# Presentation: 047932

## Procurement and Inventory

## Importance of  Inventory Control

- Ensures lab efficiency and cost effectiveness
- Prevents costly, disruptive, and/or wasteful steps in patient care
- Builds critical relationships between laboratories, hospitals, suppliers and the Ministry

- Uninterrupted availability of reagents and supplies:

**Notes:**
Lack of reagents or supplies is costly, disruptive, wasteful, and might extend hospital stays, postpone surgery, interfere with patient care, add risk to the public health.

## Inventory Control Challenges

- In many countries purchasing supplies is the responsibility of Central Medical Stores (CMS)
- Laboratory has little or no control over quality and specifications of supplies
- Supplies may be purchased and distributed by different programs (e.g. TB, HIV) leading to different systems

## Inventory ControlChallenges – HIV Rapid Tests

- Problems affecting availability
- Manufacturer cannot keep up with demand (example: Unigold test)
- Temporary quality problems (Hemastrip)
- Test is renamed or changed (Hemastrip, Sure Check)
- Supply problems require countries to develop flexible test algorithms with available substitute tests

## Inventory Control System 

- Supply Analysis and Identification

- Laboratory test lists
- Item identification
- Product demographics

## Inventory Control System

- General
- Optimal frequency
- Specific operating procedures

- Monitoring Inventory

## Inventory Control System Outline

- Usage
- Handling/Storage
- Inventory recording

- Controlling Inventory

## Inventory Control Definitions

- Addresses when to order and the quantity to order
- Based on usage, delivery time, quantity, packaging, available storage space, and similar factors
- Any change to orders, shipping dates, or pricing should be clarified between the laboratory and the vendor before the order is placed.

- Supply Requisitioning

**Notes:**
Examples of inventory records - These may include but are not limited to traveling purchase requisitions, periodic count records,  perpetual inventory records, and specialized inventory records. 

 Because supply requisitioning is one of the most sensitive parts of the inventory management process, training and good judgment are required. To ensure that there is a mutual understanding of expectations, 

## Inventory Control Definitions

- Official record sent to the supplier to authorize shipping and billing.
- Any change to orders, shipping dates, or pricing should be clarified between the laboratory and the vendor before the order is placed.

- Purchase Orders

## Inventory Control Definition

- Order with a vendor to deliver a specific quantity at stated intervals.  Changes in usage may increase or decrease needs, inventory.
- Review periodically (e.g., every 3 months) to keep standing order quantity in balance with needs.
- Give notice to the vendor when a standing order is changed.

- Standing Order (Ordinary)

## Inventory Control Definition

- Time needed to analyze requirements and to create and release a purchase order or supply requisition

- Order Preparation Lead Time

## Inventory Planning

- Lab Section Lists
- Basic analysis
- Demographic info
- Item Identification
- Department forms
- Monitoring
- Product Demographics
- Product listing
- Minimum info

- Supply Analysis & ID

## Inventory Analysis

- Complete description of the item
- Unit of count
- Approximate (average) usage per month
- Priority level:
- Order lead time/delivery time
- Storage space and conditions of storage

- Basic analysis of items used:

**Notes:**
For (3) (variances may be useful);
Priority level (4) high, medium, low;
high, medium, low;
Comment (example) such as supplier catalog number 

## Inventory Monitoring 

- Assign responsibility
- Inventory in each of the storage areas
- Conduct weekly physical count

**Notes:**
Storage areas - (i.e., hospital storeroom, laboratory storeroom, section storage areas, and special storage areas for flammable supplies or refrigerated supplies).

## Inventory Controlling

- Ideal: product arrives as you run the last test
- Increase lab efficiency and effectiveness via uninterrupted flow of needed materials
- Reduce both quantity of inventory and the physical space

## Inventory Usage 

- Minimum Inventory Level
- Amounts necessary to support normal operations until additional material can be supplied
- Safety Stock
- Minimum to support emergency order
- Consider the product's importance in laboratory operation
- Lead-time
- Total time between placing order and receipt
- Include within-institution processing

- Levels

**Notes:**
Until additional materials can be supplied from from a vendor, isolated storeroom, general storeroom.

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## Slide 19

## DiscussionProcurement and Inventory