Automate restocking supplies to cut costs

Hospital supplies and inventory make up 30 to 40 percent of a hospital's average budget, according to University of Cincinnati (UC) researchers. One way to cut down on those costs is to automate how nursing stations are stocked with medications, materials, and office supplies, the concept behind UC research to be presented at an Institute for Operations Research and Management Science Healthcare Conference in Montreal on June 22.

At most institutions, hospitals resupply nursing stations periodically. However, when the nursing station is out of a particular item, nurses must take the item from another station, particularly in emergencies. New RFID (radio-frequency identification) technology could send a message to the storeroom, notifying appropriate people that an item is running low.

That automation may save hospitals 18 percent in labor costs associated with resupplying those items, according to UC.

"Hospitals want to hit the right balance of sufficient but not-too-many supplies," said Claudia Rosales, graduated doctoral student in quantitative analysis now at Michigan State University, in a statement. "Keeping unnecessary levels of inventory can increase costs significantly. But lack of sufficient inventory may hinder patient care and disrupt nursing activities. So, there's a cost associated with that too. The joint resupply model tends to even out demand uncertainty, which is where there is a burst of demand for an item. If we can even out such emergency demand spikes via the joint model, that's a significant cost savings for the hospital."

Many struggling hospitals are examining ways to cut down on operating budgets. However, for technology improvements, hospitals often must first invest in resources before seeing financial benefits.

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