To understand the importance of a book on consignment inventory system for hospitals, first, you need to know why managing it is so crucial. Inventory management is important in all types of industries or businesses.
But, when it comes to healthcare sectors, you can never deliver timely care & healthcare services without an inventory management system.
In hospitals, the consignment inventory management works differently. So, a book on this lets you track the process with real-time updates and helps your employees adapt to the new system of working. Let’s understand how it works & why it will prove to be beneficial for your healthcare organizations.
What is The Consignment Inventory System for Hospitals?
The hospital inventories include the medical equipment & devices required for delivering optimal healthcare services to patients. However, stocking up on not-so-important items might lead to high-cost investment, expired items, lack of availability of the required items, & product wastage.
It is difficult for healthcare employees to track inventory usage all the time or have an eye on the individual expiration date of items. Because they remain busy providing patients with the most needed treatments & care.
To make tasks easier, hospitals rely on a consignment inventory system. In this case, suppliers are the owners of the medical inventory, They let the hospitals stock these items & payment is done only after their usage or consumption.
For example, if you want to borrow 1000 units of inventory items for your hospital, first you have to sign a deal with a particular supplier. So, they will initially own those 1000 units unless you use them. Once you use them, you need to pay for those & the remaining items will be under the ownership of the vendor.
Here is a table for your reference.
Month | Consignment units | Usage | Vendor owns |
1 | 1000 | 0 | 1000 |
2 | 900 | 100 | 900 |
3 | 700 | 200 | 700 |
4 | 550 | 150 | 550 |
5 | 350 | 200 | 350 |
6 | 250 | 100 | 250 |
7 | 0 | 250 | 0 |
So, let’s discuss the types of hospital inventory items.
Inventory Items & The Types
- Base Items include ECG machines, patient monitors, patient trolleys, hospital beds, anesthesia machines, infusion pumps, etc.
- Work In Progress items such as scalpel, medical supplies, gloves, etc.
- The Completely Used inventory items such as syringes, needles, intravenous cannulas, surgical dressings, diagnostic test kits, etc.
- MRO items such as safety equipment, janitorial supplies, lubricants, adhesives, light bulbs, Personal Protective Equipment, etc.
The Benefits of Consignment Inventory System for Hospitals
The system can drastically improve your healthcare organization’s services & cost management. If integrated properly, you can focus more on delivering better healthcare services because the inventory system can take care of the rest.
Cost Reduction
Since you do not need to pay your suppliers for the massive amount of inventory items in one go, you can utilize your resources to ensure better healthcare & service to patients.
Easier Tracking
The suppliers will monitor the expiration dates of your inventory items & they will either remove them or replace them on time. So, you can get all your essentials right on time without worrying about their effectiveness.
Lower Freight Damage
Since the vendors will deliver all your essentials to your hospitals, it is their responsibility to ship them in good condition. You will not be liable for any damage during transportation.
Zero Holding Cost
In case something goes wrong in your inventory, either a leakage or product damage, the vendors will instantly make a replacement.
Reduced Wastage
Overstocking or understocking is never a problem with consignment inventory management. Since the suppliers will stock your essentials in the right amounts, neither you need to pay more nor you will miss the opportunity to serve your patients.
Automated Tracking & Updates
The integration of inventory management software can provide you will real-time updates about inventory usage. So, the suppliers can easily restock those items that are in high demand.
How to Make The Most of A Consignment Inventory Management System?
To get the most out of this system, you need to take care of a few things. Let me explain them.
Reliable Suppliers
Since you are going to sign a deal with a supplier for your inventory management, it is important to find a reliable one. They will be in charge of crucial healthcare items & that is why, it is necessary to ensure that you get all your supply essentials on time & in good condition.
The Healthcare Supply Chain
Try to maintain good relationships with the suppliers & the middlemen. Remember, without strong & reliable supply chain management, it is impossible to run a healthcare organization.
Proper Training
Training your employees to use this system is necessary. Once they get accustomed to this new inventory management system, they can definitely make the most out of it. This way, they can effectively manage daily reporting to ensure product availability.
Now comes the biggest question!
Is the consignment inventory system the ultimate solution for hospitals?
Well, partially yes.
Because it depends upon a lot of factors such as software integration, database management, reliable supply chains, & of course, adaptability.
So, is there any challenge of integrating this system?
Let’s discuss this.
2 Challenges of The Consignment Inventory System
Dependence on Suppliers
To pile up your hospital essentials, you need to rely on the suppliers only. Whether you will get the right things at the right time will depend upon the suppliers’ competency.
Data Privacy
Since you need to track your inventory items & their usages through software integration, there is a chance that your confidential data might get exposed.
A Book on Consignment Inventory System for Hospitals: The Ultimate Revolution
The consignment inventory system is a master solution for reduced expenditure on inventory items. “It has reduced 30% of my total expenditure reserved for hospital essentials & supplies”, says a renowned hospital owner.
With this, not only you can track the usage in a better way, but also, it can also reduce product damage, additional costs, shipping charges, & liabilities associated with poor-quality supplies.
So, a book on consignment inventory system for hospitals can be a great addition to managing your workflow & inventory through proper training & knowledge about practical applications.
Frequently Asked Questions
Q1. What are the future scopes for the consignment inventory system for hospitals?
Ans: In the future, you can expect AI or IoT device integration along with blockchain technology for automated system updates, seamless software integration & system management.
Q2. Do supply chain vendors face any challenges in the consignment inventory system?
Ans: Items that are not used that often might pose challenges for the vendors since they need to place their inventory at the hospital premises. Also, it leads to inconstant cash flow since the hospital authority will pay only if they use the inventory items.
Q3. How can a book on consignment inventory system for hospitals help you track your inventory?
Ans: The book is not only important for making your healthcare employees aware of the new management system. Rather, you can use it to calculate your inventory products. First, make a listing of the products placed by the vendor. Once you use any of them, mark it & update the supply chain about it.