# Presentation: 129550

## Inventory Management

## The Lab Quality System

**Information Management**

**The Lab Quality System**

## Learning Objectives

- At the end of this module, you will have a better
- understanding of how to:
- Maintain proper inventory records
- Maintain proper level of inventory
- Use first-in-first-out concept when managing inventory
- Inspect delivery of supplies before acceptance
- Identify lot numbers and expiry dates
- Keep kits and supplies in proper storage

## Content Overview

- What is inventory management?
- Inventory records
- Re-order levels
- Inventory storage
- Inventory delivery

## Inventory Management Means...

**Properly maintaining adequate stocks to ensure uninterrupted service**

## Inventory In A Laboratory Includes:

**Supplies**
**Reagents**
**Forms**

- Inventory (or stock) = the supplies and materials you need for all lab performance

## Inventory Management Leads to High Quality Testing

- Inventory management:
- Ensures availability of materials and kits  when needed
- Avoids the use of expired kits
- Minimizes wasting

## How Do You Manage Inventory?

- You own a small store.  You buy the merchandise from suppliers and sell them for a profit.  To keep a profitable business, you must always have the right items available for customer purchase everyday.
- What must you do to maintain adequate stocks?

## Inventory Management Involves Knowing...

- What and how much stock you have
- When to order fresh supplies
- What and how much has been ordered, when it was ordered
- Where all supplies are stored
- When and how much fresh stock was received, and by whom

## Inventory Management Involves Doing...

- Performing a “stock count”
- Maintaining proper inventory records
- Determining when to re-order
- Determining how much to re-order
- Placing orders properly
- Inspecting delivery of new orders
- Ensuring proper storage of inventory

## Perform a “Stock Count”

| What is it? | Physically counting each item in the inventory |
| --- | --- |
| When is it done? | In the beginning of each month recommended |
| Who does it? | A designated person |

**All stock must be accounted for. Everything that **
**comes in and goes out must be recorded.**

## Maintain Proper Inventory Records

_**Stock Card**_
- Simple, heavyweight cards
- Kept for each item in stock

_**Stock Book or Computer Record **_
- Contains listing of all items in the laboratory
- Update monthly after physical count
- Use information from stock cards

## Stock Card: An Example

- Item Name:  __________ Unit: ___________
- Manufacturer: ________________________
- Minimum Stock (Re-Order Level): ___________

| Date | Received
From | Issued
 to | Quantity
Received | Quantity
Issued | *Balance | Lot #  | Signature |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |

## Stock Book: An Example

| Item Name  | Qty (units) Requested  | Date 
Requested  | Qty 
Received  | Date
Received  | Lot #  | Expiry
 Date  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |

## Determine When to Re-order

**Terminology:**
**Minimum stock** -  Amount of stock required to support testing operations until additional supplies are received
**Lead time** – Time between placing an order and receiving it
**Maximum usage** – number of test devices used in a given time period

- Re-order when inventory reaches minimum stock level

## Calculating Minimum Stock Level

- 		Maximum lead time = 2 weeks
- 		Maximum usage/wk = 3 kits
- 		Minimum stock level =  2 x 3 = 6 kits** **
- When only 6 kits are left, place an order

## Exercise:Calculating Minimum Stock Level

- On average, you use 2 BHCG  kits a week.
- It normally takes 2 weeks to receive the order you placed.
- You should order more BHCG kits when you have ____ kits left in the inventory.

## Determine How Much to Re-order

- Never order more than your storage space can hold
- Never order more supplies than you can use before they are expired
- Consider maximum usage plus minimum stock level
- Consider shipping costs when placing orders

- Establish proper full stock level.  Re-order to reach that level.

## Determine Proper Full Stock Level: An Example

**Maintain an inventory that covers a month’s **
**maximum usage plus minimum stock level**

**Maximum lead time = 2 weeks**
**Maximum usage/wk = 3 kits **
**Minimum stock level =  2 x 3 = 6 kits **
**When only 6 kits are left, place an order.**

**Usage/Month = 3 kits/wk x 4 wks = 12 kits**
**Minimum stock level = 6 kits**
**Proper inventory level = 12+6 = 18**
**You must always have 18 kits in the inventory in the beginning of each month. **

## Exercise: Minimum Stock Level and Proper Full Stock Level

- On average, you use 1 box of gloves each week (or 4 boxes a month).
- It takes 3 weeks to receive the order you placed.

- Determine:
- What is the minimum stock level?
- How many boxes should be in the inventory in the beginning of each month?

## Place Orders Properly 

- An ordering system must be in place
- Follow ordering protocol
- Ensure relevant ordering (requisition) forms are on site

## Inspect Delivery of New Orders 

- Upon receipt:
- verify contents of order received with requisition
- Check integrity of received supplies
- Date each item
- Note expiration date
- Store new shipment behind existing shipment
- Create or update records

## Examine Lot Number & Expiry Date

## Ensure Proper Storage of Inventory

- Keep in a clean, organized, and locked storeroom
- Store according to manufacturer’s instructions
- Place in well ventilated room
- Store away from direct sunlight

- Place items on shelves
- New shipments placed behind existing items

**First in, first out**

## Summary

- What does inventory management mean?
- What information is recorded in inventory record-keeping?
- How do you determine minimum stock level?
- How do you determine proper full inventory level?
- What does “First In First Out” mean?
- What procedure should you follow when receiving new kits and supplies?
- How should kits and supplies be stored?

## Key Messages

- Maintain an adequate inventory at all time to ensure uninterrupted service.
- Don’t let any item run out before re-order.
- Never order more than your storage space can hold. Never order more supplies than you can use before they are expired.
- All items in the inventory must be accounted for and recorded.
- Always inspect new shipment before accepting.