Improving ASC Inventory Management: 6 Steps to Take

Looking to strengthen your ASC's bottom line? Improving your inventory management processes can yield financial and operational benefits

Add specialties. Purchase capital equipment and start performing new procedures. Expand the existing physical space and build additional operating rooms.

These are some of the common recommendations made to ambulatory surgery centers (ASCs) about how they can grow their bottom line. While they are all worthwhile suggestions, they are also not simple to execute and can cost a lot of money. On the other hand, a frequently overlooked suggestion, and yet one that tends to be highly successful, does not usually require ASCs to invest heavily. Rather, it requires them to spend smarter. We're talking about improving inventory management.

On an average ASC's income statement, drugs and supplies are often the biggest line item. Optimizing inventory management is key to ensuring that an ASC always has the stock it needs to perform scheduled procedures while avoiding waste and the need for rush purchases that can drive up expenses.

Best Practices to Optimize ASC Inventory Management

By improving ASC inventory management, surgery centers can reduce their costs — possibly quite significantly. Here are six steps surgery centers can take to help achieve meaningful and lasting inventory savings.

1. Provide ASC staff with appropriate training and resources

Every member of your team involved in the ASC inventory management process should receive training focused on their roles and responsibilities. Do not assume that staff will know how to perform any of their tasks. Even small mistakes or oversights can lead to irresponsible purchasing, lost inventory, and other unnecessary and avoidable expenses.

Monitor your staff's inventory management efforts carefully, correcting errors when observed. Then re-monitor efforts to ensure staff properly perform the corrected actions. If staff struggle with one or more areas of their ASC inventory management responsibilities, consider creating "cheat sheets" they can use to verify that they are performing tasks appropriately.

2. Use your ASC inventory solution to its full potential

Some ASC management software includes an inventory tool that can greatly help with inventory management. Yet, ASCs may not use the solution at all, only partially use the tool, fail to keep the information in the solution current, or use software lacking such a valuable tool. If your ASC falls into any of these categories, this is a big opportunity for improvement.

SIS Complete and SIS Advanced include a powerful ASC inventory management solution that provides centers with automation and greater insight into their inventory, delivering benefits that include costs savings and improved case costing accuracy. Investing in and using ASC software that includes an inventory management tool to its full potential can also reduce inefficiencies that lead to unnecessary spend.

3. Watch for avoidable expenses

There are many avoidable ways ASCs can waste money concerning their inventory management. Examples of waste include:

• drop shipping charge due to a last-minute order;
• penalty associated with late payments;
• rush delivery fees;
• purchasing from a non-contracted vendor;
• supplies expiring;
• items being misplaced or lost, leading to additional purchases; and
• supplies that are opened but not used for a procedure that must still be discarded.

Any time you can eliminate one of these wasteful ways is a win for your ASC's bank account.

4. Keep ASC supply pricing in the spotlight

If your surgery center tends to discard a lot of supplies because they are opened but never used for a case, draw attention to the cost of these supplies. Put pricing on storage bins. Include pricing on preference cards. Hang up posters reminding staff about the cost of those items most frequently discarded. Provide training specific to pricing. Consider emulating some of the games in "The Price is Right" to help reinforce training in an enjoyable fashion.

5. Shop around for a GPO

Group purchasing organizations (GPOs) can help ASCs achieve purchasing savings and efficiencies because they aggregate purchasing volume and then use this leverage to negotiate pricing discounts. But not all GPOs are the same. Differences can include pricing (e.g., some have no annual fees), manufacturers on contract, and services offered. Even if you have a good relationship with your GPO, it's always worth examining what other GPOs may offer.

GPOs often offer services — sometimes complementary — that can help your ASC save money beyond the volume discounts. As the Healthcare Supply Chain Association notes, these can include data analysis and benchmarking, innovative technology integration, market research, and emergency preparedness.

Determine what services your GPO offers and see if they may be worthwhile, perhaps to replace a service you are currently paying for. You can also make outreach to your GPO account representative about the organization's services an ongoing initiative. GPOs regularly add new services that may help improve inventory management and purchasing.

6. Limit storage locations

As your number of supply storage locations increases, so does the potential for supplies to be misplaced and eventually expire. When weighing whether to add a new storage location in your ASC, determine if it's truly needed. Staff will often request a new location for convenience. Weigh that convenience against the potential risk of an additional storage area.

If you add a new supply storage location, implement rules and processes to help ensure supplies always go to their appropriate locations (a worthwhile rule if you have multiple locations). During the initial few months that staff are using the new storage location, monitor and audit the location regularly to assess whether the appropriate items are going into it. Staff may start putting other items into the new storage area if it's convenient for them rather than return the items to a now less-convenient location.

Maximizing the Value of ASC Inventory Management Technology

While all the best practices identified can help strengthen an ASC's inventory management, adding an inventory management solution or expanding how you use an existing tool may have the biggest, long-term impact. ASC inventory management technology is helping surgery centers like St. Mark's Surgical Center improve how they track their inventory, ensure more appropriate purchasing, and reduce expensive waste, among other significant, positive changes.

What can powerful ASC inventory management technology do for your center? Schedule a demo of SIS Complete to find out!