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Par Level vs. Kanban

  
  
  

Par level and kanban are two Lean methodologies that hospitals use for managing inventories of supplies, medications and other materials.

 Par Level

PAR LEVEL: When using this method, a quantity is established for each item (the par level), based on the average usage and how many days supply is needed.

As the material is actually used, the quantities are brought "up to par" daily by taking an inventory and restocking the quantity that was consumed.

Richard Rahn, a Principal with Leonardo Group Americas, an international Lean consulting and training company based in Colorado, brings up an interesting point about the Par Level method.

 “It is interesting to note that this par method of inventory control is not used in a world-class manufacturing environment, although a manufacturer certainly has the same needs and goals for inventory control as a hospital. The suggestion that we do a daily physical inventory for a large number of inventory items would be greeted with astonishment and ridicule. Many world-class manufacturing companies do not even conduct an annual inventory, by sustaining a high level of inventory accuracy through tight controls and cycle counting.”

 Kanban Method

KANBAN: The word kanban is Japanese for “symbol,” which essentially explains the concept around practicing this Lean method.

When using kanban, two quantities, or bins filled of the same supply, are set up. When one of the bins becomes empty that signals that a re-stocking is needed.

The material manager can be notified of this need by using a variety of signals (placing stock cards on a cork board within the supply room, scanning a barcode on the material, running a report that is delivered each day, etc…). While the one bin is being refilled, there is a second bin to cover usage during the replenishment cycle.

Re-stocking then occurs only once a day vs. on an as-needed basis like with Par Level. Kanban also eliminates the need for daily counting.

Let’s take a side-by-side look at Par Level vs. Kanban:

Inventory Control in Hospitals

Healthcare Materials Management Issues Solved [Infographic]

  
  
  

One of the cool things about working in marketing is that you’re generally allowed a certain amount of creative freedom. While not completely without a leash (it is work after all), it does allow for an occasional foray into the fine arts. 

A neat tool that many in marketing and other areas are using is the information graphic or “infographic.”  “What is an infographic?” An infographic is a visual demonstration/description of a particular topic.  It’s a visual feast, especially if created at the hands of a talented graphic artist.  Sometimes, they’re just as informative and charming when created by someone with less experience in graphic design. (Like me.)  Infographics can contain nearly anything to demonstrate a point, including charts, graphs, photos, icons and text.  Some infographics are complex, while others are quite simple. Infographics can be used to demonstrate anything from how to make a peanut butter and jelly sandwich to the history of the American automobile. 

lean healthcare materials managementInfographics aren’t new.  They have been around a long time.  The earliest use was caveman paintings that evolved into maps.  It was an especially handy way to share information, since writing and certainly blogging didn’t exist back then.  Fortunately, we have developed language and have an array of tools and technology that allow us to create mind-blowingly awesome infographics today. 

Now, we’ve been talking, writing, blogging, etc. about lean healthcare for a while.  We’ve done our homework on lean materials management and have come up with some interesting statistics on the subject.  Statistics that could and should be used in an infographic on lean materials management.  Spacesaver has used the research and statistics to develop a handy infographic to visually demonstrate how implementing lean in healthcare can save time, money and even lives.  Here’s how we did it:

OUR TOPIC: ADVANTAGES OF LEAN MATERIALS MANAGEMENT

GENERAL, BUT RELEVANT OBSERVATIONS

While we can all agree that healthcare is expensive, we don’t necessarily agree on how to change it.  The costs continue to rise.  However, there are ways to curb the upward trend.  A simple response, packing a big punch, is implementing lean into everyday operations.  One of the areas where costs can be more than 40% of a hospital’s budget are materials, such as bandages and medication. By implementing a lean material management system, on-hand inventory can be right-sized, stock outs eliminated and waste reduced.  In addition, a reliable lean material management system will also eliminate the need to count by hand, reducing the time that practitioners spend hunting down supplies. Time saved can be spent focusing on more value-added and skilled activities like providing for patient needs and care, which is something we can all agree upon.

OUR LEAN MATERIALS MANAGEMENT SOLUTION

Kanban replenishment bin

Spacesaver and LogiTag’s StockBox provides a user-friendly, simple to install lean materials management solution for healthcare.  The StockBox which is an RFID-enabled device when combined with a FrameWRX shelving system and a 2-bin Kanban method of materials management, allows hospital materials managers to decrease unnecessary inventory and ensure that materials are where they need to be when they’re needed.  The benefits of implementing a lean solution such as this include less travel time hunting for supplies, improved space utilization, decreased overhead AND more time to spent with the patient.  

OUR CREATIVE RESULTS

We took this information, all the statistics and sources and gave them to our resident expert graphic artist to create an informative and engaging work of art.  The result? 

An awesome infographic on materials management issues in healthcare and how implementation of lean Kanban methods can have an amazing return on investment in a relatively short period of time.  See the full results here.

Clinical Inventory Management
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