Student Dissertation

Agency : Inventory Management, ABC Analysis, VED Analysis, ABC-VED Matrix

Background : inventory or stock is defined as the stored accumulation of material resources in a transformation system. The planning and controlling of these inventories is also known as inventory management. It is an important concern for all types of businesses as effective inventory is essential for realizing the full potential of a supply chain. Now a day, organizations are more concerned with stock control because a lot of funds are invested in stock and most organizations carry out inventory control through stock taking, surprise checks and other methods, but there is always a variance between the actual result and the record kept by these organizations, thus exposing them to related costs that affect performance and service delivery. Objective: to identify the factors affecting inventory management performance in central store of Sterling Hospital and to analyses the consumption trend for determining the rank of items that include drugs on basis of their consumption

Methodology : the study was retrospective study. The location of the study was the central store of Sterling Hospital. Total drugs that included all injectables, tablets, capsules and medicinal types were taken as sample over the period of five months (September 2015-january 2016). Data was collected through HMIS, records review and staffs of the department. Various tools were used to do the analysis like ABC analysis, VED analysis, ABC-VED matrix and MS Excel.

Findings : As per ABC analysis the findings that emerged showed that out of 1447 items only 91 items amount for 70% of the total expenditure. Than VED analysis was done by a panel of five doctors and they categorized drugs on the basis of its criticality it was found that out of 1447 items 426 i.e. only 29% were vital drugs, 876 i.e. 60% were essential drugs and 145 i.e. 10% were desirable drugs. Later ABC-VED matrix analysis was done to get the list of Class I drugs and it came out to be 483 i.e. 33%, Class drugs came out to be 835 i.e. 58% and Class III drugs came out to be 129 i.e. 9%. The general findings of the project were many like no inventory management tools (ABC, VED) were used to do regular monitoring of the inventory, no proper scheduling for the indent order and delivery. Turnaround time of drug delivery to IPD was more than the standard protocols.

Recommendations : the recommendation for the analysis were strict control and regular check required for Class I items by top level management personals, stock should be reviewed according to ABC-VED matrix analysis, proper scheduling should be maintained for the indent order and indent delivery, turnaround time of medication delivery should be reduced for emergency and new indents.


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