P D Hinduja Hospital and Research Center, Mahim.
1.1.1
Operationalisation of bar coding for inventory management at Hinduja Hospital
Department of Stores
Dr Anay Bhalerao
Dr Rushikesh Deshpande
1.1.2 Preface
Narsee Monjee Institute of Management Studies, under its Social Engagement Program, ‘We Care’, collaborated with P. D. Hinduja Hospital and sent us for a three week winter internship from 1st through 21st January 2012.
Backed with medical know-how from our backgrounds and management skills learnt at NMIMS, we worked under the Department of Stores at P D Hinduja Hospital. It was good learning experience for us and an opportunity to apply theoretical concepts to practical use.
The compiled report is the outcome of observation and analysis of the inventory in the main stores viz. the Medical Store, the Pharmacy Store, and the Operation Theatre Store. It is cross sectional study taken over a short period, covering many parameters and listening to views of all stakeholders and should be interpreted with this backdrop.
1.1.3 Executive summary
The Stores
There are three main stores in the hospital, who get shipments from the suppliers.
· The Medical Store
· The Pharmacy Store
· The OT store
The shipments arrive at different time period and a trace is kept of the inbound and the outbound logistics. From the stores, the inventory moves to the sub stores at the ward level by the ‘Just in Time’ method.
The accounting is done manually, and there is a need felt by the hospital to implement a digitalized method to keep trace as this would reduce the record keeping as well as improve traceability of the same in the long run.
The study was carried out to find the problem areas, identification of the potential bottle necks and to recommend on a plan for the implementation of the whole project
Observations
We observed that the stock arrives in a different way for each store, and a different percentage of it is actually inventoried in the warehouses. This creates a need for a Phasic implementation of the plan.
Recommendations
We recommend that the plan be implemented in a Phasic manner, spanning over a period of 5 - 6 months. The detailed phases are included in this report.
We also give recommendations for the necessary manpower and the machinery to implement the project.
1.1.4 Acknowledgements
We thank Director of Hospital, Mr. Chakraborty, for giving us this opportunity to work on this project. We express our gratitude towards Dr Goraksha who was our mentor and was a constant motivator. She provided the guidelines necessary to see this project through in timely manner. Ms. Bhavisha Kharnare was of invaluable help with lending us the required data for the project, as well as valuable insights in the process. We thank the respective heads of the stores, Ms. Makhija, Ms. Geetali and Mr. Tambe, and their staff who found time in their busy schedule to answer our queries.
Lastly, we thank the Library staff who tolerated our presence throughout the project and helped us with the same.
Dr. Anay Bhalerao Dated 20 Jan 2012
Dr. Rushikesh Deshpande. Hinduja Hospital, Mahim.
Table of Contents
Sr No / Topic / Page no1.1.2 / Preface / 02
1.1.3 / Acknowledgements / 03
1.1.4 / Executive Summary / 04
1.1.5 / Chapter 1:Introduction and Research Methodology / 05
1.1.6 / Chapter 2: Role of Bar Code / 09
1.1.7 / Chapter 3: Resources / 11
1.1.8 / Chapter 4: Recommendations / 13
1.1.9 / Chapter 5: Plan for Execution / 15
1.1.10 / Chapter 6: Other Recommendations / 20
1.1.5 Chapter 1
Introduction and research methodology
P D Hinduja Hospital
For last 60 years, Hinduja hospital has been serving Mumbai by providing tertiary level medical facilities. With capacity of 394 beds it truly fills up the need for a world class super specialty tertiary care hospital. Any healthcare institute to run to its potential best requires good doctors i.e. medical fraternity, good paramedical staff and an efficient supply of drugs and medical provisions.
In last three weeks we have studied the third aspect of at Hinduja.
Research Objectives
· To study inventory management at P D Hinduja hospital
· To suggest a plan for implementation of Bar Code System for inventory management
Warehousing at Hinduja Hospital
Being a hospital, the supplies primarily include drugs, chemicals, medical equipments and Medical instruments. The storage becomes a daunting task not just because of the value of the inventory but also due to the specific requirements like refrigeration, sterility, delicate handling and ready availability.
Components of warehousing
There are three distinct warehouses which are referred to as ‘stores’ in the premises.
1) Medical Store
2) Pharmacy
3) OT store
There is a CSSD department, which handles the sterilization and subsequent packaging of materials like cotton, gauzes etc which would require sterilization.
Medical store:
It houses items like tubes, catheters and materials which are strictly speaking not drugs. Total value of the in house items in December was Rs_17234771 Based on the value the all items are segregated into the ABC lists.
List of item / Value of the total items in the list / Total number of distinct itemsA / 70% / 245*
B / 20% / 385*
C / 10% / 181*
* It includes stock consignment items as well as some supplies to cath. lab and IVF.
Pharmacy:
The primary drugs store of the hospital. It caters to demand from the wards. Staff nurses enter requirements in the computerized system which is reflected in the pharmacy store. The demand then is met by providing the drugs at regular intervals. Attendants carry the drugs after every two hours to the wards in consideration. The system is efficient and works fine.
For pharmacy ABC listing is as follows:
List of item / Value of the total items in the list / Total number of distinct itemsA / 70% / 135
B / 20% / 261
C / 10% / 1572
OT store:
55 % of the items that are issued form this store are consignment items. It is difficult to bar code these items, at least initially. The inventory runs up to Rs 23436513. The A list would then, be valued at Rs 16405559. Out of that, around 17 Stock items qualify for the A list.
