Waste reduction is a key element of many healthcare efficiency initiatives, but what exactly does it involve?
In many hospitals, materials management plays a central role in tackling waste. Medical inventory often goes to waste due to unused, misplaced, stolen, or expired supplies. That’s why hospitals are focusing on gaining greater visibility and control over their inventory to reduce unnecessary costs and improve patient care.
Let’s explore the main hospital materials management strategies that healthcare facilities are using to cut waste and boost operational efficiency.
Inventory Tracking & Expiration Management
Managing High-Value Medical Devices and Implants
Many medical devices and especially implants are considered high-cost items, so mismanagement can dramatically increase wastage costs, making it a priority that hospitals need to get right. Each wasted item carries a double financial burden: the direct cost of the lost product plus the cost of replacement.
A successful approach is to achieve real-time, item-level, end-to-end tracking of inventory using automated hospital materials management systems. Solutions like TotalSense UHF RFID smart cabinets and mobile hand scanners help prevent misplacement and overstocking, ultimately lowering purchasing costs and waste.
Expiration Date Management: FIFO in Hospital Materials Management
Hospitals throw away an estimated $765 billion of usable medical supplies each year. Modern hospital materials management systems increasingly incorporate tools to support First-In-First-Out (FIFO) usage, ensuring items closest to their expiration are used first.
Having digital oversight helps prevent items from expiring on the shelf, a major contributor to medical waste.
Purchasing & Stock Optimization Strategies
Using Just-in-Time (JIT) Inventory Management
The Just-in-Time (JIT) model helps hospitals reduce on-site stock levels by ordering supplies only when needed, minimizing waste from expired or damaged items. However, this approach can be risky, making hospitals more vulnerable to supply chain disruptions. That’s why this model is most effective when limited to specific product categories and managed carefully.
By leveraging automated material management systems with built-in predictive analytics, hospitals can better forecast demand, maintain optimal safety stock, and make smarter, data-driven purchasing decisions – ultimately reducing waste without increasing supply chain risk.
Boosting Standardization to Reduce Inventory Waste
A lack of product standardization can lead to overstocking, obsolete items, and high expiry waste. There are a few reasons why this happens. For example, hospitals sometimes use multiple suppliers for the same or similar products to boost supply chain resilience. Still, there’s a need to balance the benefits of resilience against the cost savings that come from concentrating purchasing with fewer vendors whenever possible.
Hospital materials management strategies also aim to reduce variation driven by physician preference. By standardizing products, hospitals simplify purchasing, reduce complexity, and lower both waste and costs. Access to real-time data on stock levels and usage patterns further supports these standardization efforts, making it easier for hospitals to make informed supply chain decisions.
Value Analysis: Smart Purchasing Decisions
Value analysis is widely used as a stand-alone initiative or as part of broader value-based care programs. The process involves multi-disciplinary committees that review and recommend products based on safety, performance, and cost. This approach supports standardization and ensures procurement focuses on best-value items that are competitively priced and deliver optimal patient outcomes.
Hospital materials management solutions that capture accurate usage data help make these decisions more data-driven and effective.
Consignment and Bill-Only Models in Hospital Materials Management
Alternative purchasing models, like consignment and bill-only, help shift inventory risk from hospitals to suppliers. For consignment items, the supplier retains ownership of the product until it is actually used. Bill-only items are delivered directly to the operating room, and the hospital only pays for consumed items. These approaches rely on dependable point-of-use systems to automatically track and document product usage.
In both models, the vendor retains full responsibility for products until the point of consumption, so any pre-usage wastage is the responsibility of the vendor, not the provider. Sharing real-time inventory data between hospitals and vendors is essential to make these models work effectively, helping reduce disputes and further minimize waste.
Operational Efficiency & Process Improvements
Managing Bulk Medical Supplies Efficiently
Bulk supplies often get overlooked but contribute significantly to waste. Automated Kanban and PAR systems improve hospital materials management by aligning purchasing with actual demand, resulting in reduced expiration and overstock waste.
Accounting for Labor Costs in Hospital Materials Management
Beyond physical product waste, hospitals can lose significant resources through inefficient inventory processes. Wasted labor costs occur when nurses and logistics staff spend time manually updating stock counts or locating supplies, taking time away from patient care.
AORN recommends automating these tasks to help reduce human error, lower HR costs, and boost staff satisfaction by allowing clinical staff to focus more on patient care.
Improving Hospital Materials Management with Technology
All these strategies can be strengthened with a single step: adopting automated hospital materials management systems. IDENTI’s AI-powered solutions and comprehensive platform can be custom-designed to track high-value items at the inventory level, digitally manage bulk supplies, and boost point-of-use consumption tracking.
By leveraging smart hardware and advanced AI software, hospitals can effectively cut inventory waste, reduce costs, and enhance care delivery.
Contact us to learn how IDENTI’s solutions can support your hospital’s material management strategy and help reduce waste.
