Stock consumption must be evaluated through timely analysis for healthy inventory management. Since stock is a dependent factor for lab testing, managing it through tracking can help you plan your inventory and its cost smoothly. However, tracking is highly dependent on the system you use.
Most of the labs use ERP systems to manage inventory. However, for effective management let’s walk through different systems and understand how they show varied results for the same scenario. By doing so you can understand which system can offer business success in the long run.
The above image interprets two scenarios of stock consumption of your inventory.
In the first graph, you can see consumption details on the 10th day after the stock is completely utilised/used, whereas, in the second graph, you can see the consumption of the stock in real-time. With a consumption trend for each day of stock usage, you can avail a wide range of advantages for the diagnostics business.
To understand how to let's take an example of reagent usage - say 200 ml. bottle.
If you are using an ERP, tally, excel or manually recording stock updates regularly, then for this bottle, the stock consumption will be recorded only after the bottle is fully consumed. Say after 10 days. This makes the data insufficient to know the actual consumption of the stock every day.
On that note, an inventory software with automatic stock consumption will get stock details on every time consumption through the graph. It maps the required amount & quantity of the stock to each test; thus showing you the actual consumption of the stock from time to time.
Before we understand the advantages of using such statistical data, know what are the problems that such data can solve for your laboratory business.
What problems does it solve?
Compared to an ERP system, Inventory Management System with real-time consumption analytics solves the following problems -
Problem 1: Consumption metrics calculated or visible only after the stock is over
Problem 2: Inventory stock mismanagement leading to wastage
Problem 3: Inaccurate forecasting of future stock requirements
Further, let’s know the advantages of each and then turn towards the benefits of these analytics to know which is more efficient and contributes to your diagnostic centre.
1. Actual consumption rather than pseudo consumption
Noting actual consumption rather can help you know how stock consumption for performed tests works. This can be helpful to manage current stocks and plan ahead better. Monitoring this in the pseudo consumption through ERP systems is complex since it only shows a final number rather than everyday trends.
2. Increases productivity
With improved stock management, you can effectively handle every task at inventory management. This gives you more time and bandwidth to optimise inventory activities rather than investing time on entry work. Meanwhile, you will be more focused on actual inventory challenges than being busy in data management. This will increase the productivity of staff and inventory managers in handling the entire system better.
3. Assists in Projecting Stock Purchases/Requirements
When you are aware of the actual consumption, it is easier to project accurate monthly orders for future requirements and costs. A clear picture of the daily usage trends is useful to forecast the future requirements for normal testing numbers as well as for days that experience increased or decreased volume of tests.
4. Indicates about Gaps between Device Consumption
Automatic stock consumption provides enough data to check anomalies at testing like improper machine consumption. If the real-time analytics for a given test indicates more consumption, it shows that the analysers or machine is consuming more quantity of stock than required. In real-time analytics, you can easily view how for a given test the machine is consuming more quantity than required. If consumption is as per expectations it means there is a control over your inventory consumption.
How does it help you in your Lab Business?
Now that we have learned the problem-solving advantages of actual consumption learning of the inventory, let’s understand why we need it for long term lab management.
Learning actual consumption can -
- Help you plan and optimise inventory cost
- Reduce wastage by making sure you are not over-ordering
- Assist you in making informed decisions to reduce the gap between actual consumption and device consumption
- Enhance overall productivity for staff, management and lab
- Save business costs by preventing under/over stocker situation at ordering