P D Hinduja Hospital and Research Center, Mahim.

1.1.1

Operationalisation of bar coding for inventory management at Hinduja Hospital

Department of Stores

Dr Anay Bhalerao Dr Rushikesh Deshpande

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P D Hinduja Hospital and Research Center, Mahim.

1.1.2 Preface
Narsee Monjee Institute of Management Studies, under its Social Engagement Program, We Care, collaborated with P. D. Hinduja Hospital and sent us for a three week winter internship from 1st through 21st January 2012. Backed with medical know-how from our backgrounds and management skills learnt at NMIMS, we worked under the Department of Stores at P D Hinduja Hospital. It was good learning experience for us and an opportunity to apply theoretical concepts to practical use. The compiled report is the outcome of observation and analysis of the inventory in the main stores viz. the Medical Store, the Pharmacy Store, and the Operation Theatre Store. It is cross sectional study taken over a short period, covering many parameters and listening to views of all stakeholders and should be interpreted with this backdrop.

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P D Hinduja Hospital and Research Center, Mahim.

1.1.3 Executive summary

The Stores There are three main stores in the hospital, who get shipments from the suppliers. The Medical Store The Pharmacy Store The OT store

The shipments arrive at different time period and a trace is kept of the inbound and the outbound logistics. From the stores, the inventory moves to the sub stores at the ward level by the Just in Time method. The accounting is done manually, and there is a need felt by the hospital to implement a digitalized method to keep trace as this would reduce the record keeping as well as improve traceability of the same in the long run. The study was carried out to find the problem areas, identification of the potential bottle necks and to recommend on a plan for the implementation of the whole project Observations We observed that the stock arrives in a different way for each store, and a different percentage of it is actually inventoried in the warehouses. This creates a need for a Phasic implementation of the plan. Recommendations We recommend that the plan be implemented in a Phasic manner, spanning over a period of 5 - 6 months. The detailed phases are included in this report. We also give recommendations for the necessary manpower and the machinery to implement the project.

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P D Hinduja Hospital and Research Center, Mahim.

1.1.4 Acknowledgements
We thank Director of Hospital, Mr. Chakraborty, for giving us this opportunity to work on this project. We express our gratitude towards Dr Goraksha who was our mentor and was a constant motivator. She provided the guidelines necessary to see this project through in timely manner. Ms. Bhavisha Kharnare was of invaluable help with lending us the required data for the project, as well as valuable insights in the process. We thank the respective heads of the stores, Ms. Makhija, Ms. Geetali and Mr. Tambe, and their staff who found time in their busy schedule to answer our queries. Lastly, we thank the Library staff who tolerated our presence throughout the project and helped us with the same.

Dr. Anay Bhalerao Dr. Rushikesh Deshpande.

Dated 20 Jan 2012 Hinduja Hospital, Mahim.

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P D Hinduja Hospital and Research Center, Mahim.

Table of Contents
Sr No 1.1.2 1.1.3 1.1.4 1.1.5 1.1.6 1.1.7 1.1.8 1.1.9 1.1.10 Topic Preface Acknowledgements Executive Summary Chapter 1:Introduction Methodology Chapter 2: Role of Bar Code Chapter 3: Resources Chapter 4: Recommendations Chapter 5: Plan for Execution Chapter 6: Other Recommendations and Page no 02 03 04 Research 05 09 11 13 15 20

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P D Hinduja Hospital and Research Center, Mahim.

1.1.5 Chapter 1 Introduction and research methodology

P D Hinduja Hospital For last 60 years, Hinduja hospital has been serving Mumbai by providing tertiary level medical facilities. With capacity of 394 beds it truly fills up the need for a world class super specialty tertiary care hospital. Any healthcare institute to run to its potential best requires good doctors i.e. medical fraternity, good paramedical staff and an efficient supply of drugs and medical provisions. In last three weeks we have studied the third aspect of at Hinduja.

