Inventory Management (2)

Inventory ManagementGuest Editors D. V. Devine Canadian Blood Services Vancouver CanadaG. D. Sher Canadian Blood Services Ottawa CanadaInternational Forum Editors H. W. Reesink Department of Gastroenterology and Hepatology Academic Medical Center Amsterdam, the NetherlandsS. Panzer University of Vienna Wa¨hringer Gu¨rtel 18-20 A-1090 Vienna, AustriaP. A. S. Hetzel & J. K. WongChapter1Inventory ManagementA critical aspect of blood transfusion is the timely provision of high quality blood products. This task remains a signifi-cant challenge for many blood services and blood systems reflecting the difficulty of balancing the recruitment of suf-ficient donors, the optimal utilization of the donor‟s gift, the increasing safety related restrictions on blood donation, a growing menu of specialized blood products and an ever growing imperative to increase the efficiency of blood prod-uct provision from a cost perspective. As our industry now faces questions about our standard practices including whether or not the age of blood has a negative impact on recipients, it is timely to take a look at our collective inven-tory management practices. This International Forum repre-sents an effort to get a snap shot of inventory management practices around the world, and to understand the range of different products provided for patients. In addition to shar-ing current inventory management practices, this Forum is intended to foster an exchange of ideas around where we see our field moving with respect to various issues including specialty products, new technologies, and reducing recipient risk from blood transfusion products.The following questions were asked of the respondents:Question 1Please describe the overall structure of your country‟s blood system.• Is it managed using a centralized or a decentralized model?• Is inventory moved from one geographic region to another?• What is the shelf life of the different blood products that your system produces?• How many units of each type of product are collected annually, expressed as units per 1000 population?• If known, what is the utilization rate of each product per 1000 population? Please describe how you define …utili-zation‟ in this calculation.• What are the outdate rates for each of these products at your centre and at the hospital, if known? • For the data sets please include not only the most recent year‟s data, but also any year-to-year trend data that you can provide.Question 2Do you provide specialized products for specific patient pop-ulations such as pathogen inactivated products, …fresh‟ blood products, CMV-negative products, irradiated products, etc.?For which patient groups are these provided?Are you considering the introduction of any new special-ized products?Question 3What specific inventory management practices, by product, are used in your organization? For example, these may include …first-in-last-out‟, …first-in-first-out‟, etc.Are inventory levels managed in an integrated fashion between the blood component producer and the hospital user or managed separately?What are the target inventory levels of each blood prod-uct in the overall management structure?Question 4What is the average age of red-blood-cells by blood group at the time of transfusion?Is there a concern in your jurisdiction over the increasing attention being paid to the age of red-blood-cells at trans-fusion and the possible impact on recipients?If sufficient data were to appear that definitively show that younger red-blood-cells are better for patients, how would this affect your inventory management practices?Question 5What is the average age of platelet concentrates at the time of transfusion?Please provide separate data for whole blood derived platelets and apheresis platelets.Is there consideration being given in your jurisdiction for extending the shelf life of platelets?If so, what is the rationale and will additional processes to ensure platelet quality be required?If your jurisdiction has undergone a change in platelet shelf life, what impact did that have on the management of platelet inventory?Question 6What technologies have been considered by your organiza-tion that could have an impact, either positive or negative, on inventory management, e.g. blood substitutes, pathogen inactivation, platelet additive solutions, etc.?We have received responses from 37 organizations repre-senting 30 countries on six continents. Cumulatively, these respondents collect over 30 million components of blood annually. Respondents represent a variety of blood systems, and a variety of types of institutions, from large centralized single-provider national systems to smaller regional hospital based blood services. There are some common approaches to inventory management that can be found among the respondents. All respondents reflect a concern for the value of the blood products, not only in terms of their cost, but also in terms of their relative scarcity. In this light, the almost universally reported inventory management strategy is the …first in, first out‟ practice which is applied to minimize wastage. The theme of product value also can be seen in the expression of the important role that inventory management plays in the stewardship of blood. Most respondents have activities in place to reduce the discard rates of products.A strong recurring theme in these responses is the pres-ence of gaps in the information required to really have an optimal inventory management system. Many providers of blood products have only one end of the rope: that which is attached to the inventory around the production and distri-bution processes. Very few respondents had information back from the hospital customers asto the disposition of the products provided in terms of when or even if they were transfused. This lack of information hampers the ability to drive down the rate of avoidable discards or to know if the manner in which the blood provider manages inventory is optimal for patient safety or ready access to transfusion products.With regard to specialized products, in most coun-tr ies⁄ce ntres all cell concentrates areleucocyte-depleted, but in some depleted concentrates are still only provided for certain categories of patients. Irradiated components are available everywhere. It is of interest that in Japan all cell concentrates are irradiated because of the high risk of transfusion-associated GVHD, because of a high