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Statistical Approach to Inventory Optimization with Focus on Medical Consumable Items

  • Arti Sharma
  • 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 and movements.
  • 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