Archive September 2002 III, No. 9

7 Tips for More Effective Inventory Management

Readers share their best ideas on ordering, tracking, organizing and secureing supplies.

Judith Lee


If your surgery center is like most, you spend about 20 percent of revenue on supplies. We asked experienced facility managers how they make sure they have what they need and still mind the bottom line.

1. Make suppliers compete.
Jerrie Smith, administrator of the Cypress Orthopedic Center in Houston, streamlined and economized on supplies by starting a bidding war between three supply companies. The prize was significant, as the ASC spends up to $250,000 a month on supplies. Each rep was aware of what the others were charging and had an opportunity to underbid his competitors. Additionally, Ms. Smith asked the reps what other services they could offer.Now, the center deals primarily with one company, although to keep that company honest, Ms. Smith still orders specialty items from a secondary source. The primary company will often go the extra mile to locate items that it doesn't carry. Managing supplies is no longer a full-time job - one staff person can oversee tasks such as pulling cases and handling special orders in four to eight hours a week.

2. Make one person accountable.
Catherine Sayers, vice president of operations for Pinnacle Orthopedic Centers in Ft. Collins, Colo., suggests appointing a single point-person to handle supplies, including managing what inventory is ordered, what is backordered and what you absolutely need by what date. "One person can monitor supply levels and make sure you don't have an excess of supplies sitting on the shelf," she says. Your supply manager can also develop a relationship with supply reps. "One person in charge definitely gets more respect from the supply reps than a faceless supply-by-committee. The reps find out they have to work through this one person, who knows what is really needed," says Pam Brock, administrator of Orthopedic Center of the Rockies in Colorado.

3. Reorganize items by use.
When organizing supplies, Jan Smith, RN, nurse coordinator for the Little Rock Surgery Center in Little Rock, Ark., advises thinking in terms of creating the most user-friendly arrangement for a brand new staff member to quickly find everything she needs. An easy way to do this is to simply store together items that are used together. For instance, store cautery handpieces, their changeable tips and ground pads in the same place.

4. Guard against theft.
Keeping supplies secure is just as important as keeping them accessible. "Disappearing supplies is a problem that haunts all surgery centers," says Jerrie Smith.Take, for example, the case of the surgeons who were pocketing sutures to use for in-office surgery. The cure: Move the suture carts out into the hallway where everyone could see them.However, items that might interest patients and their families are best secured out of sight. "You don't want supplies in an accessible location where families can walk off with them," notes Ms. Sayers.Keeping tight controls on supply levels may discourage staff members from helping themselves, but managers admit this problem is not entirely curable. "Right now we have a very good group of staff members. That is the only thing that really seems to help, says Jerrie Smith."

5. Make a list, check it twice.
Even if you use computer software for inventory management, nothing replaces keeping an old-fashioned shopping list as a means of day-to-day tracking. At Wills Eye Surgery Center in Wilmington, Del., the facility keeps a running list right in its supply room. As the nursing staff picks cases, they note the items that are getting low. The nurse manager checks the list often and places orders accordingly. She notes the order date and expected delivery date right on the list. "This system lets the nurse manager know what we need and informs the staff when supplies are expected," says Annette Yetter, Wills Eye's administrator Additionally, Ms. Sayers recommends that your supply "czar" pulls the packing slips when supplies come in and checks the slips against invoices. "This ensures you don't pay for things you don't get, and that you pay the right prices for things you do get," she notes.Direct observation and list-keeping by your staff helps detect supply management glitches that computers can't reveal. Compare the "shopping list" inventory to the inventory levels shown in your computer database. This way, you can recognize and correct any discrepancies between expected and actual supplies.Two quick ways computer software can help: Delete items as they are used, on a case-by-case basis, and do price checks to make sure the correct prices are charged to cases for the items used.

6. Implement just-in-time ordering.
Facility managers recommend just-in-time ordering so that you don't sink a lot of money into supplies that just sit on the shelf.Ms. Yetter says her nurse manager reviews supply needs weekly, but plans two weeks ahead. An exception to this rule is a perishable item such as viscoelastic. The eye-only facility orders the item every week and keeps it in the refrigerator.There is a danger of being caught short with just-in-time ordering. To avoid this, managers must establish an exact "par level" for each item, so they know exactly how many items to order and when.Par levels vary from one facility to another, even those in the same specialty. To determine par level inventory, look at the number and type of procedures, physician preferences and actual usage. When you spot leftovers, the par is too high and ordering less can save money. Although maintaining the par level is important, it shouldn't rule supply ordering. Says Ms. Sayers, "If a special item or extras are needed, just go ahead and order it. You can't always go by a set amount."

7. Hold a yard sale.
When the orthopedic surgeons at Little Rock Surgery Center opened their own surgery center, the facility was stuck with a lot of obsolete equipment. Jan Smith turned a minus into a plus by making a list of her unnecessary instruments and supplies and holding an electronic yard sale. Many of the buyers were other facilities in her large HealthSouth network. If you're not part of a large healthcare network, you may still be able to conduct a similar sale by doing online searches for the hospitals or surgery centers in your region. Additionally, you can contact organizations such as the Federated Ambulatory Surgery Association (FASA) or the American Association of Ambulatory Surgery Centers (AAASC) to obtain contact names at other facilities that may need what you're selling.

Be flexible
Ms. Sayers stresses the need for supply managers to be flexible rather than dogmatic in their approach to ordering and maintaining supplies. It is impossible to have a 100 percent accurate gauge of your supply needs every single day in every single case. Sometimes you just have to use your best judgment and adjust on the fly.

Contact Judith Lee at

New to Outpatient Surgery Magazine?
Sign-up to continue reading this article.
Register Now
Have an account? Please log in:
Email Address:
  Remember my login on this computer

advertiser banner

Other Articles That May Interest You

Success With Prefilled Syringes

Before you order medications from a compounding pharmacy, check out this practical advice.

Avoid Compounding in the OR

Start small to stop drug preparations that can lead to errors and sterility issues.

Thinking of Buying Surgical Gloves

Find the fit, feel and level of protection your surgeons and staff desire.