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An inventory control and money management system that works.

An inventory control and money management system that works

There are no dazzling shortcuts to keeping track of inventory and expenditures for supplies, but the next best thing is a system that runs smoothly and saves the laboratory time and money.

That's what we have in our 300-bed hospital chemistry department. The system evolved over a period of 18 months, and we had to strain at times to get the right elements in place. As with other kinds of activities, the more effort put in at the outset, the less effort required thereafter. For example, we get automatic cues to reorder when supplies run low-- and not from a computer, although data processing plays a part elsewhere.

The principal benefits of our inventory and expenditure controls are elimination of rush supply orders and a firm grasp of spending trends, which makes it much easier to budget for our future needs and new procedures. Our system consists of five components: a card file, inventory sheets, reorder tags, a requisition book, and a microcomputer program. I'll describe each component in turn.

Card file. There's an index card for each item or related group of items that we order, listing the vendor, item number, price and the date it became effective, and the account number to which the expenditure is charged. We update the file when vendors, supplies, or prices change, or when we purchase a new instrument.

The file is arranged alphabetically. In some instances, we use familiar headings, such as 1260 (the model number of one of our analyzers) or "protein electrophoresis,' and group together all parts and supplies falling into the category. On cards for pipet tips and a number of other products, several sizes and styles are noted.

Color codes help identify general product categories quickly. Quality control products are on pink cards; reagents, white cards; instrument parts, blue cards; and disposables, yellow cards. Many items are cross-referenced. Look up "lamp,' for example, and you are instructed to "see bulb.' Because the file is logical and comprehensive, any other authorized staff member can easily order supplies when I'm out.

Inventory sheets. These forms, routinely used by bench technologists, list supplies that must be inventoried monthly or bimonthly, depending on the rate of consumption. Ten sheets in all are kept on a clipboard atop a bookshelf, and a technologist pulls the one or two sheets for his or her work station.

To begin with, there are two columns of previously entered figures--approximate monthly usage of each item, based on purchasing history, and maximum and minimum quantities that we want to carry.

The monthly usage data give us a basis for changing, say, the next month's order if we expect a heavier than usual workload. For example, we perform many more alcohol assays during the New Year's holiday period, so in December we order more of these kits than monthly usage indicates.

Entries in the monthly usage and maximum/minimum columns might change if a technologist reports that we are heavily overstocked on an item. If a check discloses that our consumption has dropped, we may scale down our average use and the levels we want in stock. This leads to fewer unnecessary orders.

Additional columns provide space for entering the amount of each item on hand as of specified inventory dates. These are filled in by the technologist. I review inventory sheets once a week. If we're running short of an item, I reorder it and record the quantity ordered just below the technologist's latest entry.

The format for the sheets varies with the area of the chemistry department. In our RIA/EIA section, for example, most reagents are on standing order. So I just attach their delivery schedule to the RIA/EIA inventory sheet.

Likewise, reagents for one of our chemistry analyzers are routinely shipped each month. To reflect this, the analyzer's inventory sheet has an extra line--"nothing needed.' That line is checked off if we have enough reagents as indicated by minimum stock tags in storage areas. An exact count of reagent supply is unnecessary unless we're below minimum.

Reorder tags. We purchased eye-catching 3 2-inch red tags that announce "Reorder This Item Now!' They are attached to replacement parts and other slowuse items, such as the spare probe assembly for the Stat/routine analyzer, detergent for the glasswarewashing area, and 10N sodium hydroxide. They are also used for items ordered in bulk quantities, such as pipet tips. The tags are placed toward the back of the shelf--on the eighth of 10 bags of pipet tips, for example. A technologist who draws a tagged item from stock places the tag on my desk as a signal to reorder.

Full staff cooperation is necessary for this aspect of the system to work. Technologists have an incentive to cooperate because the tags streamline our inventory sheets and eliminate many items from periodic counting. That makes the job of taking inventory much less tedious.

Requisition book. This consolidates paperwork on orders and deliveries. I keep a copy of each requisition in the book, marked with an advertised price or a price quoted to me. When the purchasing department sends me a copy of the purchase order (PO), I mark the PO number on the requisition in the book and verify that the purchasing department obtained the correct price from the supplier.

