5 Steps to Better Healthcare Inventory Management and Patient Outcomes

Tetiana Prokofieva
Yevheniia Sydorova
Daria Iaskova

Medical inventory is a crucial component of healthcare supply chain management, an area that accounts for more than 37% of the total patient care costs. While transportation and logistics supply chains are responsible for getting products to consumers, in healthcare they play a key role in hospitals delivering quality and timely medical care to patients in need.

Developing custom software for inventory management in healthcare industry is a way to actionably address specific procurement and supply chain management challenges that exist in large hospitals and medical facilities, and as a result, dramatically improve patient outcomes.

In this blog post, we’ll define five essential steps needed to transform hospital inventory management and explain why it’s crucial for your business growth.

What is inventory management in healthcare industry?

Inventory management in healthcare industry embraces control over essential supply chain elements and impacts medical facilities’ internal processes. It’s a critical area for large hospital systems, where a number of healthcare facilities with their own inventories and workflows need to be controlled. 

Why is hospital inventory management important?

Being an essential part of healthcare operations, inventory management ensures the availability of critical medical supplies, preventing disruptions in patient care and treatment.

In fact, inventory management in healthcare encompasses various areas including stock storage, procurement, quality control, communication, workflows, reporting, and forecasting.


Benefits of an inventory management system in healthcare

Implementing an effective inventory management system in healthcare brings numerous advantages that directly impact both operational efficiency and patient care quality. By addressing critical areas of inventory management in healthcare industry, such as supply chain optimization, regulatory compliance, and effective resource management, hospitals and medical facilities can achieve significant improvements.

  • Cost reduction and waste minimization. Optimizes stock storage and procurement processes to lower costs and reduce wastage.
  • Enhanced quality control. Ensures supplies meet necessary standards, thereby safeguarding patient safety.
  • Improved communication. Streamlines communication for better coordination among healthcare staff.
  • Accurate reporting. Provides precise reporting to facilitate data-driven decisions.
  • Better forecasting. Improves forecasting to aid in effective planning and resource allocation.
  • Increased operational efficiency. Boosts overall operational efficiency across healthcare facilities.

Types of healthcare inventory management

In healthcare settings, managing inventory effectively is crucial to ensuring seamless operations and quality patient care. Inventory management in healthcare industry encompasses various approaches tailored to optimize supply chain efficiency and resource utilization. Let's explore some key types.

Manual hospital inventory management

Traditionally, healthcare facilities relied on manual methods like spreadsheets or paper records to track inventory levels. While simple, this method can be prone to errors and inefficiencies.

Perpetual hospital inventory management

This modern approach involves real-time monitoring of inventory levels using automated systems. It provides accurate, up-to-date information, enabling healthcare providers to make timely decisions and prevent stockouts or overstocking.

Vendor-managed inventory (VMI) management

Under this arrangement, suppliers take responsibility for managing inventory levels at healthcare facilities. They use data analytics and demand forecasts to ensure timely replenishment, reducing administrative burden and optimizing inventory turnover.

Just-in-time (JIT) inventory management

JIT ensures that inventory is delivered precisely when needed, minimizing storage costs and reducing the risk of obsolete stock. It's particularly beneficial for managing perishable or high-cost inventory medical supplies.

Consignment inventory management

Here, suppliers retain ownership of inventory until it is used by healthcare facilities. This approach helps hospitals manage cash flow and reduce financial risks associated with stocking large quantities of supplies.

RFID and barcode inventory management

Leveraging technology such as RFID tags or barcode scanning, medical facilities can automate tracking and inventory management in healthcare industry. This enhances accuracy, reduces manual errors, and improves overall efficiency.

ABC analysis for inventory management in healthcare

This method categorizes inventory items based on their value and importance. By prioritizing resources on critical items (A), while optimizing management of less critical (C) items, healthcare providers can streamline operations and ensure essential supplies and medical equipment inventory are always available.

