When it comes to hospital inventory, sometimes more is just more

More inventory is not necessarily better. Effectively managing supply chain or inventory within a hospital or health system can have a significant impact on that organization’s financial success and on staff workflows and satisfaction. Consider the following:

  • Supply chain is currently the second biggest expense for hospitals, behind salaries and labor expenses.
  • Keeping shelves stocked accounts for roughly 30 percent of hospital operations, and costs continue to grow.
  • The Association for Healthcare Resources and Materials Management (AHRMM) estimates that supply costs will surpass labor costs by 2020 as the leading hospital expense.
  • Navigant has estimated that hospitals spend about $10 million more than necessary each year on supply chain.


Those are significant numbers, yet many hospitals manage their inventory with systems and technology that is ill suited to the job. They use ERP systems that are effective at procuring supplies but less useful when it comes to tracking items as they move through the hospital to the patient. Order quantities and timing are often based on intuition and best guesses, which leaves a hospital’s inventory — and ultimately, its patients — vulnerable to the data divide that can occur between supply chain staff who stock the shelves and clinicians who use supplies with patients.


The result is waste, to the tune of $765 billion each year nationwide. But that doesn’t have to be the case, and the solution doesn’t have to be complicated. We spent three busy days this week at AHRMM18 helping hospital administrators assess their current inventory practices and explaining how real-time, actionable data and analytics can help hospitals make the transition from simple procurement to true inventory management.


With so much money involved, even small improvements can mean big savings. And as spending on supplies grows, those changes will become even more important. Contact us to learn about JumpStock from Jump Technologies and see how we can help you cure inventory management, improve hospital workflows, and save money.

Read more about hospital inventory management in this Modern Healthcare article, and about our recent endorsement by the Texas Hospital Association Board.