Dispelling 5 Myths About Kanban in Hospital Inventory Management

Kanban in hospitals: myth versus reality

October 5, 2023

By Steve Thompson, Director Supply Chain Solutions, Owens & Minor

One of the most affordable and easiest methods for effective management of consumable healthcare supplies is 2-bin kanban. Although this method offers many benefits over other supply inventory management methodologies, 2-bin kanban use in hospitals remains limited.

Here are five common myths about kanban in medical/surgical supply management and the reality experienced by healthcare organizations today.

Myth #1: 2-bin kanban is an expensive solution for supply management

Hospitals across the country are scrutinizing expenses to lower their operating costs. But overlooking 2-bin kanban in the belief that it is too costly can mean that they’re missing out on an inexpensive solution to their supply challenges.

The equipment investment for 2-bin kanban is minimal: racks and bins. Because it is a scalable solution, a hospital can establish a deployment strategy that best meets its budget and goals.

While one hospital might choose to deploy 2-bin kanban one department at a time, perhaps starting in an area where supply management is most challenging (e.g., perioperative, cath lab), another might roll it out across all departments and storage areas simultaneously.

Myth #2: Kanban requires extensive staff resources to implement

2-bin kanban is standardized in its approach and simple in its setup and use. Supplies are stored in two separate bins on a rack, one behind the other. Clinicians take items from the front bin until it is empty, put the empty bin on top of the rack, and pull the back bin forward, providing access to this secondary stock of items. The empty bins on top of the rack serve as a visual signal to the materials management team that those items require replenishment.

When 2-bin kanban is a component of a cloud-based inventory management solution, a simple scan of a bin’s barcode triggers replenishment in the materials management information system (MMIS). The solution’s software algorithms and analytics automatically modify bin quantity as demand changes to drive further process efficiency and supply level accuracy.

Myth #3: Kanban requires too much space or storage

The 2-bin Kanban approach is flexible. From a small hospital to a large IDN, a healthcare organization can implement racks and bins to meet its specific supply management needs.

The bins come in different shapes and sizes to accommodate a broad range of consumable supplies (e.g., tubing, syringes, adhesives). A hospital can select a custom configuration to maximize its existing storage space and better organize supplies so clinicians can find them more easily. In some cases, a facility can gain up to 90% more space in its existing storage areas using 2-bin Kanban racks and trays.

Myth #4: There are few, if any, benefits from using Kanban

There is a common belief that most approaches to supply management in clinical departments are more work than they are worth (e.g., PAR levels). However, 2-bin kanban offers more benefits than many other inventory management methodologies in healthcare facilities today.

It saves time: Use of 2-bin kanban standardizes and streamlines supply management workflows. A quick glance at a rack or scan of a bin barcode informs item replenishment. No daily supply counts required. Healthcare facilities report a greater than 60% reduction in “touches” from materials management when using 2-bin kanban versus PAR level processes.

It reduces inventory: With consumables well organized and visible to both the clinical and materials management teams, there is less risk for overordering and excess items crowding the shelves.

It supports patient care: Clinicians can more easily find the items they need, and items are more likely to be there when they need them. The first in/first out (FIFO) approach of 2-bin kanban facilitates lot control and reduces the risk that expired items are used in care delivery.

It’s easy to maintain: Most inventory management practices use stationary bins that rarely (if ever) get cleaned. With 2-bin kanban, a simple alcohol wipe can be used to disinfect empty bins. If a bin gets damaged, a facility can simply swap it out for a new one.

Myth #5: Kanban would require me to change how I manage consumables today

With over half (59%) of Perioperative leaders reporting their current working environment as “stressful” or “extremely stressful,” and more than three-quarters (77%) saying their workloads have grown “more” or “a lot more” since the pandemic began, there is a reluctance to rock the boat with unnecessary change.

A 2-bin kanban solution can be deployed alongside existing supply management workflows and technology solutions. When 2-bin kanban is part of an automated inventory management solution with enterprise resource planning (ERP) system integration, the hospital can automate item replenishment. A scan of a bin’s barcode label triggers re-ordering of the product in the ERP at a pre-set quantity.

Perhaps it is more important to note that a change from PAR level inventory management to 2-bin kanban is an easy transition that can drive significant improvements. Managing supplies via PAR levels is extremely inefficient, time-consuming, and labor intensive. It requires physical, daily item counts across all storage locations, and clinicians often get burdened with this task.
As previously mentioned, a 2-bin kanban approach enables materials management to quickly identify only those items that need replenishment and standardizes work processes so anyone can cover any department with ease.

When 2-bin kanban is deployed as part of an automated inventory management solution with MMIS system integration, the supply management and replenishment process is even faster and easier. Good control software identifies bins that require more or less product based upon utilization rates to ensure products never stock out at point of care.

In today’s healthcare environment of low staffing levels, high labor costs, and ongoing supply chain disruptions, it is critical for hospitals to ensure supplies are available for patient care in a way that doesn’t burden clinicians. The 2-bin kanban supply management methodology for consumables meets this need with its low price tag, simplicity, flexibility, efficiency, and reliability.

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