---
title: Inventory Management Issues in Healthcare Supply Chain
description: COVID & cost management are some of the healthcare inventory management issues affecting the hospital supply chain. Learn more about how they can be fixed.
image: https://blog.bluebin.com/hubfs/medical-supplies.jpg
---
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# Inventory Management Issues in Healthcare Supply Chain
 by [Jeremy Harvey](https://blog.bluebin.com/author/jeremy-harvey) Jul 20, 2021
Table of contents
Many Americans assume that hospitals achieved large profits in 2020 due to their high capacity. In fact, the COVID-19 pandemic forced the cancelation of elective and non-surgical procedures. This caused the median operating margin to drop by 55.6 percent without federal aid.
The healthcare industry had to make significant budget cuts. Hospitals had to quickly find ways to continue patient care with lower budgets and fewer resources. [Healthcare inventory management](https://bluebin.com/solutions/blueq-smartscan/) issues also created a significant strain on the clinical staff caring for patients.
Today there are innovative solutions to help within the [healthcare supply chain](https://bluebin.com/healthcare-supply-chain-solutions/) arena. What are some of the options, and how can they help your facility?
## COVID’s Negative Impact on Healthcare Supply Chain
[Healthcare supply chains](https://blog.bluebin.com/leading-the-way-with-covid-19-ppe-supply-analytics) suffered while trying to keep up with patients' needs. Forced business shutdowns due to quarantine halted production of numerous vital medical supplies.
Hospitals' decreased revenue made it difficult to uphold vendor contracts as well. The uncertain future affected distributor management. Some manufacturers changed production plans to try and meet the world’s need for PPE.
All this was happening as hospitals were overwhelmed with COVID patients. Facilities struggled to get enough PPE for their frontline staff.
In mid-2021, we are seeing hospitals return to more normal operations. Yet, in some areas, the supply chain is still in recovery.
Healthcare leaders understand that they must rely on data from trusted suppliers. Without accurate information, hospitals cannot guarantee essential supply availability. Making the effort for clinicians difficult and directly impacting patient care.
## Addressing Inventory Management Issues in Healthcare
Healthcare facilities must find reliable avenues to ensure short- and long-term supply management effectiveness and success. This includes optimizing supply due to demand and if needed keeping a stocked inventory that is well–tracked, sustaining PPE such as gloves, gowns, masks, face shields, respirators, and disinfectants.
Corporations and even consumers rose to the challenge and bolstered the supply chain. Hospital leaders procured critical supplies from sources outside of their usual partners.
The pandemic exposed the risks and weaknesses in the global healthcare supply chain. It also brought the roles and complexities of the involved players to light.
Now, healthcare facilities are taking new approaches to prevent future supply chain crises. The following describes some of the [processes and tools](https://www.beckershospitalreview.com/managing-the-entire-supply-chain-proactively-in-the-new-normal.html) they’re putting in place.
### Conservation of Supplies
The healthcare staff should meet and review the product shortages and allocation problems. Provided they have visibility and transparency to the data, they can use this information to revise policies and address new approaches to supply utilization. They can identify optional products and ways to shift and allocate needed supplies.
It’s key to search for surpluses of supplies in the vendor or provider community. Consider the option of reusing, re-sterilizing, or reprocessing PPE and other supplies.
### Refine Inventory Management
New information technology (IT) solutions are now available to [optimize inventory management](https://bluebin.com/solutions/blueq-smartscan/). One study found that [37 percent of facilities](https://www.allthingssupplychain.com/supply-chain-trends-of-2021/) use artificial intelligence (AI). Companies with AI, or even better, predictive analytics, report significant improvements in their supply chain.
AI and/or predictive analytic reporting increases staff productivity and inventory management. It also improves the vendor selection process as well as the customer experience. The AI system uses algorithms to improve organizations' sales and purchasing performance.
Machine learning (ML) improves operational workflow. It ensures that AI apps complete their functions. This also improves accuracy while preventing privacy violations and demographic biases.
These AI and ML systems are more agile to reduce inventory disruptions. The goal is to avoid a repeat of last year's supply shortages and prolonged shipping times.
### Reliable Distribution
The inventory management process needs to include metrics that reflect the supplier's performance. Examples include accuracy, fill rates, excess shipping costs, and inventory levels.
The system needs to measure your current or future allocation in relation to your demand. It should also verify and ensure the availability of emergency supplies. This helps guide you in making future product decisions.
### Supplier Representative Communication
To prevent a disruption in the supply chain flow, there must be open communication. The account executive or sales representative must understand your critical needs. Valuable supply leaders monitor inventories and help identify alternate sources when needed.
Maintaining a strong supply chain involves several factors. These include intentional product allocation, inventory management, and product conservation. All parties must take a proactive approach to achieve optimum efficiency. BlueQ Analytics is BlueBin’s solution to replenishment driven by true nursing and patient demand, providing the predictive analytics and inventory management tools to ensure proactive relationships that drive strategic policy decisions.
## BlueQ Analytics & SmartScan
A leading [healthcare supply chain analytic](https://bluebin.com/solutions/blueq-analytics/) and [inventory intelligence solution](https://bluebin.com/solutions/blueq-smartscan/) is BlueQ Analytics & SmartScan. The product offers the critical data you need to make smart decisions. You gain a competitive advantage by having access to the latest data.
The robust analytics allow you to maintain your supply inventory efficiently and reliably. This product provides spending management reports to efficiently guide the allocation of resources. Your hospital will have what it needs to care for patients and families.
BlueQ SmartScan offers functionality beyond that of the standard handheld ERPs. SmartScan uses Kanban or Par Cart processes to improve your inventory management.
## Ways to Protect Your Healthcare Supply Chain
There are several actions you can take to protect your supply chain. Consider the following suggestions.
- Choose a hospital supply company with years of experience and visible achievements
- Integrate AI/ML or predictive analytics into your system to enrich data-based decision making
- Proactively identify secondary and tertiary suppliers in the event of a disruption
- Develop a team culture that embraces change and can adapt as needed
- Develop relationships between front-line workers and supply managers
These tasks create an environment that’s prepared to identify and respond proactively. This reduces your chances of finding yourself in a supply chain crisis.
## Are You Looking for Help with Your Supply Chain Management?
Selecting the right solution can solve your inventory management issues. [BlueBin Kanban](https://bluebin.com/solutions/hospital-kanban/) offers a visual replenishment system. This ensures the delivery of supplies to the right place. You'll also get the correct quantity at the right time.
We offer BlueBelt training and certifications programs. This allows facilities to implement the Kanban system themselves. Your internal engineers will have the tools to meet the BlueBin system build standards.
Our team wants to help you achieve your strategic vision. [Contact us today](https://bluebin.com/contact/) to learn more about our solutions.
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Post by [Jeremy Harvey](https://blog.bluebin.com/author/jeremy-harvey)
Jul 20, 2021, 4:57:06 PM
Jeremy Harvey is the Senior Director of Marketing & Brand at BlueBin, where he architects content strategy and brand development for one of healthcare's leading supply chain solutions providers. With 21 years of marketing experience — including more than five years in healthcare supply chain and 13 years across B2B industries — he brings a strategic, data-informed approach to helping healthcare organizations understand the operational and financial value of smarter supply chain management. Jeremy holds a Bachelor's degree in Graphic Design & New Media and a minor in Industrial Technology, with a concentration in design.
[Follow me on LinkedIn](https://www.linkedin.com/in/thejeremyharvey/)
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