Beyond the Use of Robotics: Operations and Supply Chain Control for Effective Inventory Management in a Health System Pharmacy

  • Maari L. Loy
  • Rodney D. Traub
  • Limin Zhang
  • Pratap Kotala
  • Monte Roemmich
  • Jesse Breidenbach
  • Robert Nelson
Part of the Annals of Information Systems book series (AOIS, volume 19)

Abstract

This study describes a process improvement initiative conducted at Sanford Health Medical Center—Fargo an academic tertiary hospital that recently implemented an inventory management system. The objective of this project is to identify opportunities for improvement in inventory management and use of various drug dispensing technologies. Data was collected from wholesaler purchases, patient charge histories, as well as reporting from a robot, carousel system, and automated dispensing cabinets. Ultimately, the initiative uses supply chain management techniques to identify and implement appropriate inventory levels through utilization of a periodic inventory system. This reveals inventory cost history, cost upon initiation of automation, and forecasted costs with appropriate inventory levels upon implementation. The primary outcome upon implementation showed a 25.96 % decrease in cycle stock. Secondary outcomes included an increase frequency of drug being ordered (116.7 orders/week vs. 200 orders/week for top 100 drugs), supporting evidence showing 0.95 % of drugs have a weekend rate greater than one unit larger than the weekday rate and a decrease in whole orders sent to the wholesaler from 5/week to 4/week.

This study provides critical insight and practical guidelines to improve operational efficiency and cost effectiveness in a health system pharmacy. Such improvement efforts are becoming common as companies work to improve their operational efficiencies (Interfaces, 41(1):66–78, 2011).

Keywords

Pharmacy operations Continuous inventory system Periodic inventory system Pharmacy automation Operational efficiency 

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Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  • Maari L. Loy
    • 1
  • Rodney D. Traub
    • 2
  • Limin Zhang
    • 2
  • Pratap Kotala
    • 3
  • Monte Roemmich
    • 1
  • Jesse Breidenbach
    • 1
  • Robert Nelson
    • 1
  1. 1.Sanford Health Medical Center FargoFargoUSA
  2. 2.College of Business, North Dakota State UniversityFargoUSA
  3. 3.College of Science and Mathematics, North Dakota State UniversityFargoUSA

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