This document provides an overview of the global and Indian healthcare industry as well as Narayana Health City, where the inventory study was conducted. Globally, healthcare spending reached $7.2 trillion in 2014 and is expected to grow annually by 5.2% through 2018. In India, healthcare spending as a percentage of GDP is among the lowest in the world at about 1.4% of GDP. Narayana Health City is a multi-specialty hospital located in Bangalore, India where the author conducted an inventory classification study to analyze and improve inventory management practices.
The document provides an overview of the pharmaceutical market in Pakistan. It includes key facts and figures on the size and growth of the Pakistani pharmaceutical market, which reached PKR 343 billion in 2017. It also details the country's healthcare system structure, leading therapeutic classes, and import/export partners. The top 100 pharmaceutical companies account for over 95% of the market by both value and units. The market is growing at a projected rate of 11.42% annually.
Medicines outlook through_2016_report
source of info:
http://www.imshealth.com/deployedfiles/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/Global%20Use%20of%20Meds%202011/Medicines_Outlook_Through_2016_Report.pdf
China pharmaceutical business market forecast and investment strategy report,...Qianzhan Intelligence
This document provides an overview and summary of the Chinese Pharmaceutical Business Market Forecast and Investment Strategy Report from 2013 to 2017. It discusses the objectives and importance of the report, which is to provide an accurate and comprehensive analysis of the pharmaceutical business industry in China. This includes analyzing aspects such as industry policies, economic environment, market demand, development status and prospects, competition among major companies, status of pharmaceutical wholesaling and logistics markets, and more. The document emphasizes the report's focus on insight and timeliness to help readers understand the latest industry trends and make correct business and investment decisions.
The Ministry of Health and Family Welfare developed the National Health Accounts (NHA) in 2001–02 to support the governance of health systems and enable the design of more effective health policies. This report provides an estimate of the total health expenditure for 2004-05 (taking into consideration the launch of the National Rural Health Mission in 2005), and gives provisional estimates of the health expenditure from 2005-06 to 2008-09.
In the computation of NHA, the World Health Organisation’s (WHO) definition of health expenditure was adopted. NHA includes expenditure on inpatient and outpatient care, hospitals, specialty hospitals, health promotion centres, rehabilitative care centres, capital expenditure on health, medical education, and research and training. It excludes expenses on water supply, sanitation, environmental health and the mid-day meal programme.
This document provides an overview of key drivers that contributed to the strong performance of the healthcare sector in 2015. It discusses several secular trends that are positive for continued healthcare outperformance, including durable demand driven by demographics, growing affluence, and a shift to chronic diseases. Innovation is also accelerating due to genomic advances and increasing use of information technology. Regulatory and public policy trends are seen as positive, with the FDA approving drugs faster and policies expanding health insurance coverage. Overall, the healthcare sector remains attractively positioned for long-term growth.
This whitepaper provides an overview of Chinese pharmaceutical market access. This includes an overview of the Chinese pharmaceutical market, government regulatory bodies,distribution channels, demographics, pricing and insurance. It also includes an overview of current regulations and product registration procedures.
This paper is meant for anyone within the pharmaceutical industry who is looking to learn more about how to access the pharmaceutical market in China.
For more information, contact us for a free 15 minute consultation at http://www.pacificbridgemedical.com/contact-us/.
Case Study: Improving Care through Patient-Centered Clinical Pharmacy Service...HFG Project
The Clinical Pharmacy activity in Ethiopia from 2012-2016 aimed to promote patient-centered pharmaceutical services. It trained over 200 pharmacists through a one-month in-service program. As a result, 53 of 65 hospitals implemented clinical pharmacy services. Key factors for its success included a supportive policy environment, stakeholder commitment, and an implementation plan to build staff capacity according to existing guidelines. The activity was part of broader Systems for Improved Access to Pharmaceuticals and Services (SIAPS) project in Ethiopia led by Management Sciences for Health.
Drug manufacturers are looking to emerging markets like Latin America to fuel long-term success.
View this PAREXEL Consulting presentation to learn more.
