When managing medical inventory, a key task is to decide what items should be in stock and in what amount. The cheapest? The most effective? What about specialty items used for high-margin services? The criteria set changes depending on who you ask, even within the same organization.
One study examines the usefulness of the “ABC-VED matrix,” where ABC focuses on cost impact, and VED is concerned with criticality (Gupta et al.). Combining these two criteria sets provides a grid that can help decision-makers prioritize the materials that are most appropriate for a medical practice or facility. The study found that the ABC-VED system helped a healthcare facility both control expenses and more effectively provide the prioritized items.
The ABCs and VEDs of Managing Medical Inventory
It seems this approach has many advantages for managing medical inventory. First, applying a matrix allows for flexibility, since the matrix can be recalculated for different locations based on the needs and usage patterns in that market. Moreover, ABC-VED grid analysis provides specific and quantifiable support for item selection and helps decisions move beyond the pressures of crisis management and simplistic review. It also has the advantage of factoring cost impact into the choice, an important element in today’s increasingly cost-pressured healthcare environment.
Ultimately a key lesson from this study is that medical inventories contain multi-dimensional items, and effective decision-making needs to incorporate all those dimensions. It seems that a holistic approach to managing medical inventory can do much to help a medical office succeed both from a cost as well as patient care perspective.
Source: R Gupta, KK Gupta, (Retd), BR Jain, (Retd), and RK Garg. “ABC and VED Analysis in Medical Stores Inventory Control”. Med J Armed Forces India. 2007 Oct; 63(4): 325–327. Accessed January 10, 2018.