Each type of healthcare inventory management system plays a crucial role in enhancing operational efficiency, controlling costs, and maintaining high standards of patient care. By choosing the right approach or combination of approaches, healthcare facilities can effectively navigate the complexities of supply chain management and focus more on delivering excellent healthcare services.

Hospital inventory management best practices

As a rule, the most common challenges of inventory management in healthcare that medical care providers aim to solve include:

  • consistent and timely restocking 
  • excessive utilization
  • limited data visibility
  • manual data input
  • obsolete clinical workflows
  • complicated communication with suppliers

How can healthcare facilities address these challenges, reduce process costs, and ultimately improve patient outcomes?

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Step 1. Providing a real-time view of medical storage

Limited view into medicines and equipment supplies in stock is a reason for major hospital inventory management challenges—items are either missing in critical situations or not timely used and as a result, need to be disposed of. This causes healthcare facilities both financial and reputational losses.

By building end-to-end visibility into medical inventories and getting real-time updates about consumption and expiration dates, hospitals can optimize tracking and inventory management in healthcare industry and prevent losses. 

  • Inventory listsP
    rovide visibility into items by category and status and allow to get detailed information about medicines and medical equipment. 
  • Stock overview
    Allows healthcare staff to get a unified picture of stock supplies by departments, storerooms, and warehouses.
  • Usage tracking
    Functionality helps procurement specialists monitor the consumption of medicines and basic medical supplies like masks and cotton swabs, and timely replenish the stock.
  • Customized alerts
    Allow inventory managers to get real-time updates about items that are low in stock or will soon expire.

Step 2. Leveraging a data-driven approach to consumption and restocking

Consistent hospital inventory management and tracking allows healthcare organizations to generate insights into the usage of medical supplies and build procurement assumptions based on statistical data. 

Depending on the goals a medical facility plans to achieve, collected data can help tackle excessive utilization, control costs distribution, or act as a base for advanced demand forecasting solutions.

Data analytics reinvents inventory management in healthcare industry. Represented with a set of custom dashboards and reports, it offers healthcare executives a reliable data source that can be used to decrease maintenance costs and optimize procurement processes.

  • Quantity change analytics
    Provides procurement specialists with a full picture of the number of items used within a specified time period and makes an essential part of inventory management in healthcare.
  • Reporting low-in-stock items
    Helps to keep track of critical item quantities and define the best restock frequency, optimal amounts to be ordered, and set minimum inventory levels.
  • Cost distribution reports
    Provide business executives with a detailed view of costs spent on inventory items and utilization, allowing them to compare planned vs actual spending and plan future inventory budgets. 
  • Activity monitoring
    Represents a list of activities by specific warehouse, facility, or department. It allows for tracing typical actions performed by inventory workers and nursing staff within a specific time period and using this information to optimize operations and workflows.

Step 3. Streamlining communication with suppliers

Order management makes a huge part in healthcare supply chain success. However, most modern inventory management software for hospitals still doesn’t have the functionality needed to automate order placement and tracking.

Although enterprise healthcare providers usually go for bulk purchasing contracts, a procurement specialist still has a lot of work to make sure a healthcare facility will timely get the necessary supplies. Finding the right distributor, checking if the necessary amount is available, agreeing on delivery times, placing an order, and monitoring its fulfillment. If anything goes wrong, it often takes hours to communicate with other vendors, re-order the necessary items, and adjust the prices (obviously not in your favor).

Introducing a built-in module with order management functionality is a way to connect procurement specialists and suppliers within software for inventory management in healthcare industry.

A digital vendor list

Contains essential data about existing vendors and allows for adding new entities. Using smart filters inventory managers can quickly decide on the best options by viewing item availability in specific regions or desired delivery terms.

Viewing order details

Allows procurement staff to easily access information about each order placed, view expected delivery dates, adjust amounts, and apply changes.

Order status monitoring

Provides a real-time view of all orders, wherever they are saved as drafts, confirmed by suppliers, or fulfilled.

Automatic order placement

Allows inventory managers to access order data and set minimum inventory levels that will automatically place orders for items (before they appear low in stock).