The document provides an overview of the pharmaceutical market in Pakistan. It includes key facts and figures on the size and growth of the Pakistani pharmaceutical market, which reached PKR 343 billion in 2017. It also details the country's healthcare system structure, leading therapeutic classes, and import/export partners. The top 100 pharmaceutical companies account for over 95% of the market by both value and units. The market is growing at a projected rate of 11.42% annually.
Medicines outlook through_2016_report
source of info:
http://www.imshealth.com/deployedfiles/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/Global%20Use%20of%20Meds%202011/Medicines_Outlook_Through_2016_Report.pdf
China pharmaceutical business market forecast and investment strategy report,...Qianzhan Intelligence
This document provides an overview and summary of the Chinese Pharmaceutical Business Market Forecast and Investment Strategy Report from 2013 to 2017. It discusses the objectives and importance of the report, which is to provide an accurate and comprehensive analysis of the pharmaceutical business industry in China. This includes analyzing aspects such as industry policies, economic environment, market demand, development status and prospects, competition among major companies, status of pharmaceutical wholesaling and logistics markets, and more. The document emphasizes the report's focus on insight and timeliness to help readers understand the latest industry trends and make correct business and investment decisions.
The Ministry of Health and Family Welfare developed the National Health Accounts (NHA) in 2001–02 to support the governance of health systems and enable the design of more effective health policies. This report provides an estimate of the total health expenditure for 2004-05 (taking into consideration the launch of the National Rural Health Mission in 2005), and gives provisional estimates of the health expenditure from 2005-06 to 2008-09.
In the computation of NHA, the World Health Organisation’s (WHO) definition of health expenditure was adopted. NHA includes expenditure on inpatient and outpatient care, hospitals, specialty hospitals, health promotion centres, rehabilitative care centres, capital expenditure on health, medical education, and research and training. It excludes expenses on water supply, sanitation, environmental health and the mid-day meal programme.
This document provides an overview of key drivers that contributed to the strong performance of the healthcare sector in 2015. It discusses several secular trends that are positive for continued healthcare outperformance, including durable demand driven by demographics, growing affluence, and a shift to chronic diseases. Innovation is also accelerating due to genomic advances and increasing use of information technology. Regulatory and public policy trends are seen as positive, with the FDA approving drugs faster and policies expanding health insurance coverage. Overall, the healthcare sector remains attractively positioned for long-term growth.
This whitepaper provides an overview of Chinese pharmaceutical market access. This includes an overview of the Chinese pharmaceutical market, government regulatory bodies,distribution channels, demographics, pricing and insurance. It also includes an overview of current regulations and product registration procedures.
This paper is meant for anyone within the pharmaceutical industry who is looking to learn more about how to access the pharmaceutical market in China.
For more information, contact us for a free 15 minute consultation at http://www.pacificbridgemedical.com/contact-us/.
Case Study: Improving Care through Patient-Centered Clinical Pharmacy Service...HFG Project
The Clinical Pharmacy activity in Ethiopia from 2012-2016 aimed to promote patient-centered pharmaceutical services. It trained over 200 pharmacists through a one-month in-service program. As a result, 53 of 65 hospitals implemented clinical pharmacy services. Key factors for its success included a supportive policy environment, stakeholder commitment, and an implementation plan to build staff capacity according to existing guidelines. The activity was part of broader Systems for Improved Access to Pharmaceuticals and Services (SIAPS) project in Ethiopia led by Management Sciences for Health.
Drug manufacturers are looking to emerging markets like Latin America to fuel long-term success.
View this PAREXEL Consulting presentation to learn more.
China Healthcare Market potentials & opportunitiesritupon gogoi
China has a large and growing healthcare market due to its large population and strong economic growth. Healthcare expenditures as a percentage of GDP have been rising in China and are projected to reach $1 trillion by 2020. An aging population and rising rates of chronic diseases will drive further growth in healthcare spending. However, the Chinese healthcare market faces challenges from frequent changes in regulations, policies that favor domestic generic drugs over innovative medicines, and difficulties for foreign companies to gain inclusion on the national drug reimbursement list.
