Statistical Approach to Inventory Optimization with Focus on Medical Consumable Items
Agency : Inventory Control; Medical Consumable Items; Inventory Management
Objective : This project study is aimed to introducing an improved system of inventory
control of medical consumable items
used in Healthcare Industry
(Hospital). To analyze the efficiency
of Inventory Management as well as to classify
the various components based on its value
Background : Cores of rupee are being spent every year for the purchase of around thousands of
varieties of medical consumable items. As there is no formal inventory system in existence, it happens that high value slow moving items are stocked in larger quantity whereas fast moving less value items
are stocked out.
Methodology : The research
design used in this project
is analytical in nature. The data are collected
from the annual reports maintained by the company and from the TP-Pospro Plus Software.
ABC Analysis, FSN Analysis, HMLAnalysis were used as study tools.
Findings : On the basis of unit cost involved,
the various items were classified into ABC
categories. Category A needs the most rigorous control, C requires minimum
attention and B deserves less attention than a but more than C. According to data analyzed by FSN analysis
techniques there are no non-moving items found and the company maintains low percentage in moving items,
which is not a good result. It was also found that there was no
selective control techniques like economic ordering quantity, reorder
level etc. are available to monitor
individually very often & to avoid stock outs. This is very laborious and cumbersome. Also this consumes
valuable time of higher officials.
Recommendations : Under ABC analysis, the management must have
more control on A than
B&C, because A class constitutes more (70%) of higher
values. There should
be tight control
exercised on stock
levels, to avoid deterioration. The company must not go to the Non-moving items as far as possible, because there
will be unnecessary blocking of working capital.
This would hinder the other activities of the
organization. The company is required
to maintain safety stock for its components in order to avoid stock-out
conditions & help in continuous production flow. Items should be placed into the store based on their
To analyze the efficiency of Inventory Management as well as to classify the various components based on its value and movements