Blog Post:

Are Cycle Counts Your Only Source of Inventory Confirmation?

Mar 25, 2019

If you are performing cycle counts of your clinical products inventory, congratulations are in order. Cycle counting is the most effective maintenance tool for inventory balance and adherence to Par Level goals.  A proper cycle count Program, if fully implemented and regularly deployed, will help you maintain your materials goals.  However, there is more to it than just cycle counts. Much more!

Cycle counts are designed to research and update products that you know you have (or should have) in stock and track the fluctuations to enhance your purchasing and usage of these known items. You look in places these items are known to be stocked and validate these counts.  How do you find these items if they have been put in the wrong place, either by mistake or intentionally?  If you find them at all, it is usually by dumb luck or accidentally stumbling upon them.  In most cases, when these products go missing, the assumption will be a paperwork error was committed, and you will place an order for more of this same product that is actually somewhere else in your facility.

Another aspect to consider is regular implementation.  What were the factors used to determine the frequency of the counts?  Who has been tasked with performing the counts?  Is this their primary task or just one of many?  Are there  steps in place to validate the performance of the counts?  Remember, if the counts are done in a haphazard way and not according to accepted accounting standards, the validity of the data is open to question.

The second component that cycle counts does not address is the product that you don’t know you have.  Anywhere from 3% to 7% of the inventory in your hospital, (excluding consignment) will not be found in your Inventory Item Master File.  If it is not in your IM, you are not tracking it; you are not regulating its use, and you are not recording this value on your bottom line. 

A full Physical Inventory (PI) in conjunction with a properly planned Cycle Counting Program will insure that you know what you have, where you have it, and are able to record the maximum value for your inventory.  A full wall to wall PI will establish a baseline of your entire inventory product on hand by location, quantity, and dollar value.  This will help you to determine the need and frequency of cycle counting for various classes of product as well as tell you where they are all located.

The PI will also serve as the check on the effectiveness of your Cycle Count Program and allow you to improve and modify with each PI so that you can maximize the benefits and ROI on your Materials Program. 

Consider a mid-year PI as well to eliminate year end surprises.  Measure-Monitor-Adjust 

Contact DSC at [email protected] so we can start discussions on how to help you improve your bottom line.

About Us

Inventory management, no matter what your business, is imperative to success. For hospitals, medical inventory management in the clinical care areas is an elusive and serious concern. Hospitals and Surgical Centers are now, more than ever, trying to get a handle on cost of inventory in all areas including ORs, Cath Labs, PACU, ASU, Anesthesia, IR Labs, Labor & Delivery, SPD, Pharmacies and all other clinical supply areas.

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About Our Services

Data Capture

Physical Data Capture of your Medical Inventory

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Perpetual System Inventory Updating

DSC will perform a real time inventory count of perpetual supply areas while transactions are frozen. Once the counts are audited and verified, they are posted in the system.

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Cycle Count Program

Cycle Counts may be performed on any number of product types such as consignment, perpetual, implants.

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Pharmacy Inventory Services

Custom designed to your specific accounting requirements.

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Laboratory Data Capture & Inventory

We will conduct a physical count of your laboratory supplies using proper Units of Measure based on item master criteria.

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Comparative Analysis

Detailed report showing changes over time so that you can evaluate progress.

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Consigned to Owned Confirmation™ Program

We will schedule meetings with the manufacturer representatives and vendors of the consignment products to collect, review, and update contracts. When completed, DSC will conduct the initial consignment inventory.

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Surgical Tray Audits

Surgical trays are normally included in a standard physical inventory, however, this can be offered as a stand-alone service.

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Pre-Inventory Training

DSC can train your department heads so that all departments are conducting inventory operations consistently and in compliance with corporate directives.

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Special Projects

DSC can provide fully credentialed on-site resources for support of special and/or short-term needs.

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Standardization

Based on observation during an inventory and/or assessment, DSC can help identify which items are counted or not counted at specific locations.

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