Step 4. Optimizing healthcare facility workflows

Like any other conventional industry, healthcare undergoes digital transformation. Among the numerous challenges that exist for organizations, obsolete processes, and low digital dexterity play a key role in technology adoption. To embrace innovation and focus on quality customer care, medical facilities require a change from the inside. 

Reimagining facility workflows and leveraging intelligent automation to replace time-consuming manual processes will help decrease businesses’ operational costs and unleash hospital staff’s time for quality medical care, improving patient outcomes and reinventing inventory management in healthcare industry.

  • Assigning barcodes and RFID tags
    And scanning them using a mobile camera or dedicated device allows hospital staff to automatically update information about medical supplies or request a restock without manually inputting numbers and names.
  • Improving communication
    Between hospital staff and admin teams to make sure the former has easy access to inventory data, can easily request necessary medications, and get timely updates on healthcare supplies available in stock.
  • Moving away from spreadsheets and paper records
    To minimize human errors, standardize data formats, and ensure essential inventory data is always at hand for executives and stakeholders.

Step 5. Building inventory process integrity

Aiming to provide quality patient care, healthcare organizations often try to address each inventory management issue in healthcare supply chains individually, while in reality, none of the components works in isolation. The only way to tackle challenges related to inventory management in healthcare and improve patient outcomes is to build integrity into inventory processes and workflows.

So, how do you establish a single point of connection for all your facilities, departments, and employees and build seamless inventory management processes?

  • Make cloud enablement a part of hospital inventory management transformation. Provide easy access to information whenever your teams need it, receive more space for online collaboration, and consider integrations with mobile billing and invoicing systems to streamline procurement processes.
  • Integrate order management functionality and leverage reporting and analytics tools. To save your teams’ time by keeping them updated about the real situation in medical storerooms; prevent critical situations related to stockouts, and decrease costs spent on utilization.
  • Replace cumbersome tools, modules, and programs for supply management with custom inventory management software for healthcare facilities. Transform inventory workflows by digitizing records and bringing in assets for online collaboration, help employees overcome digital friction, and let them focus on what matters most—patient care.

Start your healthcare transformation journey with Trinetix!

Inventory management in healthcare industry goes hand in hand with the provision of quality medical services. As long as your hospital staff is busy updating information about medications used and procurement specialists spend hours on placing orders, your patients are at risk.

The implementation of an end-to-end approach to inventory tracking and automation of routine facility workflows can bring your business to the next level.

This blog post is inspired by the story of healthcare inventory management transformation made in cooperation with Trinetix.

Optimized layout of hospital inventory management for reduced inventory costs and improve efficiency?
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For 12 years of digital partnerships, our team has designed and fulfilled hundreds of bright product concepts in accounting, logistics, finance, healthcare, and beyond. If you aim to find better ways of managing hospital inventories and unleash extra hours for quality patient care— let’s chat about your next steps to effective inventory management in healthcare.


Inventory control in healthcare facilities is crucial for ensuring that essential medical supplies are always available, which directly impacts patient care quality. Effective inventory control in healthcare also helps minimize costs and reduce waste, making operations more efficient.
The main inventory management issues in healthcare supply chains include stockouts, overstocking, and expired inventory. These problems can lead to increased costs and disruptions in patient care, highlighting the importance of inventory management in healthcare and the need for robust inventory management hospital practices.
Effective hospital inventory management best practices include implementing automated tracking systems, using Just-in-Time (JIT) inventory methods, and conducting regular audits. These practices help optimize inventory management in hospitals, ensuring timely availability and reducing waste.
Hospital inventory management systems can solve issues such as inaccurate inventory counts, inefficient stock rotation, and supply chain disruptions. By improving inventory control in healthcare facilities, these systems ensure better resource utilization and enhance patient care.
Trinetix offers advanced solutions for medical supply inventory management, including automated tracking and data analytics. These tools optimize inventory management in healthcare industry, ensuring accurate inventory levels and efficient supply chain operations.
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