It’s the end of the month. With a pang of guilt, you throw outdated, expired, or unused inventory into the dumpster. You shudder to think how much money you just threw away. $10,000? $100,000? More?
We’ve seen it happen before. Unfortunately, this is not an uncommon situation for the healthcare industry. We once witnessed a client throw out $260,000 of inventory at the end of one month. It was a wakeup call.
What Causes Expired Inventory?
There are several culprits that we’ve seen. The most common issue is the complicated manual processes that are often used by healthcare organizations. We’ve seen it all: sticky notes, colored stickers, eyeballing, manual stock rotation, notepads. Missing a sticker or forgetting to reach to the back of a bin to pull things to the front are all simple oversights. And people make mistakes; it’s human nature.
However, there are other potential traps, too. For starters, there’s the case of misplaced inventory. Maybe it is in the wrong location. Or perhaps it has been hidden somewhere by someone for later use. It happens all the time. There’s also the fact that vendors will often ship inventory that’s near expiration. In these situations, hospitals receive an implant that, without even realizing it, may expire in as little as a week. These items expire on the shelf and must be tossed out and replaced.
This is not only frustrating—it’s extremely expensive.
So, How Do You Solve the Problem?
To combat the issue of outdated or expired inventory, it’s important to proactively address things before it’s too late. But how does an organization do this? Standardized processes are a good start. We’ve seen hospitals that vary their methods from floor to floor, even room to room—so it’s no wonder that products slip through the cracks. Selecting a process for your hospital ensures that everyone is trained and aligned. You will see improvements.
Technology Is the Vehicle That Drives the Elimination of Expired Products
For example, RFID (radio-frequency identification) readers can automatically track and trace items from receipt to utilization with almost no human intervention. The technology allows for tracking and reporting on inventory as it ages. For example, say you want to know what inventory is within 90 days of expiring. You can now run a report that will tell you what fits that description and where it is located. You can then decide what you would like to do with it before it expires:
- Should you keep it longer?
- Can you transfer it to another location in need?
- Should you return it?
Ultimately, RFID empowers organizations with the proactive authority to make a timely decision.
The Benefits of Standardization
Hospitals all over the U.S. are struggling with the situation of expired inventory. Know that you are not alone in this arena. As much as 30 percent of physician preference items (PPI) end up in the trash. However, you have the power to stop it.
Standardizing your processes and technology into a point-of-use solution (POU) enables teams to track consigned inventory from each vendor, so they know exactly what they have and what they’ve used. SSO (single-sign-on) functionality enables clinical staff members to populate their inventory, EMR (patient records, billing), and ERP (reorder) systems with one transaction.
The result? No more discrepancies. Say goodbye to the days of sticky notes and colored stickers. Teams can now identify products that will expire, giving them an opportunity to make decisions—before it’s too late. POU enables teams to save thousands, if not hundreds of thousands, of dollars in expired products.
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