percentage of HLA-homozygous subjects in the Japanese population.In most countries CMV-negative products are provided but in some leucocyte-depleted cell concentrates are considered to be safe. In nearly all countries RBCs not older than 3–5 days are provided, mainly for pediatric transfusions.Washed red cells or platelets are mentioned as specialized products by many countries⁄centres, indicated for patients who suffered a severe anaphylactic reaction after previous transfusions and for patients with anti-IgA. For the latter, IgA-deficient donors are available in some countries, e.g. in the USA. The provision of HLA-class-I compatible platelets for immunized patients is mentioned in the answers from several countries. For further information about specialized products the reader is referred to the answers.The age of blood components varied considerably among various countries. Respondents expressed a general concern over the issue of the allowable storage of components. In only a few countries ⁄centres has the storage time of platelet concentrates (PCs) been extended from 5 to 7 days after bacterial testing was implemented. There is still concern about the efficacy of bacterial testing and the quality of platelets stored longer than 5 days. However, some coun-tries indicate that a 7-day storage time will be adopted when pathogen inactivation of PCs is implemented. In most countries⁄centres no extension of the storage time is planned, either because there is no logistic need for it or because of the above concerns.With respect to the issue of the age of red-blood-cells, most respondents are concerned about this topic and recog-nize the increasing scrutiny that this aspect of transfusion medicine is receiving at this time. The general lack of a body of good evidence to support a shortened shelf life for red-blood-cells has caused most respondents to take a posi-tion of watchful waiting. However, many respondents are already providing younger red cells for use in pediatric patients.One may observe from the details provided in the responses below, that the view of risk and the factors influ-encing risk based decision-making are not consistent around the world. Various risk reduction measures are available to transfusion medicine, and it is evident from the varied responses that risk is balanced in different ways in different blood systems. There is necessary consideration of the cost-benefit ratio of risk reduction technologies and practices, and one can see different lines of thinking at play in the choices made by blood systems around risk reduc-tion, particularly for the application of the more expensive technologies such as leucoreduction and pathogen inactivation.It is clear that much change to improve the products that we have for patients is already underway or coming soon.Pathogen reduction⁄ inactivation was mentioned by many respondents as a process that they intend to implement when technologies are ready, or have recently implemented for platelets or plasma as processes become licensed in their jurisdictions. This technology has already spread widely andwill continue to spread further.The information exchange implicit in the publication of an International Forum on Inventory Management is only a first step. While there is clearly no singular right way to handle inventory management and the choices involved therein, there is a need for constructive dialogue amongst blood suppliers and users of blood products to identify a set of best⁄better practices that can be implemented without prohibitory levels of cost or complexity to increase the availability, safety and quality of blood products for the patients who need them while at the same time increasing the efficiency of this important aspect of blood transfusion management.Question 1Australia has a national blood system which is fully funded by federal and state and territory governments and delivered by the Australian Red Cross Blood Service which is a national organization and operating division of the Australian Red Cross. All blood products are provided to Australian patients free of charge, and in most instances without a price indica-tor for the prescriber which may be relevant to differences noted in utilization of some products compared with other countries. The population is growing by natural increases and net immigration by around 1Æ5% per year in recent years.Inventory within ARCBS is managed nationally and trans-ferred from one geographic region to another to optimize inventory management and to meet clinical need. The shelf life of the different blood products supplied is as followsThe national utilization rate of each product per 1000 pop-ulation for 2008⁄2009 is shown below where utilization is defined as units supplied to hospitals or pathology laborato-ries per 1000 population per annum. The red cell utilization rate varies across individual states and territories from 30 to 42 and has shown differing trends but there has been growth in demand by 3% so far this financial year. This increase in demand is due to increased hospital activity levels including elective surgery as part of a Commonwealth Government initiative to reduce elective surgery waiting lists.The following are currently available data relating to out-date rates for hospitals and pathology laboratories to which ARCBS distributed blood components for the period January2008 to December 2008. Data are supplied from the Elec-tronic Returns Information Capture (ERIC) system which is a voluntary system for reporting blood component discards and the reason for discard. Participation in ERIC has been expanding over the last 2 years and currently represents approximately 65–70% of component issues in Australia.Rate includes those frozen components that were thawed but not trans-fused. Regulation in Australia currently requires that thawed clinical fresh frozen plasma be transfused within 24 h of thawing, or discarded. If the thawed component has been allocated by a medical practitioner for a designated patient under his or her care, it can however be stored at 2–6 C for up to 5 days, after which it must be discarded if not transfused.Whilst hospital and pathology laboratory outdate rates have been captured in the ERIC system for several years,the number of institutions which have commenced partici-pation over this timeframe mean that the data is not directly comparable from year to year.Chapter2Supply chain