Module 5 - Inventory Management

8/3/2019 Module 5 - Inventory Management

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Inventory ManagementInventory Management


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Purchasing& Inventory

AssessmentOccurrence

Management

Information

Management

Process

ImprovementCustomer

Service

Facilities &

Safety

The Lab Quality SystemThe Lab Quality System

Organization Personnel Equipment

Process

Control

(QC & EQA) &Specimen

Management

Documents

& Records


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Learning ObjectivesLearning Objectives

At the end of this module, you will have a better

understanding of how to:

Maintain proper inventory records

Maintain proper level of inventory

Use first-in-first-out concept when managinginventory

Inspect delivery of supplies beforeacceptance

Identify lot numbers and expiry dates

Keep kits and supplies in proper storage

At the end of this module, you will have a better

understanding of how to:

Maintain proper inventory records

Maintain proper level of inventory

Use first-in-first-out concept when managinginventory

Inspect delivery of supplies beforeacceptance

Identify lot numbers and expiry dates

Keep kits and supplies in proper storage


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Content OverviewContent Overview

What is inventory management?

Inventory records

Re-order levels Inventory storage

Inventory delivery

What is inventory management?

Inventory records

Re-order levels Inventory storage

Inventory delivery


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Inventory Management MeansInventory Management Means

Properly maintaining

adequate stocks to ensure

uninterrupted service


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Inventory In A Laboratory

Includes:

Inventory In A Laboratory

Includes:SuppliesReagentsForms

SuppliesReagentsForms

Inventory (or stock) = the supplies and

materials you need for all lab

performance


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Inventory Management Leads to

High Quality Testing

Inventory Management Leads to

High Quality TestingInventory management:

Ensures availability of materials and kits

when neededAvoids the use of expired kits

Minimizes wasting

Inventory management:

Ensures availability of materials and kits

when neededAvoids the use of expired kits

Minimizes wasting


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How Do You Manage Inventory?How Do You Manage Inventory?

You own a small store. Youbuy the merchandise fromsuppliers and sell them for a

profit. To keep a profitablebusiness, you must alwayshave the right itemsavailable for customerpurchase everyday.

What must you do tomaintain adequate stocks?

You own a small store. Youbuy the merchandise fromsuppliers and sell them for a

profit. To keep a profitablebusiness, you must alwayshave the right itemsavailable for customerpurchase everyday.

What must you do tomaintain adequate stocks?


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Inventory Management Involves

Knowing


Knowing What and how much stock you have

When to order fresh supplies

What and how much has been ordered,when it was ordered

Where all supplies are stored

When and how much fresh stock wasreceived, and by whom

What and how much stock you have

When to order fresh supplies

What and how much has been ordered,when it was ordered

Where all supplies are stored

When and how much fresh stock wasreceived, and by whom


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Doing


Doing Performing a stock count

Maintaining proper inventory records

Determining when to re-order

Determining how much to re-order

Placing orders properly

Inspecting delivery of new orders

Ensuring proper storage of inventory

Performing a stock count

Maintaining proper inventory records

Determining when to re-order

Determining how much to re-order

Placing orders properly

Inspecting delivery of new orders

Ensuring proper storage of inventory


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Perform a Stock CountPerform a Stock Count

What is it? Physically counting each itemin the inventory

When is it

done?

In the beginning of each

month recommended

Who does it? A designated person

All stock must be accounted for. Everything that

comes in and goes out must be recorded.


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Maintain Proper Inventory RecordsMaintain Proper Inventory Records

Stock Card

Simple, heavyweight cards

Kept for each item in stock

Stock Card

Simple, heavyweight cards

Kept for each item in stock

Stock Book or Computer Record

Contains listing of all items in the laboratory

Update monthly after physical count Use information from stock cards

Stock Book or Computer Record

Contains listing of all items in the laboratory

Update monthly after physical count Use information from stock cards


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Stock Card: An ExampleStock Card: An Example

Item Name: __________ Unit: ___________

Manufacturer: ________________________

Minimum Stock (Re-Order Level): ___________

Item Name: __________ Unit: ___________

Manufacturer: ________________________

Minimum Stock (Re-Order Level): ___________

DateReceived

From

Issued

to

Quantity

Received

Quantity

Issued*Balance Lot # Signature


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Stock Book: An ExampleStock Book: An Example

ItemName

Qty(units)

Requested

Date

Requested

Qty

Received

Date

Received

Lot # Expiry

Date


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Determine When to Re-orderDetermine When to Re-order

Terminology:

Minimum stock - Amount of stock requiredto support testing operations until additionalsupplies are received

Lead time Time between placing an orderand receiving it

Maximum usage number of test devicesused in a given time period

Terminology:

Minimum stock - Amount of stock requiredto support testing operations until additionalsupplies are received

Lead time Time between placing an orderand receiving it

Maximum usage number of test devicesused in a given time period

Re-order when inventory reaches minimum stock level


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Calculating Minimum Stock LevelCalculating Minimum Stock Level

Maximum lead time = 2 weeks

Maximum usage/wk = 3 kits

Minimum stock level = 2 x 3 =6

kits

When only 6 kits are left, place an order



Minimum stock level = 2 x 3 =6

kits

When only 6 kits are left, place an order

= Maximum leadtime in weeks

X MaximumUsage

Minimum Stock

Level


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Exercise:

Calculating Minimum Stock Level

Exercise:

Calculating Minimum Stock Level

On average, you use 2 BHCG kits a week.

