Supply chain optimization at an academic medical center

Purpose A successful supply chain optimization project that leveraged technology, engineering principles, and a technician workflow redesign in the setting of a growing health system is described. Summary With continued rises in medication costs, medication inventory management is increasingly important. Proper management of central pharmacy inventory and floor-stock inventory in automated dispensing cabinets (ADCs) can be challenging. In an effort to improve control of inventory costs in the central pharmacy of a large academic medical center, the pharmacy department implemented a supply chain optimization project in collaboration with the medical center’s inhouse team of experts on process improvement and industrial engineering. The project had 2 main components: (1) upgrading and reconfiguring carousel technology within an expanded central pharmacy footprint to generate accurate floor-stock inventory replenishment reports, which resulted in efficiencies within the medication-use system, and (2) implementing a technician workflow redesign and algorithm to right-size the ADC inventory, which decreased inventory stockouts (i.e., incidents of depletion of medication stock) and improved ADC user satisfaction. Conclusion Through a multifaceted approach to inventory management, the number of stockouts per month was decreased and ADC inventory was optimized, resulting in a one-time inventory cost savings of $220,500.