The document discusses strategies for successful global drug development. It focuses on navigating FDA accelerated approval programs, new frontiers in personalized medicine, and evolving regulatory paradigms for digital health. The presentation provides an overview of key FDA expedited programs like fast track designation and breakthrough therapy designation. It also examines how regulators are adapting approaches to personalized medicine and digital health technologies.
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro DiagnosticsSolidiance
With the increasing economic growth and demographic changes in Myanmar, expenditure in the healthcare landscape is set to rise exponentially by the growing awareness of regular check-up for early detection of non-communicable diseases. The country is also witnessing rapid growth in healthcare demand which inevitably results in the development of the healthcare system. These shifts are creating emerging opportunities for private healthcare companies, especially in the Diagnostic Imaging (DI) and In Vitro Diagnostics market. However, demand for better healthcare services are increasing faster than supply, requiring global healthcare players to have a long strategic view of the market. This white paper analyses these trends and provides strategic insights to create a sustainable long term strategy to capitalize on these opportunities.
Healthcare in china - Entering uncharted waters (McKinsey September 2012)Franck Le Deu
The healthcare market in China continues to grow rapidly due to favorable demographic and economic trends. However, the path forward will become more challenging as the system undergoes significant reforms. While opportunities remain for multinational companies, increased competition from local players and pressure on pricing will make it difficult for late entrants to achieve success. To navigate these "uncharted waters", companies must consider principles like adapting business models to the reforms and finding ways to innovate that satisfy both commercial and policy objectives.
This document introduces the importance of research, development and evaluation strategies for advancing the global pharmaceutical workforce agenda. It discusses how global health organizations are promoting workforce development to achieve universal health coverage and sustainable development goals. It outlines FIP's adoption of a global vision and Pharmaceutical Workforce Development Goals to guide the transformation of the pharmaceutical workforce. The document argues that research, development and evaluation are integral to implementing this agenda and achieving progress on the goals. It provides context on global health strategies and highlights the need for countries to develop aligned national strategies to scale up their pharmaceutical workforces.
Thailand has a highly developed healthcare industry that provides first-class medical services at affordable prices. It has over 1,000 public and 400 private hospitals that meet international standards, as well as physicians with overseas training. Private hospitals have cutting-edge medical equipment. Each year, Thailand attracts almost 2 million medical tourists due to its reputation for quality care at low costs compared to other countries. The medical device and pharmaceutical industries are also growing in Thailand due to opportunities for manufacturing and R&D. The government offers incentives for healthcare investments through the Board of Investment.
Aligning on Patient Outcomes - How Market Dynamics Can Facilitate RWD SolutionsPAREXEL International
This document discusses how real-world data can be used to better understand patient outcomes. It notes that legislation, technology advances, and a shift toward valuing outcomes over volume are accelerating the focus on using real-world data to determine what treatment approaches improve patient outcomes. The document outlines challenges to using real-world data like data quality issues and privacy concerns, and proposes strategies like using hybrid study designs that combine electronic medical record data with traditional clinical trial data collection to help overcome these challenges. Finally, it emphasizes that solutions in this area will need to be developed incrementally while protecting patient privacy and gaining regulatory acceptance.
This document provides an overview of hospitalist careers, including definitions, history, workforce facts and trends, recruitment considerations, and factors influencing physician career decisions. It discusses the growth of hospitalists from a few hundred in 1996 to over 30,000 currently practicing in the US. Hospitalists typically work block schedules without taking call and have opportunities in clinical work as well as leadership roles. Recruitment and retention are influenced by lifestyle preferences of younger physicians as well as an aging physician workforce. The document outlines various hospitalist roles and recruitment programs to attract physicians.
5 Trends to Watch in the Medical Device Industry in 2016Mercer Capital
Demographic shifts underlie the long-term market opportunity for medical device manufacturers. While efforts to control costs on the part of the government insurer in the U.S. may limit future pricing growth for incumbent products, a growing global market provides domestic device manufacturers with an opportunity to broaden and diversify their geographic revenue base. Developing new products and procedures is risky and usually more resource intensive compared to some other growth sectors of the economy. However, barriers to entry in the form of existing regulations provide a measure of relief from competition, especially for newly developed products.