The book has three sections: on order, received, and standing orders. As items are delivered, they're checked off on the requisition. The receiving technologist makes certain that the shipment matches what was ordered. When we have taken delivery of all items on a requisition, I move the requisition to the received section of the book. Normally, the book contains no more tha one month's worth of requisitions. By mid-September, most of August's orders have been received.

We handle standing orders differently. For each one, an 8 5-inch index card lists the vendor, item, quantity per shipment, shipping schedule, PO number, and starting and ending dates of the order (Figure I). All are kept in the standing order section of the requisition book. The cards have columns for quantity received, date received, and the initials of the receiving technologist.

Computer program. Here we get an overview of purchasing activity. Once all items on a requisition are delivered, I enter the information into our Apple II Plus microcomputer, using file and report formats we developed with the Personal Filing System (PFS) from Software Publishing Corp., Mountain View, Calif. Items received on standing orders are entered monthly.

When I began constructing our inventory system, I wasn't computer-smart. But I knew that a microcomputer could help keep data organized, track the flow of supplies and funds, and create reports quickly. So I described what was needed to chemistry supervisor Jim Vaillancourt, who is well versed in software. He recommended PFS and was instrumental in getting it to work as well for us as it does.

We named our program Inventory /Money Management System --IMMS for short. It provides a wealth of information in several reports generated by a few keystrokes. For example, we get information on lead time (days from order to delivery); dollars spent with each supplier over six months, which facilitates negotiations for discounts; reagent and supply costs of running an assay, useful if we're considering a method change; and expenditures within account numbers (reagents, disposables, controls, and so forth), an auditing aid that helps keep the department within budget.

In addition, reports that monitor monthly expenditures enable us to predict heavy ordering periods and budget accordingly. For example, I want to be reminded when we have to order the year's supply of quality control material or printer paper. And with a data base of at least six months' expenditures, we can more accurately project how much we need in the way of supplies over the course of a year.

The information we draw out of the computer is only as good as the data we put into it. It's important to be consistent with past terminology when adding forms to the system. To that end, I compiled lists of the computer abbreviations we use for suppliers and products, chemistry tests, and instruments.

Figure II is a sample computer form. It deals with two instrument brushes ordered on Dec. 14, and lists the supplier, the analyzer, the price of the brushes, the purchase order and account numbers, and when the items were received.

Each item gets its own form. If seven items are ordered on a single requisition, seven forms are added to IMMS. The computer summarizes data on the forms for whatever reports we request.

Let's say that in January I want to find out how much the department spent on durg analyzer supplies in the last three months. I instruct the computer to pull the drug analyzer system files for those months by entering "Month: >9' and "System: TDX' on the retrieval page of the program. In a few minutes the report is printed.

The most common documents generated are labeled Monthly Report, Standing Orders Rec'd, Outstanding Orders, and Monthly Account Summary. By adding the monthly report total (Figure III) to the standing orders received total (Figure IV), I keep tabs on what we spend each month. I use the outstanding orders report to follow up on delinquent deliveries.

The monthly account summary shows exactly how much the department has spent on reagents, disposables, instrument repair, and other accounts. When placed in a year-to-date format, the summaries show at a glance how the budgeted money for our chemistry section is being spent.

This is our third fiscal year on the system, and it's still evolving. We recently added a VisiCalc electronic spreadsheet program to generate year-to-date summaries more quickly.

I'm confident that our inventory control and money management system can work in any laboratory, with modifications to suit each situation. In fact, once our laboratory's director saw how useful it was in the chemistry section, she extended it to all other sections of the lab.

Table: Figure I A page from the requisition book

Table: Figure II A computer file for one requisition

In the lab's fiscal year coding system, month number 10 is December. PO stands for purchase order, and the chemistry section account code, 6470, is for instrument parts.

Table: Figure III Monthly purchases listed by test system

Table: Figure IV Summary of standing-order deliveries
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Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Author:Manus, Connie
Publication:Medical Laboratory Observer
Date:Dec 1, 1984
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