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.