Taking Stock

You walk into the medical supplies closet on Monday morning and find it looking like a tornado blew through the room, leaving rolls of gauze unraveled, packages of 4x4s opened and wrappers from various items scattered about. You have no idea where the items went, what they were used for or to whom to bill the expense. Your board of director's treasurer wants you to be more accountable for these costs, but, with mornings like this, it makes it difficult to accurately account for the items in your inventory.

     As organizations grow, their inventory management becomes more complex. What was once a small closet that housed items like gauze, Band-Aids and tape has turned into large rooms-sometimes sheds-full of items like CPAP circuits, disposable head blocks, oxygen-delivery systems and end-tidal CO₂-detection devices. As EMS managers, it is our responsibility to have a firm grasp of the inventory we have at our disposal.

     A study performed in 2002 estimated the amount of money lost to inventory issues across the retail industry in America during the previous year to be $31.3 billion, which is about 1.7% of total sales. Although this example is specific to the retail industry, let's apply that percentage to a fictitious EMS organization's operating budget:

Agency's annual operating budget:

Large agency $580,000/yr

Small agency $160,000/yr

Inventory shrinkage percentage:

Large agency 1.7%

Small agency 1.7%

Total unused inventory (dollars):

Large agency $9,860

Small agency $2,720

     Did you know that almost 2% of your operating budget is being thrown away each year? The following tips will help reduce the amount of inventory lost to theft, vendor fraud, administrative error, etc.

Lock the Doors
      To make it easier for personnel to restock vehicles, many EMS agencies never lock storage areas that often contain very expensive equipment. The bottom line is, EMS managers have to restrict access of people who don't need to be in storage areas. It's a good idea to have one or two people per shift responsible for restocking. Although restocking usually falls on the "new guy" or lowest-ranking individual, it should be supervised by someone who is trusted in the organization. By controlling access, managers find it easier to avoid the common "I don't know, I wasn't in there" response to the "What happened here?" questions.

Just In Time
      Just in Time (JIT) is a business concept where inventory is delivered quite literally just in time for use. This is not possible with all of the supplies used in EMS; however, through careful planning and review of used items, it is possible to estimate frequency of usage. How many drugs are thrown out each month when they expire? Items with a shelf life should most certainly be managed using JIT. Excess inventory can be just as detrimental to an organization as not having inventory at all. JIT balances needs versus delivery. With today's advanced mailing systems, most items are a day or two away at most. Talk to your vendors and see if they can help set up a system that works for you while preventing your organization from becoming a warehouse.

It's a Numbers Game
      "Do I really have to count each and every item in that room by hand?"

     Yes.

     The only true way to know exactly what you have is to count. Most industries recommend a yearly physical accounting of the storeroom; however, with the amount of supplies used and the large number of people using a storeroom, EMS agencies should perform a physical inventory every six months to be sure. Find an independent person to validate your results. If your EMS agency is part of a fire department, enlist the help of a non-EMS officer to conduct your audit. Board members and town officials will also work in smaller communities. Depending on the size of your medical inventory, this process can take anywhere from two hours to two days.

We Have the Technology
      When I web-searched "Inventory Management," I received 88,330,000 hits in .11 seconds. The first few pages were flooded with advertisements for inventory tracking systems, which can be extremely expensive with the addition of bar code scanners and tracking systems, but these additions do assist with the accuracy of your physical inventory. Although any of these systems will most likely be adequate, if you are looking for a cheap and easy way to track your inventory, Microsoft Template Gallery on www.office.microsoft.com has free, downloadable inventory tracking systems. Your only requirement is having a valid copy of Microsoft Office.

Dedicate Personnel
      Like most other systems, if there are too many unmanaged hands in the pot, any system you have set up is bound to fail. As an EMS manager, inventory management usually falls under your job description; however, don't hesitate to designate someone you trust or recommend that a logistics position be created. Ensure your vision is clearly relayed to your designee, and then allow that person to manage the process.

Conclusion
      In addition to saving money, a good inventory management program can help build morale within an EMS agency. Eliminating the frustration of not being able to find items, not having appropriately stocked items or not stocking necessary items can increase the standards to which your personnel operate. The money saved can be used for other necessary items or equipment. With more accurate accounting of inventory, the guesswork is removed with respect to ordering, budgeting and research. Isn't it time you took control of your inventory?

Daniel E. Glick, BPS, AEMT-CC, is the executive director of the Mountain Lakes Regional EMS Council (NY) and a health service administrator for the 139th Aeromedical Evacuation Squadron, New York Air National Guard. He can be reached at deg3142@gimail.af.mil.