Inventory Control
Abstract
Inventory management is a vital process in a hospital, clinic, or rehab environment. Inventory management has improved over the years with the use of advanced technological and innovative resources that help doctors, practitioners and others. Effective inventory management allows organizations to manage their orders, inventory, and costs in a better way and thus, improves their asset management and control. Inventory management system installed by organizations help them to perform different processes and link them to their suppliers’ systems so that it can improve real time processing of orders and inventory management. There are different functions of inventory management including decoupling function, storing resources, managing irregular supply and demand, discounts, and addressing out of stock conditions. These functions are necessary to perform in order to avoid any delays and obstruction in organizational working. In all of these functions, effective inventory management can help organizations avoid situations that could poorly affect their performance and delivery of healthcare services.
Inventory Control Method in Hospitals and Rehabilitation Centers
One of the most significant advantages a hospital, clinic, or rehab environment can possess is its ability to develop its inventory management system through advances in technological and innovative resources. Most recently, doctors and health care practitioners have been tremendously assisted by the use of specialized inventory control methods. In such establishments, RFID (Radio-frequency identification) is being used as a solution for effective inventory management control. It also informs inventory control specialists when to make large orders, manage ordering trends, and reduce costs. Diagnostic tests are a common practice in the health care field and such tests require a full and comprehensive approach to strategic and intuitive inventory control practices (Mercado, 2007).
For the purposes of this work, its scope will range from broad retail inventory control practices to a case data study on three 50 bed inpatient specialized facilities that require patient-specific inventory.
Business Inventory Control
The inventory control system is one of the most practical and significant systems that has the directive to accurately manage resources of a company. The system is tasked with purchasing, receiving, tracking, shipping, reordering and warehousing of the company’s assets (Mercado, 2007).
Uses of inventory control systems
The primary aim of the inventory control system is to ensure that the storage location has enough inventory assets to cope with current customer needs to avoid loss of oversupply to the company (Saxena, 2003). The five major uses of the inventory control system include decoupling functions, storing resources, irregular supply and demand, quantity discounts, and avoiding out of stocks and shortages.
Decoupling Function
Decoupling function is a way of setting some stock on the side when there is a slowdown in the production. The decoupling process is the most important process in the inventory control system that helps the company to manufacture different products separately. The function of decoupling is beneficial because it reduces the chances of inefficiency and subsequently avoid stoppage of the entire manufacturing process (Render, 2009).
Storing Resources
Storing resources is a significant role in the inventory control system that helps the company to store products that are produced or harvested during a particular season of the year. Examples of such products include agricultural products or seafood. However, the demand of these types of products remains constant for the entire year. In such cases, storing resources enables the company to store bulk quantity of the products to meet the demand of the consumers without delay (Render, 2009).
Irregular Supply and Demand
Refers to inventory whose demand is not constant over the entire year. The irregular supply and demand sometimes results in ineffective service. Therefore, the company must use inventory management to store the large quantity of such products to meet the irregular demand of customers (Render, 2009).
Quantity Discounts
Refers to the beneficial inventory for a company to avail the opportunity of discounts on purchasing bulk quantity products. For example, purchasing a particular product might cost $8 per unit but if the company orders to buy 300 units for the same unit it might reduce the cost to $6.75. As a result, the use of inventory helps the company to reduce the cost of each product (Render, 2009).
Avoiding Out of Stocks and Shortages
The most significant use of inventory control is the ability to avoid lack of product. The absence of inventory may dissatisfy the customer, loss of sales, and can also ultimately result in total company failure (Render, 2009). This is particularly true in the retail industry where large available assortments attract loyal customer foot traffic hinging on the establishment living and dying by sheer volume of their products.
References
Mercado, E.C. (2007). Hands-on Inventory Management. Boca Raton: CRC Press.
Render. (2009). Quantitative Analysis for Management. 10/E (With Cd). New York City: Pearson Education India.
Saxena, J.P. (2003). Warehouse Management and Inventory Control. New Delhi: Vikas Publishing House Pvt Ltd.
