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Application of a hybrid selective inventory control technique in a hospital: a precursor for inventory reduction through lean thinking

Anand Gurumurthy (Quantitative Methods and Operations Management (QM and OM) Area, Indian Institute of Management Kozhikode (IIMK), Kozhikode, India)
Vinoth Kumar Nair (Materials Management Department, Apollo Adlux Hospital, Angamaly, India)
S. Vinodh (Department of Production Engineering, National Institute of Technology, Tiruchirappalli, India)

The TQM Journal

ISSN: 1754-2731

Article publication date: 28 August 2020

Issue publication date: 27 April 2021

552

Abstract

Purpose

The cost of providing healthcare is spiralling up in recent times. On the one hand, patients expect the highest quality of service, while on the other hand, the managers of the healthcare services want to minimise the total operating expenses. Hence, healthcare organisations implement lean thinking (LT) to achieve these twin objectives. LT reduces the eight wastes that are prevalent in the healthcare processes and functions. In particular, if the wasteful inventories related to expensive medical supplies are reduced, the resulting cost savings can help in providing affordable and accessible healthcare.

Design/methodology/approach

Hence, in this paper, a case study of a hospital is presented where LT is implemented. One of the projects was related to inventory reduction in the store of the catheterisation laboratory (cath lab). A hybrid methodology called multi-unit selective inventory control (MUSIC) that combined these three dimensions (3D), namely, consumption value, criticality and lead time or ease of availability was used to classify the medical supplies into different categories.

Findings

Based on the results obtained, various inventory systems and the associated tools and techniques of LT were proposed. For example, a deep dive into the A-class items revealed that some of the medical supplies fell under both vital and scarce categories. Hence, it was recommended that the case hospital should follow the economic order quantity (EOQ) with safety stock approach as these items were to be shipped from other states in India. Subsequently, the focus should be on developing a local supplier and attempts should be made to establish a kanban system with adequate information sharing.

Practical implications

This study demonstrates the step-by-step methodology of MUSIC-3D which would guide the procurement managers to apply the same in their organisation. It also helps them in identifying appropriate elements of LT for inventory reduction before the actual deployment.

Originality/value

None of the papers has utilised the MUSIC-3D methodology as a precursor for inventory reduction, specifically within the domain of LT. Similarly, identifying and proposing different type of inventory systems and various LT practices based on this unique method is a novel attempt.

Keywords

Acknowledgements

The author(s) would like to thank the anonymous reviewers for their insightful comments. Also, the author(s) want to thank the case hospital for providing us with necessary data to carry out a detailed analysis using the MUSIC-3D approach.An initial version of the idea with the title “Application of MUSIC-3D for Inventory Management in a Hospital – A Case Study” was presented in the XXII Annual International Conference of the Society of the Operations Management (SOM 2018), held on 20-22 December 2018 at Indian Institute of Management Kozhikode (IIMK), Kozhikode, Kerala, India.

Citation

Gurumurthy, A., Nair, V.K. and Vinodh, S. (2021), "Application of a hybrid selective inventory control technique in a hospital: a precursor for inventory reduction through lean thinking", The TQM Journal, Vol. 33 No. 3, pp. 568-595. https://doi.org/10.1108/TQM-06-2020-0123

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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