The people, process, technology framework of modern inventory management

Now in a post-COVID world, one question that's top of mind for cardiologists is how to do more with less. How can we be more streamlined in our processes? How can we improve care quality while maintaining sound operations, especially in areas as fragile—yet essential—as the supply chain? 

Inefficient inventory management impacts patient safety, of course, but has less obvious consequences. Having to continually scramble for inventory puts tremendous stress on staff. Furthermore, it introduces the possibility of inventory loss, excess of obsolete or expired supplies, not capturing all charges, inaccurate data—in short, revenue falling through the cracks. At the same time, the cost of storage and supplies is higher than ever. 

According to Linda Matthews, CVIT Business Manager at GE Healthcare, the way forward is to think of your inventory management program as a balance of people, processes, and technology. We sat down with Matthews to understand what this means as she shared how one hospital's interventional department successfully implemented this holistic approach. Read on for key takeaways and watch a recording of the conversation. 

A Holistic, Human-Centered Approach to Inventory Management 

The first step to streamlining your inventory is a mindset shift: recognizing that all three facets come together as parts of a successful inventory program. The people/process/technology framework isn't new, but it's an important foundation for change, Matthews noted, as is being clear on exactly what the organization wants to change. 

"The very first thing to do is to sit back and say, let's look at what our needs are today. What am I looking to improve on?" Matthews said. "Often one of the hardest things for people is to realize: do I have enough of the right data to even know what I want to improve on?" 

For cardiology department leaders, this might mean being honest with yourself and gathering more data where decisions need backing up. The good news is, especially in larger organizations, data is everywhere—streaming from the various places you're doing procedures across the entire hospital network. Enterprises have the opportunity to leverage their size and number of cases to gather data on a large scale. This is where your people come in. 

"Evaluate what you do today and how you do it," Matthews said. "First, gather everybody—it does take a village. Talk to everybody who touches the process end to end. These folks are doing this stuff day to day, they know what the issues are. As you plan for the next phase, think about those human beings and plan to be inclusive as you roll it out." 

The next step is to meet regularly to fine-tune your processes. A good inventory management program has routine touchpoints, Matthews said, and these are cross-functional. She suggests regularly meeting not just with clinical staff but also with materials management, who directly impacts what goes into your lab. Even simply switching up stock locations can affect your overall success—in one case, Matthews saw cycle count time reduced to one or two teams this way. And across the enterprise, where you may have acquired many different hospitals with different systems, there may be opportunities to standardize the inventory you're using. 

Matthews has seen "huge success rates" in departments that regularly discuss these ideas with their physicians. "Often you can look at the supplies you've used and find areas for consolidation. Consolidation down to fewer items helps reduce costs because it gives you purchasing power," with vendors, whereby you can negotiate more of an item at a reduced cost. 

Consolidation by vendors is another approach physicians might have insight into, or replacing more expensive items with less costly items of the same quality. "When you pull these physicians in, you're empowering them to help you make the bottom line better," Matthews said. "If you don't routinely look at your data and share it with your physicians, you may not be able to make those decisions." 

Adopting a Technological Future to Prepare for the Unexpected 

The technology you're using needs to be able to support these standardization and consolidation efforts, while further optimizing the workflow by offering the ability to manage all stock from a central location accessible by all procedure rooms. We're shifting into an era of inventory management where some of the most successful programs are those that have been able to adapt, Matthews stressed. 

She cited Cabell Huntington Hospital, a West Virginia institution whose revenue stream changed dramatically after shrinking down its volume of inventory in order to better manage it. There, cycle counts were reduced, and revenue increased by 54% in the first year of a new program. 

Why was the program so successful? Because Cabell Huntington recognized the importance of balancing their considerations around people, process, and technology, Matthews said, and that this would be a continuous process. "The mindset you need to have, if you're going to make changes to your inventory program, is it's not a one-and-done. There are many facets to it, and this is a live environment—you need to adapt as you go." Preparedness for everyday challenges is just as necessary as preparing for the next disaster. 

Watch our conversation in full for more real-world examples of ways to better manage inventory and more details on Cabell Huntington's solution.