Consumption Best Practices

Tracking consumption unlocks vital information for your organization, helping to:

🗸 Maintain perpetual inventory

🗸 Reduce on-hand inventory with better visibility to what’s om your shelves, what’s on order and what’s been consumed

Note: Overstocked inventory is equal to leaving cash on your storeroom shelves – you’ve not only over-spent, but you’ll experience a higher percentage of waste through product expiration and loss.

🗸 Gain visibility to data such as lot, serial number, and expiration dates

Step 1: Get a quick start on spend management by targeting high dollar items

🗸 Use the 80/20 rule to prioritize – it’s likely 80% of your costs come from 20% of the products you buy

🗸 Make it a priority to manage high dollar items more closely, and in turn, you’ll gain visibility to a high percentage of your supply spend

Step 2: Next, increase visibility to overall item consumption throughout your organization

🗸 Scan items as they are pulled from inventory and distributed to supply areas

🗸 Keep item tracking quick and simple for clinicians

– Identify and implement a system that easily records supplies scanned and tracks for replenishment

NOTE: Items pulled for preference cards should be scanned at the end of the case to track consumption accurately.

Step 3: Implement auto-purchase orders to save staff time and ensure accurate inventory levels

🗸 Usage tracking provides better consumption data over time, helping to set or correct par levels

🗸 Once you’re armed with accurate data, you can set up auto-order purchase orders and maintain the inventory you need – without over-ordering or overstocking

Step 4: Secure your storerooms – in an unsecured storeroom or inventory area, items will be removed without being scanned or recorded

🗸 Wherever possible – in each storeroom or area – implement a scanning process to track items as they’re being consumed

– While good scanning technology makes item scanning fast and efficient, it can be difficult for nurses and clinicians to scan individual items due to the type and volume of patient care being delivered

– In an area with low cost, high velocity items, consider a two-bin system which supports a grab and go environment, eliminating the need for individual item scanning

Step 5: Tracking consumption helps improve system performance and profitability

 

🗸 Your organization will benefit from understanding costs, margins and profitability of services lines or departments

– Tracking consumption data increases your ability to perform various analytics, such as costs by physician, patient or day

NOTE: If your organization receives items in as assets, you’ll need to recognize them as expense items as they’re consumed. Consumption tracking helps support this process.

🗸 Drive accuracy in patient billing and increase revenue

– Tracking supply use helps identify billable items, which in turn helps increase billing accuracy and ensure all billable items are reflected on patient bills

🗸 Make sure you’re fully utilizing reporting tools

– Consumption data that creates visibility at the organization, department, physician or service line level can help improve budgeting, forecasting and planning

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