Archive for November, 2011

11/08 2011

Problem of product waste

I’ve been seeing products expiring on shelves at a rate of 5-10% (percentage of current inventory value on shelves) per month. This rate applies to a number of specialty procedure departments, such as Cath lab, EP lab, IR, as well as the OR. The underlying causes of expirations typically include an oversized inventory, a large percentage of unused products, unadjusted par levels, or the lack of par levels-based purchasing in line with actual consumption trends. Clinical departments typically do their own product ordering and management, so they tend to over-order in order to ensure product availability at all times.

With consignment programs, you have to be careful because sometimes it means that manufacturers will place “two of each” on a department’s shelves, for a total of, say, 50 SKUs. Of those, the department will only use 10 SKUs on a regular basis – the others will likely expire or become a burden to manage, and just take up premium space. Expirations for consigned stock are a financial loss to the manufacturer, but still a potential clinical liability and risk for the hospital, so really a lose-lose situation.