make the necessary decisions to ensure clinicians will always have the supplies they need, just in time to provide the best care for patients.”