Research Objectives

To study inventory management at P D Hinduja hospital

To suggest a plan for implementation of Bar Code System for inventory management

Warehousing at Hinduja Hospital Being a hospital, the supplies primarily include drugs, chemicals, medical equipments and Medical instruments. The storage becomes a daunting task not just because of the value of the inventory but also due to the specific requirements like refrigeration, sterility, delicate handling and ready availability.

Components of warehousing There are three distinct warehouses which are referred to as stores in the premises. 1) Medical Store 2) Pharmacy 3) OT store
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P D Hinduja Hospital and Research Center, Mahim.

There is a CSSD department, which handles the sterilization and subsequent packaging of materials like cotton, gauzes etc which would require sterilization.

Medical store: It houses items like tubes, catheters and materials which are strictly speaking not drugs. Total value of the in house items in December was Rs_17234771 Based on the value the all items are segregated into the ABC lists. List of item A B C Value of the total items in the list 70% 20% 10% Total number of distinct items 245* 385* 181*

* It includes stock consignment items as well as some supplies to cath. lab and IVF. Pharmacy: The primary drugs store of the hospital. It caters to demand from the wards. Staff nurses enter requirements in the computerized system which is reflected in the pharmacy store. The demand then is met by providing the drugs at regular intervals. Attendants carry the drugs after every two hours to the wards in consideration. The system is efficient and works fine. For pharmacy ABC listing is as follows: List of item A B C Value of the total items in the list 70% 20% 10% Total number of distinct items 135 261 1572

OT store: 55 % of the items that are issued form this store are consignment items. It is difficult to bar code these items, at least initially. The inventory runs up to Rs 23436513. The A list would then, be valued at Rs 16405559. Out of that, around 17 Stock items qualify for the A list. List of item Value of the total items in the list Total number of distinct items

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P D Hinduja Hospital and Research Center, Mahim.

A B C

70% 20% 10%

88 270 843

In all three stores there is another criterion for segregation of products, which is based on the process followed for the purchase and storage of the item. It reflects the value of the individual item as well as demand and date of expiry.

4 categories Consignments:

The stock is not maintained in the warehouses. It is delivered by the supplier as needed on a daily basis. Unused stock is returned back. Stock Consignments: Consignment items with special code Stock Items: for a month at the maximum Manual Orders: for items not in the list- generally misc items like drip stands, etc Scope of our study is limited to A list items with Stocking capabilities. Process of purchasing and billing: Three departments are stakeholders in this process viz. stores, purchase department and finance department. For stock items which are housed in the stores, inventory is maintained for less than a month. Fast moving items like gloves for which turnover is very high are stocked for fewer days. Orders are placed with suppliers directly and goods are received on a weekly or fortnightly basis. Different products have this cycles going on different days. So the incoming goods keep coming almost every day. After the goods are checked and confirmed, the store concerned with the stock prepares A Goods Received Note This is then handed over to the supplier. GRN gets paid by the Finance department afterwards. Purchase decisions like price negotiations and initial entry in the system like generating product code for a new item is done by the Purchase department. For Stock consignments a similar process is followed but there is provision of returning of the items. A bare minimum stock is maintained. Generally these items have low storage life and thus the process ensures that FDA norms are met. For consignment items, which are infrequently required and are not stocked at all, a supplier comes to hospital with required set of items, these get consumed by the end used users like OT and then the supplier comes to store. The item is there is the system. A GRN is prepared and process continues. Manual orders are an exception, as the items are included in the list. A separate record is kept for such rare items like Drip stands etc.
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P D Hinduja Hospital and Research Center, Mahim.

1.1.6 Chapter 2 Role of Bar Code

System of Bar coding product has been adopted well all over the world and has been a revolution for billing in retail sector and inventory management. A computer generated code is printed and sticking of that code is applied to the item or SKU of item to be specific. The code contains information about the product. For hospital items variables in the code will be: 1. Lot number - this is present over packaging and is also mentioned on the GRN 2. Date of Manufacturing - For the same lot
3. Date of Expiry very important consideration. Every time a product is checked out and

delivered. The process of checking this date is necessary. When manually done, it is indeed cumbersome and consumes time.
4. Price Purchase price or selling price as per requirements.

