Background/Case Studies: With limited staff in both the laboratory and purchasing departments nationwide, a corporate initiative to update our standing order strategy (SOS) was implemented to reduce labor demands and in turn reduce inventory management labor costs (LC). A 1-year retrospective analysis in 2022 was performed to determine the impact of the updated SOS on standing orders (SO), one-time orders (1TO) and associated LC.
Study
Design/Methods: Our SOS was updated at all facilities in our system: 5 local hospitals (LH) and 1 reference hospital lab (RHL). Historically, SO included only red blood cell and Capture reagents. Other reagents were procured via 1TO. Inventory management included documenting available inventory, calculating 1TO volumes, placing the 1TO, and supervisor review of the order. The updated SOS required that our SO include all manufacturer reagents regularly in use, based on a 3-year usage of ABO/Rh antisera, potentiators, phenotyping sera, specialty reagents, and Capture supplies/consumables.
Results/Findings: Inventory management labor was calculated as: 3.3 minutes per reagent for documenting available inventory; 38 min for calculating 1TO including manufacture lead time, placing the 1TO, and 8 min for multiple level (4) supervisors’ approval. This equates to $33.31 per 1TO in laboratory LC. According to purchasing, the LC to issue a purchase order (PO) was $150. The updated SOS required that 12 products be added to the SO for each LH and 21 items for RHL with a combined savings of $4930 and $22,200 in PO cost. As such, annual 1TO’s for serums were reduced by 68, Capture by 87 and 1TO for RBC reagents increased (7) as we were validating a new assay. Overall 1TO’s decreased by 148 orders (Table 1). Conclusions: By implementing an updated SOS to include non-traditional items routinely in use, we were able to reduce our 1TOs by 74% (148) annually across all sites. Cost reduction included labor needed to monitor each product, labor to generate a new purchase order, time for administrative approval, freight charges and potential lot-to-lot comparison. This could be extrapolated for other facilities and sizes. An unexpected benefit was the reduced stress associated with inventory management including times of manufacturer back order. Annual assessment of testing volumes, reagent usage and an initial threshold for reagent par is required for continued savings.
Importance of research: Our study was based on a 1-year review for an updated standing order strategy to include non-traditional items/reagents. We were able to reduce our one-time orders by 74% (148) annually across all sites. Cost reduction included labor needed to monitor each product, labor to generate a new purchase order, time for administrative approval, freight charges, and potential lot-to-lot comparison. This strategy is one way to improve inventory management and drive down cost.