management of inventory control Supply chain is around the core enterprise through to the information flow logistics cash flow control purchasing raw materials from the beginning intermediate products and the final product is made and finally by the sales network products to the hands of consumers will suppliers manufacturers distributors and retailers until the end user of a whole repeatedly function nets chain structure model. It is a broader enterprise structure mode it contains all join node enterprise. This chain of nodes on the enterprise must synchronization coordinated operation could keep the chain of all enterprises can benefit. This is the key of the supply chain management theory. Inventory control effect the success or failure of the supply chain management is one of the important factors. It relates directly to the discretion of the supply chain cost and service quality. In under the environment of supply chain management inventory control is no longer just a single enterprise how to reduce inventory level problem need more enterprise have global concept and to promote the supply chain performance to achieve optimal. Only know under the environment of supply chain management inventory control characteristics and problems of can pertinently put forward the solution to the problem of strategies and methods.A supply chain under the environment of the characteristics of the inventory controlUnder the environment of supply chain inventory control is not a simple demand forecasting and supplies but through the inventory control for customer service and profit optimization. Under the environment of supply chain inventory control mode is the highest realm of the supply chain seamless connection eliminates supply chain between enterprises high inventory phenomenon. Supply chain management mode gives inventory control the following four new features:1. The supply chain management can be exposed in the process of enterprise inventory control potential problems and crises strengthen the inventory control degree2. Supply chain management can effectively reduce the social inventory levels reduce inventory control costsThe formation of the supply chain the requirements of various aspects of the supply chain to make optimization establish good cooperation relationship that promote rapid product circulation reduce social inventories avoid inventory waste and capital to take up.3. Supply chain management benefit to the enterprise from the “physical inventory control”to “inventory control “change realize the goal of informatization inventory control4. Supply chain management ensures that the enterprise inventory control of flexible and rapid response capabilityunder the environment of supply chain management enterprise inventory areoptimized the whole supply chain the extra dazed inventory have hit bottom with the change of market demand the enterprise can make a quick reaction adjustment of product or to change strategy effectively evade the operating risk of an enterprise.Second under the environment of supply chain management inventory control problemsAlthough from the macro theory under the environment of supply chain management inventory control compared to the traditional management of inventory control have many advantages but the whole supply chain after all is by many single enterprise form in practice since each enterprise on supply chain management understanding different to own enterprise profit level concerns exist and even some enterprise goal of independence and supply chain the overall target of abhorrent wait for a variety of causes in actual use under the environment of supply chain management inventory control theory and method unavoidable also can reveal many practical problems. At present in practice there are several main aspects of the problem:1. “Chain”on each enterprise still lack of supply chain management of overall conceptThough we know of the whole supply chain performance on all nodes on the performance of the supply chain but objectively each department and are independent units all have their own independent mission and business objectives. Some goals and supply chain of the overall aim is irrelevant the more likely is the conflict. The behavior of its own free will inevitably leads to low efficiency of the whole supply chain.2. Not accurate delivery stateData when the customer orders they want to make sure when can you deliver. Waiting for the delivery process also may order to delivery status is changed especially when delivery is delayed after. Many firms have not timely and accurate delivery of order of the delay modify data provided to the user the result is the user of discontent and the loss of good wishes. State data delivery in time not accurate not is the main reason of the information system. This kind of data transmission is not seasonable inaccurate will lead to the decline of customer satisfaction also can cause some link in the supply chain of the enterprise to reduce this situation because too many complaints and had to increase inventories.3. The low efficiency of information systemin the supply chain each node of the supply chain between enterprises demand forecast stock situation production plan is the supply chain management all the important data these data distribution in different between the organization of supply chain to do efficiently and rapidly respond to user demand at present a lot of enterprise information system have not well integrated when supplier need to understand the needs of the users information often get the information and no delay accurate information. Delay due to cause errors and influence the accuracy of the stock short-term production the implementation of the plan will also face difficulties.4. Lack of cooperation and coordinationIn the supply chain management of inventory control the organization obstacle isthe increase of the inventory is an important factor. Supply chain is a whole need to coordinate all activities to achieve the best effect of operation.5. The process of product design without considering the influence of the supply chain inventoryModern product design and advanced manufacturing technology emerge in endlessly make the product production efficiency greatly improved and with high cost benefit but the complexity of the supply chain inventory is often ignored. Results all saving cost are the distribution and supply chain to offset the cost of