Types of bar code: 1) 1-D

2) 2-D

Both codes have their own advantages and disadvantages. There is limitation on number of characters which can be fielded on a barcode. This limit is less for 1-D and more for 2-D ones and depends on specification attributed by service provider. IT department has already identified the type and specifications required. As informed to us the 2D code will be of size 15*15 mm.

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P D Hinduja Hospital and Research Center, Mahim.

Flow of activities:
Computer with list of items and specifications

Printer which Prints bar codes

Bar code with information impregnated in coded form which is illegible to unaided eyes

Barcode is manually applied to item externally at the time of receiving

Storage of the item

Scanner which can read bar code at the time of delivery

Computer which maintains records gets automatically updated about the delivery

Fig 1.1

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P D Hinduja Hospital and Research Center, Mahim.

1.1.7 Chapter 3 Resources

Before the start of the project, there would be a necessity of the following Bar code printers Bar code scanners Man power to implement the project

Bar Code Printers: On an average, a weekly shipment consists of 8,000 units to any store. The outbound is different for different stores. Out of that, around 4000 - 6000 units would be from A list. The printer should be able to print the codes at sufficient speed so as to take the immediately required inventory in the stock, say within 2 hours. The rest can be accounted for, as it is done currently spanning over one or two days. Bar Code Scanners They would be required to scan the codes affixed to the SKUs. We recommend 2 scanners initially at each store. Man Power There would be a need for man power at three different areas in each store. One person (at least) to enter the codes necessary for printing of the bar codes Two persons (at least) to affix the codes to the relevant item properly One person (at least) to supervise the process and troubleshoot

A person, on an average, would be able to affix around 80-100 bar codes per hour. For an 8 hours shift, with an efficiency of 60%, he would be able to affix around 400-500 bar codes per day. The efficiency of work would increase, as he gets acclimatized to the work. The inventory is sizable and the work required would require additional personnel for the first two tasks.
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P D Hinduja Hospital and Research Center, Mahim.

The supervision should be done, at least initially by a person currently working in that department. He/ She can also help in the above mentioned tasks if need arises.

The close proximity of the medical store and the Pharmacy stores may be used to utilize the resources commonly Setting up of a separate unit for bar coding may be economic in this case.

1.1.8 Chapter 4
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P D Hinduja Hospital and Research Center, Mahim.

Recommendations
The bar code implementation for all the stores and sub stores would span over a period of 5-6 months depending on the ease of implementation and the benefits. Our recommendations, though general for all the main stores, would differ slightly for each store taking into account the limitations for each department. Pharmacy Store This store has a lot of moving inventory. Thus it would benefit the most if the project meets the expectations. Strengths The Pharmacy has a decent space to install the printers and the scanners. It would be ideal to start a pilot run for the implementation of the project. Problem Areas The pharmacy stocks the smallest Stock Keeping Units (SKUs) amongst the three stores. The size of the SKU is the outermost packing in which the item is dispensed. The ampoules and some lancets are small, and it would require a different kind of either packaging or a Bar code (1D bar code) for the same. Medical Store This is the main warehouse where the non pharmacy items are stored. The medical store, as with pharmacy, caters to the whole hospital. Strengths All the SKUs within this store are packaged in such a way that bar coding would not be a problem. Problem Areas There is barely enough space to install a separate printer and a place to print and affix the bar codes. Operation Theatres The operation theatres are situated independently over the 3rd floor. The inventory is made up of consignment, as well as stock items.

Strengths
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P D Hinduja Hospital and Research Center, Mahim.

