Hospital Inventory Management: Taking Stock at Portsmouth Hospitals NHS Trust

We welcome this post from Jackie Pomroy, head of supply chain at NHS South of England Procurement Services. Jackie explains the measures taken at Portsmouth Hospitals NHS Trust to implement inventory management practices common in the commercial sector, in a healthcare setting.

Inventory management is good practice and core to operations for any company in the commercial sector; subsequently the ability to keep track of products and usage is considered standard practice as a route to save time, money, and improve efficiencies.  At Portsmouth Hospitals NHS Trust, we’ve transferred this approach, recognising that historical methods used to track products has no place in our modern hospital.

Every year, hospitals across the country, including Portsmouth, spend millions of pounds on hundreds of products ranging from low-cost surgical gloves to expensive medical implants; and yet without the ability to control and manage purchases, operational and financial inefficiencies are inevitable.

A growing number of trusts are implementing technology to improve their procurement practices, and we are proud to be one among them, implementing a single inventory management system (in this case Ingenica Solutions) which we are rolling out across the hospital, with the vision to eventually include all departments.

Our concerns with inventory management were initially flagged during an indepth analysis which revealed the limitations of our approach to procurement at that time.  We faced a number of challenges, from lack of product visibility and traceability, to product wastage, a lack of storage space, and processes that were highly dependent on the involvement of clinicians.  Our inventory was a moving target: stock levels fluctuated, product identification was difficult, and storage was spread across the hospital.

Theatre departments are the highest spend areas in a hospital, and this is where our inventory management solution implementation began.  What’s interesting about a project like this is that although it was initiated by the supply chain management team, the implementation process itself engaged everybody, so in this instance theatres, clinical teams, finance, ICT, procurement and supply chain management were all part of the changes.

In healthcare, our Trust is one of the early adopters of an inventory management system. It has provided a building block to manage our supply chain efficiently.  Supply chain knowledge is now embedded in our practices rather than in just a few individuals as it once stood.

Measurable gains far exceed our early predictions, both financially and from a service viewpoint.  In theatres alone cost-savings passed £1.78 million, with consignment stock savings of £350,000.  Wastage has also been reduced, and as well as a £885,000 stock reduction, space savings of £31,000 have been achieved.

In the past, the administration time that clinicians spent managing, placing and approving product orders was substantial; they had more interaction than procurement staff did with suppliers. Now clinical time has been released back to the frontline, which has created a further saving of £108,000 on clinical time.

It wasn’t unusual to find products in cupboards of every office across the theatres department.  Today stock is centrally located in one secure, well organised, well managed stock room, which has also eliminated the supermarket sweep of storerooms that used to occur.

Our decision to improve inventory management highlighted a further area of concern during the research phase as we identified the majority of products were without a unique identifier.  Discovering 13 different types of barcode prompted our adoption of GS1 standards and as a result enabled us to build a rich database of accurate and up-to-date information, which feeds automatically into our inventory management system. This type of technology has enabled our hospital to really move forward with our aim to achieve supply chain excellence.

Our ultimate long- term goal at the start of the implementation was to have the ability to track all products through to point of use, at patient level -- something which few hospitals have accomplished, wjich we have achieved and will be rolling out to all areas.

With the spotlight continuing to focus on NHS spending, our procurement is now in excellent shape, and we’re on track for a hospital-wide view of inventory levels in the future.  Projects like ours prove that the NHS can adopt these systems, largely used in commercial, to achieve better outcomes, not only in terms of financial savings but also patient outcomes.

 

 

 

First Voice

  1. Sam Unkim:

    Just in case anyone, under estimates the time and resource needed, to change from managing stock levels (after the event) to managing inventory (live). Plymouth have been working hard at this for three years now.

    It seems from the above article, they are finally in a position to expand the system (from theatres) out to the rest of the Hospital.

    http://www.supplymanagement.com/news/2012/portsmouth-nhs-trust-saves-ps178-million-with-stock-system

    Some respect is due, from a Non early-adopters (NHS wide) IMHO

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