How a Kanban System Can Revolutionize Your Healthcare Inventory Practices
Doctors, nurses, and healthcare professionals deal with numerous supplies throughout the day, from IV drips to bandages, scalpels, diapers, and more. In an emergency, they can’t afford to discover that critical supplies are missing, and they certainly can’t wait around for a restocking.
An efficient and reliable healthcare inventory system is crucial to a well-functioning hospital or healthcare organization, and one option that continues to grow in popularity is Kanban inventory systems.
But what is Kanban, and how can Kanban inventory bins help your hospital run better? Let’s discuss its origins and its perks.
What Is a Kanban Bins Inventory System?
The concept of Kanban first originated in Japanese grocery stores, where keeping the right items in stock could make the difference between success and failure. The original systems included signage to direct customers to the products they wanted. The word “Kanban” actually means “visual sign” or “card.” The concept took off in the 1940s when Toyota adapted the principles of Kanban to create their LEAN manufacturing process.
In a nutshell, a Kanban inventory system aligns inventory level with actual consumption rather than stocking items and then expecting them to sell. For example, in a grocery store, the barcodes on each item are scanned, sending a signal to indicate immediately when an item needs to be restocked. In simpler terms, as items or hospital supplies are being consumed at the from of the shelf, supplies are also being restocked. This system ensures timely replenishment of the hospital supplies.
How Does a Kanban System Work in Healthcare?
Grocery stores and hospitals aren’t the same things, so how can healthcare facilities benefit from Kanban shelving? Many types of companies can adapt the Kanban system, including hospitals and healthcare facilities. This is usually done using a two-bin system.
Each bin contains the same items; they are typically placed together on a shelf (either side by side or front to back). During a workday, nurses and other staff take items from Bin A. When Bin A is empty, Bin B is pulled forward, and a signal is sent to restock Bin A.
When the Kanban system is working properly, it can prevent nurses from running out of stock.
What Are the Benefits of Kanban Bins in Healthcare?
Many healthcare facilities are still using the PAR system, which requires a staff member to scan or count all supplies to determine what needs replenishing (or brought back up to par). The staff member must then make a trip to replenish the supplies.
Here are some ways that the Kanban shelving system is an improvement on the PAR system.
1. Saves on Labor Costs
Using a fixed quantity of supplies and dedicated Kanban bins eliminates the need for daily inventory counting. Once Bin A is emptied, the same quantity is replenished. Since no one is wasting time counting, your facility saves on labor costs, and your staff is more productive in other areas.
2. Reduces Re-Supply Trips
Once you establish your Kanban system, you will quickly be able to accurately estimate how many supplies you need for an entire day (or another period), lowering the number of times staff members need to re-supply the bins.
3. No Dangerous Stock-Outs
Stock-outs aren’t just inconvenient and time-wasting; they can slow down necessary treatment and care in a hospital setting. Because Kanban uses a two-bin system for stocking supplies, there are always medical products on hand, eliminating stock-outs.
4. Reduces Expired Medical Products
The Kanban shelving system promotes first-in, first-out usage of supplies, so no item is left on the shelf too long. This reduces the dangers and costs associated with expired medical products.
5. Shows Important Usage Patterns
Over time, the Kanban system will show patterns such as which medical products are used most often. This allows you to better manage your inventory level. You can easily adjust quantities based on their usage patterns.
6. Improves Medical Supply Inventory Management
Most PAR-level inventory management involves eyeballing the number of items needed; counting is almost impossible and very labor-intensive. With a Kanban system in healthcare, you automate this process to promote better inventory management and take out any guesswork.
How to Set Up a Kanban Bins Inventory System in Your Healthcare Facility
A Kanban shelving system includes many benefits, but one of the best might be the fact that it’s easy to set up. You’ll need to put in some work to physically set up your Kanban bins and then collect the usage data to decide the right inventory levels you need for each item. You’ll also need to decide the right “trigger” to use to alert your materials manager when a bin needs to be supplied. However, after the system is up and running, it is primarily passive, saving your employees valuable time and effort.
Here are two popular ways of setting up Kanban in healthcare.
Small Applications: Barcode System and Empty Bins
One option is to use a barcode system in combination with placing the empty Kanban bins on the top of your storage shelving. The materials manager can use a barcode reader to scan each of the empty bins and record the data for which supplies need restocking.
This system works well in smaller healthcare facilities or if you are only going to implement Kanban in one or two supply rooms. But it may not be the best option in a large facility or multiple supply rooms because material managers will still spend a lot of time counting. In addition, all the empty bins from fast-moving supplies can become cumbersome and create errors in replenishment.
Larger Applications: Use RFID Technology to Automate the “Trigger” Process
The second option is to automate the “trigger” process with RFID technology. This Kanban inventory system is equipped with an RFID digital restocking tag.
Once the primary bin items are used, a worker clicks the button on the restocking tag. While the nurses are waiting for supplies to be restocked, they pull items from the secondary bin. A notification is automatically sent to the materials managers about the products that need restocking (i.e., quantity and location).
Essentially, the RFID technology or the RFID Kanban system replaces steps in the counting process, saving valuable time while real-time information improves accuracy.
Does a Kanban Bins System in Healthcare Actually Work?
The answer is yes, and we’ve seen plenty of examples of Kanban in healthcare using our products. In fact, a hospital recently used Spacesaver’s FrameWRX and StockBox products to switch one supply room from a PAR inventory system to a Kanban inventory system.
Within two months of the change, the hospital was able to reduce its inventory from around 3,600 items to 1,900 items and save an hour and a half every single day in time that used to be spent counting inventory! The inventory savings plus the time savings from busy nurses and supply clerks saved a conservatively estimated $10,000 per year. And that was just one supply room cabinet.
Ready To Switch to a Kanban Bins Inventory System?
At Southwest Solutions, we believe that good inventory management and materials management are at the heart of every well-run hospital. That’s why we love helping healthcare facilities upgrade their medical supply inventory management. Contact us today – we’d be happy to recommend shelving, bins, and RFID solutions for your Kanban shelving system. Our talented design team and installation teams will also make sure your system gets up and running smoothly.