Did you know that the global supply chain industry is expected to grow by 11.2% from 2020 to 2027? No business can function without a functional supply chain.
In the global business landscape, the supply chain operates as the vascular system of operations, delivering the necessary goods and services to the correct destinations within specified timeframes. Like in a life-sustaining biological system, a hitch in the supply chain can trigger systemic disruptions, crippling business operations and causing financial hemorrhages.
Failure in the supply chain disrupts the sequence of operations, impeding a business's ability to deliver promised value to its customers. This can have detrimental ripple effects that compromise the institution's reputation, customer satisfaction, and profitability.
They might get lost, damaged, or shipped to the wrong location. This will make your inventory holding cost much more expensive. But this is where a 2-Bin hospital kanban system can help.
This system makes healthcare inventory management easier than ever before. The 2-Bin Kanban system, a model of efficiency, is based on the simple concept of reorder point, where the replenishment process is triggered when the inventory level hits the minimum threshold or PAR. Often deployed in medical facilities, the system uses two physical bins to cycle inventory, allowing for continuous supply and minimal interruption. It uniquely offers visibility into consumption patterns, helping in predicting demand and thus preventing both overstocking and stockout situations. But what is so unique about this system, and what should you expect? Keep reading and learn more about this unique system below.
What You Need to Know About 2-Bin Kanban Systems
This system is a very efficient way to deliver supplies and items.
The Effectiveness of Kanban Systems in Managing Healthcare Inventory
Managing inventory in ahealthcare setting presents adistinct set of challenges. Being acomplex environment, hospitals require ameticulous system to ensure that supplies are delivered as needed—and on time. Adelay or oversight can lead to an adverse ripple effect on the overall delivery of healthcare services. This calls for an efficient inventory management system like the Kanban system, which effectively addresses these challenges.
If a hospital doesn't have basic supplies like syringes and bandages, patients potentially won't get the treatment they need. Items also get lost and damaged in warehouses all the time, thus elevating the cost of obtaining and holding supplies.
In a statistical context, according to the Healthcare Financial Management Association (HFMA), an astounding 25 to 40 percent of a hospital's operating budget can get engulfed in the chaos of poorly managed supplies, thereby catalyzing financial strain.HCFMA, 2020
Items also get lost and damaged in warehouses all the time. This increases the cost of obtaining and holding supplies.
This also messes with supply chain management. Items would arrive at the wrong time, they might arrive at the wrong locations, and some might never arrive at all. But a Kanban system can fix these problems.
How 2-Bin Kanban Works
A Kanban system operates as a profoundly intuitive visual replenishment system. It capitalizes on visual cues to steer the flow of supplies and resources within any operation. Set within a healthcare context, the effectiveness of this system may exponentially increase, honing both overall efficiency and cost-effectiveness. Humans are very visually driven creatures, and having visual stimuli to guide us can make many tasks much easier. This is very true in the realm of hospital warehouse management and supply chain management.
These visual signals make it much easier to keep track of various supplies and materials. You can track where the supplies go, what stage of the production process they're in, and so on. This reduces the risk of items getting lost at any point during the production or shipping process.
It also makes reorganizing supplies in warehouses much more efficient. This system also makes it easier to ensure the supplies get to the right location at the right time. Saving hours or even days over the course of a year.
The Details
The most important goal is ensuring that hospitals get supplies when needed. This ensures that patients get the treatment they need to survive and get better.
While traditional inventory management systems face significant delays in response time and analysis, the Kanban system, being inherently visual and instantaneously reactive, facilitates an immediate grasp of stock levels and requirements. It enables healthcare establishments to promptly identify and address issues such as stock depletion, thereby minimizing the risks associated with unexpected stockouts. Furthermore, by providing real-time visibility into inventory levels, a Kanban system facilitates informed decision-making, streamlining the management of supply chain processes and ultimately leading to significant savings in time and financial resources.
You can watch these items every step of the way. This will simplify the healthcare management system in countless ways. There will be no need to overcompensate for weak parts of the system.
There will also not be any need to have uncertain or vague parts of the system. Everything is clear and collected when you use a 2-bin Kanban system. These immediate results also provide a more tangible feeling of accomplishment and progress.
This makes the job more enjoyable and keeps workers motivated. A Kanban system provides plenty of growth opportunities, too. Since this system does most of the heavy lifting, you can use your time for other important tasks.
This further improves the supply system and makes the whole job more efficient. It is also easier to stay more engaged since you won't be doing the same thing again.
How Kanban Systems Reduce the Inventory Holding Cost
The goal of every Kanban system is to ensure that hospitals have the supplies they need when needed.
Healthcare environments can often be unpredictable. But Kanban systems help account for that unpredictability.
These systems make it easy to think ahead and solve problems before they happen. This ensures that supplies get to where they need to go, even when a problem arises. A Kanban system can also help you eliminate unnecessary or outdated items.
Things are always changing in healthcare, and there is no room for outdated supplies. Effective inventory management can reduce the risk of expired or obsolete supplies by 75%. Picking out these supplies manually can be a pain, but Kanban systems make it much easier. This saves inventory holding costs since old supplies won't occupy much space.
Reducing Waste
By aligning inventory levels with actual consumption, Kanban systems can systematically reduce overstocking, thus diminishing the wastage of perishable medical supplies. They also minimize non-moving or obsolete inventory that unnecessarily occupies storage space but contributes no value to patient care. Efficiently controlling waste in this manner results in significant cost savings and more effective healthcare inventory management. Inefficient inventory management can waste up to 25% of healthcare supplies.
Cutting down on waste makes it easier to refine the inventory budget. It also saves money in the form of time. The old saying is that time is money, which is very true in healthcare warehouse management.
Traditional methods require a lot of waiting and a lot of wasted time. But a Kanban system already knows where everything is supposed to go. The results are instant.
This makes it easy to cut down on time and money.
All About 2-Bin Kanban Systems
Industry reports indicate that healthcare facilities increasingly implement 2-bin Kanban systems in their inventory management practice. According to a recent survey by the Healthcare Financial Management Association (HFMA), healthcare organizations that implemented 2-bin Kanban systems saw a significant reduction in their inventory holding costs by an average of 35%. This is primarily because these systems allow for leaner inventory, reducing the need for excess stock and thereby lowering the cost associated with storage and inventory carrying. Clearly, the adoption of 2-bin Kanban systems not only results in a direct impact on reducing inventory holding costs but also enhances the overall efficiency of the supply chain, ensuring items reach the intended recipients promptly and accurately.
Many more warehouses are using them to lower the inventory holding cost. They are also great for speeding up transportation and ensuring that items get to the right locations at the right time.
Check out our Kanban options to learn more about them and how they work.