Fast moving stock. Thus the bar coding would be most beneficial Consignment items returned back promptly after use. Thus filtering of items which should be bar coded is easier

Problem Areas A lot of consignment items would make it difficult to implement the bar coding there, due to the paucity of time It is 2 floors below the other stores. Thus a separate printer setup would be required

1.1.9 Chapter 5 Plan of execution

The project would be implemented in 5 phases. The idea is to implement a system with quantifiable results, with sufficient time to acclimatize the stores with the change in the system.
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P D Hinduja Hospital and Research Center, Mahim.

Phase 0 This would be the pilot run. It is recommended to implement it for at least two weeks (2-3 shipments) preferably in one of the stores. In this phase, the bar coding would be tried out on a select sock of fast moving stock goods, so as to check the viability of the process. Stores to implement We recommend that this phase be implemented in the Pharmacy store, as there is some space to install the printer and allied IT systems in the warehouse. Stock to implement The bar coding would be implemented on the select stock in each category Code Vials STINJECTNS0026 STINJECTNS0131 STINJECTNS0469 STINJECTNS0132 STINJECTNS0528 Ampoules STINJECTNS0484 STINJECTNS0006 STINJECTNS0093 Bottles STIVFLUIDS0150 STIVFLUIDS0146 STIVFLUIDS0147 STIVFLUIDS0143 Other STPHSURCON0465 STPHSURCON0916 STPHSURCON0044 STPHSURCON1106 UROMETER PCS/UROMETER PLUS IV SET [SAFESET BASIC] PCS BIVALVE WITH EXTENSION 10CM/7CM PCS DIGITAL THERMOMETER (DR 709 3490 3612 1267 57.92 42.40 34.49 69.76 41062.78 147979.47 124577.25 88384.26 Name units Price per unit 112.21 87.31 81.27 55.24 21.95 71.23 52.56 10.07 51.50 50.23 47.77 47.77

total price 76,862.11 77,444.03 225,357.74 49,329.06 76,170.35 151,936.43 126,195.06 51,651.69 648380.41 104914.04 316991.90 178995.02

AUGMENTIN 1.2GM INJ VIAL HEPARIN INJ 25000MG VIAL 5ML(HR) SUPACEF 750MG INJ VIAL (CEFUROXIME) HEPARIN INJ 5000 VIAL 5ML(HR) PANTODAC 40MG INJ VIAL TRACRIUM INJ AMP 2.5ML ADRENOR INJ. 2ML AMP. EMESET INJ. 2ML (4MG) PERFALGAN INJ 1 GM /100ML ECOFLAC PLUS DEXTROSE SALINE IV 500ML ECOFLAC PLUS NORMAL SALINE IV 100ML ECOFLAC PLUS NORMAL SALINE IV 500ML

685 887 2773 893 3470 2133 2401 5130 2,959 2,037 6,311 3,747

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P D Hinduja Hospital and Research Center, Mahim.

GENE) TOTAL

42504

2,486,231.60

The initial number of Pharmacy items would be about 42,504 and the total inventory value would be about 24,86,231.60. These items represent the commonest issued items from the A category in the Pharmacy stores. Advantages The bar coding can be implemented at a slower pace, and training can be imparted while doing the same As the stock would be accounted in parallel, the efficacy of the implemented system would be measurable. Items can be bar coded group wise, and that would give us a rough idea of the time and efforts required to barcode an average shipment (around 10,000 SKUs)

Phase 1 This would be extension of the pilot run to the Stock items in each store from the A list, with a set unit price cut off. This would be implemented over a period for one month (4-6 shipments) so that, any problems not seen in the pilot run would be apparent. The cut off for the unit prices could be decided as per required. A few cut offs for each store are given below Pharmacy No of units in the Inventory inventory value Rs 25 74518 14092793.79 Rs 50 59420 13479507.71 Rs 100 20077 11028671.58 *percentage of the A list Cut off Medical store The Number of units was not available for analysis. Moreover, the stock items comprise around 46 percent of the A list inventory. Thus, we recommend that the Stock items in the medical store be taken up for the Bar coding in the Phase 1.
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Percent* 94.95 90.82 74.30

P D Hinduja Hospital and Research Center, Mahim.

