PAR Inventory Management Best Practices

It is no secret that healthcare supply chain costs continue to rise while hospital profits fall. Materials costs are poised to eclipse labor next year. Supply Chain and Materials Management departments must find a way to reduce costs while still maintaining PAR levels for exceptional patient care. Let’s examine a few PAR inventory management best practices.

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Setting Up Your PAR Inventory

The first step in getting a handle on material costs is knowing how much inventory you have on hand and where it is located. Disorganization of PAR locations, PAR items and the storeroom can lead to lost revenue and productivity. A few strategies to approach this:

Set up specific PAR Locations

PAR locations, which typically have a high turnover rate and need to be regularly replenished, should be defined anywhere your inventory is stored. This can be a rack of bins in a room on specific floor or individual nurse carts. The more specific you get, the better you can keep track of your inventory and expenses. 

Two-Bin System

Do you have the space to set up a two-bin system? With this system, two bins are filled to their optimal PAR level and placed together on the shelf. When a staff member takes the last item out of the front bin, they put the empty bin in a location to be replenished and move the back bin to the front.  Counting Staff scan the empty bin and a purchase order (PO) or transfer order (TO) is generated to replenish the bin and expense the inventory from the Storeroom. The empty bin is restocked and put behind the remaining bin for proper stock rotation.

Use Your Storeroom as a Warehouse

You can also reduce logistics costs by setting up storerooms that serve as a warehouse or distribution center. By storing items in-house, you can buy in bulk quantities, which often leads to better pricing. Items are only released once a department has submitted a material request (TO) and then the cost of those items is billed to the correct department using the items. This makes specific items easier to find, gives insight into which departments are heavy users of certain items, can reduce the frequency of misplaced items, and paints a picture of what is available.

Examine Usage of PAR Locations

Once you’ve defined where and how your inventory is stored, the next step is determining if you are keeping enough inventory on-hand. A common fear is that staff won’t have what they need, when they need it. This can lead to a culture of excess safety stock levels.  Are you are paying extra on rush fees or throwing away expired inventory? A few strategies to understand your usage:

Schedule Counts of Your Inventory

Start by counting your storeroom once per month, making note of expiration dates. Utilizing the FEFO method (first expiration, first out) will help to ensure items are being used before they expire.

You should also evaluate your PAR locations at least once per year. How often are items being used? Are your bins overflowing with sutures, gauze and other items that are just collecting dust?  Reduce the PAR levels on those items if they aren’t moving.
If you can’t keep an item in stock, are you aware of every location these items are being stored? Is Nurse Susie emptying the PAR location onto her cart and not leaving enough for the rest of the staff, or are you running out? If you truly don’t have enough in stock, consider increasing the PAR quantity.  

Many providers don't have the insight into which PAR locations have and haven't been counted for a given shift. With a PAR dashboard (like the one below from RF-SMART), managers can view this information in real-time, to ensure all scheduled PAR activity is completed. End users can see the Groups of PARs to be counted on their shift when they login to the mobile device.