The best inventory control software will keep a steady state of inventory on hand and boost overall efficiency.

We all know inventory management becomes more and more important as a business grows in volume of orders and complexity of client needs. Many times finding product and getting it to a patient in a timely manner is easier said than done. It's important to understand the mechanics of inventory management and a few fundamentals about this time-consuming yet customer- and profit-centric process.

The first reason we maintain inventory is to address "time lags" in the supply chain. Delays in shipping from supplier to user require us to maintain inventory to avoid delays in meeting patient needs.

Second, the uncertainty of demand requires us to maintain certain levels of inventory to meet the ebb and flow of business variables such as supply, consumer demand, and movement of goods that can be unpredictable—so we accommodate by maintaining inventory.

Finally, just in time (JIT) inventory management can be costly in terms of logistics and patient satisfaction (or dissatisfaction when we miss or delay product delivery), so buying and maintaining bulk volumes of supply helps avoid delays. Given the above factors, how have today's software developers addressed these issues to help you maintain patient satisfaction, manage the uncertainty of supply and demand, and reduce the risk associated with JIT inventory management?

ORDER PROCESSING MANAGEMENT

Does your staff understand how to manage each type of equipment in your inventory? Today, most applications should have the capacity to instruct or provide detailed information to the end user on the processing and documentation requirements for each inventory item. For example, QS1's HME software application provides separate Medicare, Medicaid, and third-party carrier fields with the ability to establish HCPCS code for each—which helps the person filling the order (user) determine whether a product is covered, if a prior authorization is required, or if a CMN is required. QS1 software also notifies the user which DMEPOS fee category a product falls into.

Another key function of the application is the ability to scan documents to inventory records, including information such as CMN guidelines, DME Medicare Administrative Contractor coverage criteria, instructions on how to use the item, physician order guidelines, a picture of the item, and other relevant documentation as required. The ability to print these items on demand is a plus.

The above two solutions help the user secure each order (make sure all documentation requirements are met) and ensure timely reimbursement. Being denied by a payor because of missed steps during order processing can be costly. In a busy operation, or one with limited resources, managing your denials in an untimely manner can result in lost revenue. Getting it right the first time saves time and money.

USER-FRIENDLY LOOKUP CAPABILITY

Intake and care coordinators need the ability to quickly look up items in multiple ways by:

• item code, item description (first word), or description (any word in the description);
• UPC/GTIN bar code;
• HCPCS code;
• manufacturer; or
• vendor, vendor SKU, serial number, or location.

Codi Cruse, Med "B" department manager at AmPharm Inc in Parsons, Tenn, uses MedAct for managing her operation. The software enables her to track the transaction history of a particular item in several ways. Cruse explains that when complying with new guidelines associated with accreditation, she has "the ability to track every patient who ever had a particular piece of equipment at any given time."

It is important for software vendors to keep sight of what makes a system easy to use. When it comes to the management of inventory, a simple user interface allows staff to quickly identify the items they are searching for. In software such as QS1, the programmers allow the end user to add notes to the inventory record and enhance the item's description, thus enabling faster searches and less confusion among particular inventory items.

SERIALIZED TRACKING

The ability to look up serialized items using item code/asset number or serial number is also important with the Centers for Medicare and Medicaid Services' mandate in its quality standards to track these items for every equipment order. For repair and maintenance records, the ability to schedule and monitor rental maintenance and repair is also essential in today's accreditation-centric workflow. The ability to track by serial number, lot number, and item repair information is mission critical for long-term compliance with federal regulations and accreditation standards.

BUNDLED PRODUCT MANAGEMENT

Have you ever had an idea to bundle up products to make a new product offering for specialized patient needs? For example, incontinence patients often buy multiple products such as washes, creams, and undergarments. QS1 allows end users to add kits or a bill of materials where you create a master kit item and define what items and quantities make up this kit. This is akin to going to your favorite fast food restaurant and ordering a number 1 off the menu. This solution works well for managing inventory levels of the individual items that make up the "kit."

OXYGEN MANAGEMENT

For oxygen suppliers, it's important to manage the logging of cylinder inventory for compliance with state regulations related to lot number tracking, which can become useful in tracking recalls. Some of the features found in better software applications are the ability to handle lot numbers on both O₂ cylinders and purchase items with lot numbers that might expire, and the ability to track sale and rental quantities and dollars by month, year, and lifetime.

INVENTORY QUANTIFICATION

Ted L. Jones, Jr

As your business grows, your software should grow with you. Rather than incurring the cost of switching out your application as you expand your business with new locations and warehouse facilities, the inventory components should have the ability to track inventory levels for multiple store locations and transfer those quantities between locations—as well as provide information to management on the on-hand inventory quantity. A good system will track who made the change, what the quantity change was, and why that change was made.

PURCHASING MANAGEMENT

The person responsible for this purchasing management must be able to source items and procure them under any circumstances to meet patient demand. The ability of the system to identify a primary and secondary vendor with part numbers is a key to purchase ordering efficiency.

• A purchaser needs to know (without performing a daily physical inventory) the current items on hand. Software that allows you to set maximum and minimum inventory levels will trigger the purchase of particular items in stock.
• With an optional Wi-Fi handheld data collection unit, you can take physical inventories by scanning a shelf UPC/GTIN bar code or the item's UPC/GTIN bar code, and entering the quantity.

Ted L. Jones, Jr, is president and owner of The Intelligent Business Network Inc (www.TheIBNetwork.com), Los Angeles, a national health care consulting firm providing turnkey solutions for National Association of Boards of Pharmacy (NABP) and Joint Commission accreditation, management consulting, and continuous process improvement for business organizations. Jones can be reached via e-mail: .