Student Dissertation

Agency : Inventory Management; Hospital Store Management; safety stock level

Objective : minimize stock outs. Objectives: 1) To analyse the stock movements in stores. 2) To analyse the consumption trend for determining the rank of items on the basis of their consumption. 3) To establish safety stock level, lead time, reorder level.

Background : About one-third of the annual hospital budget is spent on buying materials and supplies, including medicines. The goal of the hospital supply system is to ensure that there is adequate stock of the required items so that an uninterrupted supply of all essential items is maintained. ABC analysis is a method of classifying items or activities according to their relative importance. It is also known as “separating the vital few from the trivial many” because, for any group of things that contribute to a common effect, a relatively few contributors account for a majority of the effects. VED analysis is based on critical values of the item. Based on their criticality, the items could be classified into three categories: vital, essential and desirable. There could be serious functional dislocation of patient care services in hospital when vital drugs are not available even for a short period. If essential items are not available beyond a few days, the functioning of the hospital can be adversely affected. The shortage of desirable items would not adversely affect patient care or hospital functioning even if shortage is prolonged. A combination of ABC and VED analysis (ABC-VED matrix) can be gainfully employed to evolve a meaningful control over the material supplies. Category I includes all vital and expensive items (AV, BV, CV, AE, AD). Category II includes the remaining items of the E and B groups (BE, CE, BD). Category III includes the desirable and cheaper group of items (CD).

Findings : Only 1.2 % item belongs to A-V category and class-1(A-V, B-V, A-E) category accounts for 8.73% of total medical consumables. While class-2 (C-V, B-E, A-D) category accounts for 29.31% of total medical consumables. Rest of the items belongs to class-3.

Recommendations : Materials department is responsible for supply o right amount of item to patients on right time, failing to this can be lethal for patient and hamper hospitals image. Materials department is also responsible to maintain adequate amount of inventory to minimize cost and increase efficiency of available space. to maintain adequate inventory at minimum cost inventory should be categorized. For class-1items, orders should be placed frequently and lead time should be as less as possible, to keep inventory level low and prevent stock out. For class-2 items, sufficient stock should be maintained; orders are to be placed less frequently. Safety stock must be maintained in order to avoid stock out condition and help in continuous production flow.


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