inventory. Similarly in introducing new products if not to supply chain planning also can produce such as transportation time is too long inventory cost is high and cannot succeed reasons.Three under the environment of supply chain management inventory control strategyAccording to the problems combining domestic and foreign enterprise practice experience and theory research mainly launch the following strategy:1 supplier management Inventory strategyThat is VMI (Vendor Managed Inventory) Inventory management mode. Vendor management inventory strategy is to point to a way between suppliers and users of cooperative strategy the basic idea is to through the integrated supply chain on the nodal enterprises of the inventory control functions so as to achieve the purpose of lower overall inventory costs.VMI is the main ideas of the supplier in the users permission set up under the inventory confirm the inventory level supply strategy and have stock control. In this inventory control strategy allows the organization to upstream of the downstream tissues inventory strategy ordering strategy planning and management. VMI has been widely used in under the environment of supply chain management in the inventory control.2. Joint inventory management strategyIn practice, VMI management mode to suppliers to bring a lot of pressure. VMI in again on the foundation developed a new Inventory management strategy is the Inventory management mode JMI (Joint Managed Inventory).JMI is a kind of upstream and downstream enterprise right enterprise responsibility balance and share the risk of inventory management mode. JMI embodies the strategic supplier alliances new enterprise cooperation relations the emphasis on the supply chain enterprise mutually beneficial cooperation between both sides.Joint inventory management is to solve the supply chain system because each node in the enterprise independent inventory operation mode in demand amplification phenomenon improves the supply chain of the synchronization degree of a kind of effective method. Joint inventory management emphasis on each node in the supply chain and participate in make joint stock plan make each of the supply chain process inventory managers have come from mutual coordination consideration keep supply chain between each node of the inventory managers of demand expectations remain consistent thus eliminating the demand variation amplification phenomenon. Anyadjacent node determine the demand is both the supply and the demand coordination of result inventory management is no longer the fragmented independent operation process but the supply and demand of the connection link and the coordination center.3. The Collaborative supply chain supply chain inventory management strategyassociation with type library storage management strategy # (Collaborative Planning Forecasting amp Replenishment), referred to as "CPFR, it is based on the best classification based on the practice of VMI and JMI, at the same time abandoned the main shortcomings of the lack of supply chain integration and so on, can reduce the amount of inventory distributors at the same time, increase the sales of supplier. It applies a series of process and technology model, covering the entire supply chain process of cooperation, through the common management business process, and share information in order to improve distributor and supplier partnerships, enhance the accuracy of prediction, finally to improve the efficiency of supply chain, reduce inventory and improve customer satisfaction.4. The multi-level inventory optimization and control strategybased on the coordination center joint inventory management is a kind of federated supply chain inventory management strategy, is to control the local optimization of supply chain, and to the global supply chain optimization and control, multi-level inventory optimization and control strategies are necessary. Multistage inventory optimization and control is on the basis of single-stage inventory control. Multistage inventory control method has two kinds: one kind is centralized (distributed) strategy, the other is a centralized (centralized) strategy.（1）decentralized inventory control strategy.Decentralized inventory control is the attribute of the supply chain inventory control cost is divided into three centers, namely manufacturing cost centers, cost of distribution center, the retailer's cost center, the center according to your own inventory cost optimization control strategy. Decentralized inventory control to achieve the overall optimization of supply chain effect, need to increase the degree of information sharing of the supply chain, make every part of the supply chain to share unified market information. Decentralization multistage inventory control strategy can make the enterprise according to their own actual situation to make quick decisions independently, play is conducive to their own autonomy and flexible mobility. Decentralization of the multi-level inventory optimization strategy management is simpler, but does not guarantee that produce the whole supply chain optimization. If it needs to be better coordination between enterprises, poor coordination and information sharing degree is low, could lead to a fragmented situation.（2）centralized inventory control.Centralized control is the control center on the core enterprise, the core enterprise of supply chain inventory control, and coordination of upstream and downstream enterprise inventory activities. That also has become the supply chain core enterprise data center (data warehouse), for the data integration, coordination function. Centralized inventory optimization control of supply chain total inventory cost minimum. The goal is to make With centralized strategy, all the control parameters of the inventory is determined at the same time, considering the relationship of thevarious inventory point, through coordinated approach for inventory optimization. But centralized strategy on management coordination is difficult, especially the level of the supply chain, namely supply chain length increases, the more increased the difficulty of coordination control.To sum up, the enterprise wants to win in competition, must quickly shift from traditional management mode to supply chain management mode, gradually to break the fragmented in the inventory control situation, sets up the global idea. 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