Operation Theater The A list comprises of the 70 percent value of the total inventory. When we see the Stock Items, there are 17 stock items in all. The total number of units is 7859. This can be considered for the Phase 1.

Code STCARDOTHR0047 STINJECTNS0769 STANAESTHE0004 STNEURITEM0019 STORTHOITM1476 STINJECTNS0294 STPHSURCON0335 STCARVASCO0061

Name

Value per unit

Quantity

Value 58666.67 78705.98 367341.73 67441.67 66945.10 70020.58 62812.63 51024.79 74876.57 84415.62 72398.74 90405.28 65216.66 77174.45 53750.27

ACROBAT - I HEART STABILIZER MAKE- 87562.19 1 MAQUET LUCENTIS INJ OPTION 2 (ONGC) SEVOFLORANE 250ML TISSEEL KIT 1 ML MAKE-BAXTER BONE CEMENT R + G PALACOS TARGOCID INJ. (TEICOPLANIN) 39352.99 2 4185.75 3549.56 88 19 28 67 87 102 422 542 510 715 536 673 662

40 GMS MAKE 2390.90 400MG. VIAL 1045.08 721.98

SHORT LEADER CATH L-8CM CAT 115.09 PCS

PRESSURE MONIT KIT EDWARDS PX260 500.24 /PX284. 11 E 7507 ADULT 177.43 155.75 141.96 PORT 126.44 121.67 114.67 81.19

STGENCONSM0495 REM POLYHESIVE VALLEYLAB STPHARMITM0006

HYGROBAC PCS 352/5877 PCS

STHANDGLOV0002 GLOVES DISPOSABLE MEDIUM STPHSURCON0596 STINJECTNS0813 STINJECTNS0247 STINJECTNS0469 VENTILATOR (ADULT) CIRCUIT WITHOUT

ANETOL(PARACETAMOL) INJ 100ML FRESOFOL 1% INJ 20ML AMP SUPACEF 750MG INJ VIAL (CEFUROXIME)

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P D Hinduja Hospital and Research Center, Mahim. STINJECTNS0484 TRACRIUM INJ AMP 2.5ML 72.31 1856 1550 134199.33 85491.57

STGENCONSM0887 SUCTION TUBE (STERILE) SIZE- 6MM X 4 55.16 MTR

Total

7859

1560887.64

Advantages By the end of Phase 1, majority of the stock inventory would be bar coded. It is easier to barcode the stock inventory than the consignment inventory. The bar coding of smaller SKUs would be implemented in this phase Any problems not apparent in the earlier phase would become more apparent

Phase 2 This phase would span from the second to the third month. The main focus would be to include all the stock items. Likewise, efforts should be made by that time to route the consignment items in such a way that bar coding would not eat up time. The recommendation for the same would be discussed later. By the end of this phase, almost 50% or more inventories worth of the medical store and the OT complex, and almost all the inventory of the Pharmacy would be covered. Advantages With even the smaller SKUs in the list, the routine would be set for the barcode. Along with it, the existing system of entering the inventory and dispatch would be integrated and would be made automatic. This would later save some time, once the project is extended to the sub stores Phase 3 By the end of three months, the routine would be sufficiently set, and the efficacy of the people implementing it is improved, the consignment items could be taken up for bar coding. This phase can be extended for two months. Phase 4
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P D Hinduja Hospital and Research Center, Mahim.

By the end of five months, efforts can be made to extend the project to the sub stores. A few recommendations regarding the same

Integration of bar code system for the indent. i.e. the sub stores can be given a chart of bar codes, and they can scan the relevant code in order to enter it. This way, there would be a bi directional integration and the system would be more useful.

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1.1.10 Chapter 6 Other Recommendations:

We recommend setting up of a common facility for printing barcode on the 5th floor which would be used collectively by the Pharmacy as well as the Medical Store. There would be a separate printer for the OT store.

Dedicate exclusive manpower for affixing the bar codes for each store

We thus conclude our report.

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