It normally takes 2 weeks to receive the order

you placed. You should order more BHCG kits when you

have ____ kits left in the inventory.

On average, you use 2 BHCG kits a week.

It normally takes 2 weeks to receive the order

you placed. You should order more BHCG kits when you

have ____ kits left in the inventory.

= Maximum leadtime in weeks

X MaximumUsage

Minimum Stock

Level


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Determine How Much to Re-orderDetermine How Much to Re-order

Never order more than your storage spacecan hold

Never order more supplies than you canuse before they are expired

Consider maximum usage plus minimumstock level

Consider shipping costs when placingorders

Never order more than your storage spacecan hold

Never order more supplies than you canuse before they are expired

Consider maximum usage plus minimumstock level

Consider shipping costs when placingorders

Establish proper full stock level. Re-order

to reach that level.


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Determine Proper Full Stock Level:

An Example

Determine Proper Full Stock Level:

An ExampleMaintain an inventory that covers a months

maximum usage plus minimum stock level



Minimum stock level = 2 x 3 =

6 kits

When only 6 kits are left, placean order.



Minimum stock level = 2 x 3 =

6 kits

When only 6 kits are left, placean order.

Usage/Month = 3 kits/wk x 4 wks= 12 kits

Minimum stock level = 6 kits

Proper inventory level = 12+6 =18

You must always have 18 kits inthe inventory in the beginning ofeachmonth.

Usage/Month = 3 kits/wk x 4 wks= 12 kits

Minimum stock level = 6 kits

Proper inventory level = 12+6 =18

You must always have 18 kits inthe inventory in the beginning ofeachmonth.


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Exercise: Minimum Stock Level and

Proper Full Stock Level

Exercise: Minimum Stock Level and

Proper Full Stock Level On average, you use 1 box of gloves

each week (or4 boxes a month).

It takes 3 weeks to receive the orderyou placed.

On average, you use 1 box of gloveseach week (or4 boxes a month).

It takes 3 weeks to receive the orderyou placed.

Determine:

What is the minimum stock level? How many boxes should be in the

inventory in the beginning of each month?

Determine:

What is the minimum stock level? How many boxes should be in the

inventory in the beginning of each month?


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Place Orders ProperlyPlace Orders Properly

An ordering system must be in place

Follow ordering protocol

Ensure relevant ordering (requisition)forms are on site

An ordering system must be in place

Follow ordering protocol

Ensure relevant ordering (requisition)forms are on site


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Inspect Delivery of New OrdersInspect Delivery of New Orders

Upon receipt:

verify contents of order received withrequisition

Check integrity of received supplies

Date each item

Note expiration date

Store new shipment behind existing shipment Create or update records

Upon receipt:

verify contents of order received withrequisition

Check integrity of received supplies

Date each item

Note expiration date

Store new shipment behind existing shipment Create or update records


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Examine Lot Number & Expiry DateExamine Lot Number & Expiry Date


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Ensure Proper Storage of InventoryEnsure Proper Storage of Inventory

Keep in a clean, organized, and lockedstoreroom

Store according to manufacturers instructions

Place in well ventilated room

Store away from direct sunlight

Keep in a clean, organized, and lockedstoreroom

Store according to manufacturers instructions

Place in well ventilated room

Store away from direct sunlight

Place items on shelves

New shipments placedbehind existing items

Place items on shelves

New shipments placedbehind existing items

First in, first outFirst in, first out


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SummarySummary

What does inventory management mean?

What information is recorded in inventoryrecord-keeping?

How do you determine minimum stocklevel?

How do you determine proper full inventorylevel?

What does First In First Out mean? What procedure should you follow when

receiving new kits and supplies?

How should kits and supplies be stored?

What does inventory management mean?

What information is recorded in inventoryrecord-keeping?

How do you determine minimum stocklevel?

How do you determine proper full inventorylevel?

What does First In First Out mean? What procedure should you follow when

receiving new kits and supplies?

How should kits and supplies be stored?


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Key MessagesKey Messages

Maintain an adequate inventory at all timeto ensure uninterrupted service.

Dont let any item run out before re-order.

Never order more than your storage spacecan hold. Never order more supplies thanyou can use before they are expired.

All items in the inventory must beaccounted for and recorded.

Always inspect new shipment beforeaccepting.

Maintain an adequate inventory at all timeto ensure uninterrupted service.

Dont let any item run out before re-order.

Never order more than your storage spacecan hold. Never order more supplies thanyou can use before they are expired.

All items in the inventory must beaccounted for and recorded.

Always inspect new shipment beforeaccepting.

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