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PAR vs. Kanban Inventory Storage & Management Methodologiespar vs kanban medical supply storage management methods

For several years, the healthcare industry has been comparing PAR and Kanban methodologies for storing and managing inventory. Various parties including hospitals, medical supply vendors, logistics organizations, and healthcare consultants are involved in the debate because managing supplies and medication amount to billions of dollars a year. These comparisons between PAR and Kanban include efficiency, accuracy, compliance levels, and savings.

One question that is frequently asked is, “Can hospitals experience a one-time 30% or 40% inventory reduction by moving from PAR to Kanban? And if so, how quickly can this reduction occur – over one year, several months, or right from the first couple of weeks?”

The goal is to confirm there is a one-time inventory reduction when managing low cost medical supplies with Kanban from a mathematical perspective.

Why Kanban Leads to an Inventory Reduction

Two supply rooms were compared, with identical items and identical daily consumption actions. PAR required more frequent refill visits, Kanban required less refill visits. In neither method was the hospital ‘out-of-stock’.

kanban vs par graph for one-time inventory reduction

1. The PAR graph demonstrates that inventory levels move around the par levels, given the tendency to re-fill ‘up-to-par’.
2. Given the manual PAR level counting method - ‘eyeballing’, inventory is normally higher than the maximum quantity set.
3. Kanban inventory levels increase only when the primary bin is empty; therefore, inventory is always lower than the maximum quantity set.
4. A 33% reduction is demonstrated comparing the PAR vs. Kanbanrfid restock tag for kanban medical supply management

Distinctive, mathematical results prove how and why the reduction occurs, at a minimum of 30%.  Over a one month period, there was a clear, visible one-time inventory reduction. Also, by extending the graph to a longer period of time (several months), higher one-time inventory reduction can be achieved – even up to 40%.  

Switch to Kanban Today to Store & Manage Medical Supplies

Southwest Solutions Group® provides healthcare facilities the storage systems and technology used in Kanban. To learn more about what we can do to help your facility transition from PAR to Kanban, give us a call or send us a message.

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