List of item / Value of the total items in the list / Total number of distinct itemsA / 70% / 88
B / 20% / 270
C / 10% / 843
In all three stores there is another criterion for segregation of products, which is based on the process followed for the purchase and storage of the item. It reflects the value of the individual item as well as demand and date of expiry.
4 categories
Consignments: The stock is not maintained in the warehouses. It is delivered by the supplier as needed on a daily basis. Unused stock is returned back.
Stock Consignments: Consignment items with special code
Stock Items: for a month at the maximum
Manual Orders: for items not in the list- generally misc items like drip stands, etc
Scope of our study is limited to A list items with Stocking capabilities.
Process of purchasing and billing:
Three departments are stakeholders in this process viz. stores, purchase department and finance department. For stock items which are housed in the stores, inventory is maintained for less than a month. Fast moving items like gloves for which turnover is very high are stocked for fewer days. Orders are placed with suppliers directly and goods are received on a weekly or fortnightly basis. Different products have this cycles going on different days. So the incoming goods keep coming almost every day. After the goods are checked and confirmed, the store concerned with the stock prepares A “Goods Received Note” This is then handed over to the supplier. GRN gets paid by the Finance department afterwards. Purchase decisions like price negotiations and initial entry in the system like generating product code for a new item is done by the Purchase department.
For Stock consignments a similar process is followed but there is provision of returning of the items. A bare minimum stock is maintained. Generally these items have low storage life and thus the process ensures that FDA norms are met. For consignment items, which are infrequently required and are not stocked at all, a supplier comes to hospital with required set of items, these get consumed by the end used users like OT and then the supplier comes to store. The item is there is the system. A GRN is prepared and process continues. Manual orders are an exception, as the items are included in the list. A separate record is kept for such rare items like Drip stands etc.
1.1.6 Chapter 2
Role of Bar Code
System of Bar coding product has been adopted well all over the world and has been a revolution for billing in retail sector and inventory management. A computer generated code is printed and sticking of that code is applied to the item or SKU of item to be specific. The code contains information about the product. For hospital items variables in the code will be:
1. Lot number - this is present over packaging and is also mentioned on the GRN
2. Date of Manufacturing - For the same lot
3. Date of Expiry – very important consideration. Every time a product is checked out and delivered. The process of checking this date is necessary. When manually done, it is indeed cumbersome and consumes time.
4. Price – Purchase price or selling price as per requirements.
Types of bar code:
1) 1-D
2) 2-D
Both codes have their own advantages and disadvantages. There is limitation on number of characters which can be fielded on a barcode. This limit is less for 1-D and more for 2-D ones and depends on specification attributed by service provider.
IT department has already identified the type and specifications required. As informed to us the 2-D code will be of size 15*15 mm.
Flow of activities:
Fig 1.1
1.1.7 Chapter 3
Resources
Before the start of the project, there would be a necessity of the following
· Bar code printers
· Bar code scanners
· Man power to implement the project
Bar Code Printers:
On an average, a weekly shipment consists of 8,000 units to any store. The outbound is different for different stores. Out of that, around 4000 - 6000 units would be from A list.
The printer should be able to print the codes at sufficient speed so as to take the immediately required inventory in the stock, say within 2 hours. The rest can be accounted for, as it is done currently spanning over one or two days.
Bar Code Scanners
They would be required to scan the codes affixed to the SKUs.
We recommend 2 scanners initially at each store.
Man Power
There would be a need for man power at three different areas in each store.
· One person (at least) to enter the codes necessary for printing of the bar codes
· Two persons (at least) to affix the codes to the relevant item properly
· One person (at least) to supervise the process and troubleshoot
A person, on an average, would be able to affix around 80-100 bar codes per hour. For an 8 hours shift, with an efficiency of 60%, he would be able to affix around 400-500 bar codes per day. The efficiency of work would increase, as he gets acclimatized to the work.
The inventory is sizable and the work required would require additional personnel for the first two tasks.
The supervision should be done, at least initially by a person currently working in that department. He/ She can also help in the above mentioned tasks if need arises.
The close proximity of the medical store and the Pharmacy stores may be used to utilize the resources commonly
Setting up of a separate unit for bar coding may be economic in this case.
1.1.8 Chapter 4
Recommendations
The bar code implementation for all the stores and sub stores would span over a period of 5-6 months depending on the ease of implementation and the benefits. Our recommendations, though general for all the main stores, would differ slightly for each store taking into account the limitations for each department.
Pharmacy Store
This store has a lot of moving inventory. Thus it would benefit the most if the project meets the expectations.
Strengths
The Pharmacy has a decent space to install the printers and the scanners. It would be ideal to start a pilot run for the implementation of the project.
Problem Areas
The pharmacy stocks the smallest Stock Keeping Units (SKUs) amongst the three stores. The size of the SKU is the outermost packing in which the item is dispensed. The ampoules and some lancets are small, and it would require a different kind of either packaging or a Bar code (1D bar code) for the same.
Medical Store
This is the main warehouse where the non pharmacy items are stored. The medical store, as with pharmacy, caters to the whole hospital.
Strengths
All the SKUs within this store are packaged in such a way that bar coding would not be a problem.
Problem Areas
There is barely enough space to install a separate printer and a place to print and affix the bar codes.
Operation Theatres
The operation theatres are situated independently over the 3rd floor. The inventory is made up of consignment, as well as stock items.
Strengths
· Fast moving stock. Thus the bar coding would be most beneficial
· Consignment items returned back promptly after use. Thus filtering of items which should be bar coded is easier
Problem Areas
· A lot of consignment items would make it difficult to implement the bar coding there, due to the paucity of time
· It is 2 floors below the other stores. Thus a separate printer setup would be required
1.1.9 Chapter 5
Plan of execution