Mercer Capital's Value Focus: Medical Device Manufacturers | Q4 2016 | Pfizer...Mercer Capital
Mercer Capital provides medical device manufacturers, related start-up enterprises, and private equity funds with valuation services, including purchase price allocation, 409a compliance, goodwill impairment testing, and other transaction and valuation advisory services.
Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
mHealth Israel_Japanese Medical Device Industry 2018_Miyahara Mitsuho, Direct...Levi Shapiro
Presentation about the Japanese Medical Device Industry by Miyahara Mitsuho, Director, METI- Ministry of Economy, Trade and Industry, Commerce and Information Policy Bureau, Medical and Assistive Device Industries Office
Key Issues on the Economics of Precision MedicineHEHTAslides
Paula Lorgelly gave a presentation on the key issues in the economics of precision medicine. She discussed how a decade ago, genome sequencing was very expensive and personalized medicine seemed unlikely. Now, testing is much cheaper and more widely used. However, challenges remain around valuing new elements of precision medicine, paying for value, and generating evidence of value. She argued that new ways of measuring value beyond QALYs may be needed, and that current systems incentivize pharmaceutical companies more than diagnostic innovation. Real-world data will also be important to address economic questions as vast amounts of clinical data are now available.
CMS(HK) - Investing in china healthcare golden decade-20120928Hubery Zhou
The document discusses investing opportunities in China's healthcare sector during its "golden decade" of reform. Key points include:
1) Healthcare reforms under China's 12th Five-Year Plan will continue to drive long-term growth through increased government spending and policy changes.
2) Near-term policy headwinds are expected to abate in the second half of 2012, allowing industry margins to recover.
3) The investment thesis focuses on industry leaders with strong R&D, distribution networks, and experience to navigate intensifying competition during the reforms.
IMS - Global Use of Medicines 2020 by Nitesh BheleNitesh Bhele
By 2020, global medicine use will reach 4.5 trillion doses, a 24% increase from 2015 levels. Over half of the world's population will consume over 1 dose per person per day, driven by increased access in large emerging markets like India, China, Brazil, and Indonesia. Developed markets will continue to use more branded and specialty medicines per capita, while emerging markets will see greater use of generics and over-the-counter drugs. New medicines introduced in the past 10 years will account for 0.1% of volumes in emerging markets versus 2-3% in developed markets.
The document provides an overview of the Indian pharmaceutical market. It discusses key trends in the market including its size, growth drivers, segments and future scope. Some of the main points covered are:
- The Indian pharma market is the 3rd largest by volume and 10th by value, with domestic sales of $6 billion and exports of $6.3 billion. It is expected to grow at 14% annually to $47 billion by 2018.
- Branded generics dominate at 90% of the market. Chronic therapies are growing faster than acute therapies. Rural markets represent 20% of the market currently and are seen as the next growth frontier.
- Key growth drivers include population expansion, a growing middle class
This document discusses how the global healthcare profit pool will shift between 2010 and 2020. It predicts that the total profit pool will grow at 4% annually from $520 billion to $740 billion over this period. However, profitability will decline for most players as the sources of growth and margins change significantly between sectors and regions. Innovative pharmaceutical and medical technology companies will see much slower growth and declining margins. In contrast, providers of healthcare delivery and lower-margin sectors like generics will capture a larger share of profits. To remain competitive, companies will need to develop new business models focused on improving healthcare delivery and outcomes rather than just generating more products and procedures.
This document discusses using ABC/XYZ analysis to aid in stock planning for a small retail enterprise. It first describes collecting sales data on 50 products over a month. It then performs an ABC analysis on the products based on their total sales value, grouping them into high-value category A products (26% of items, 80.08% of sales), medium-value category B products (38% of items, 14.54% of sales), and low-value category C products (36% of items, 5.38% of sales). Next, it performs an XYZ classification to further group products based on their sales rates, identifying high-rate category X products, average-rate category Y products, and low-rate category
The document discusses various inventory control techniques used in pharmacy practices such as ABC analysis, VED analysis, economic order quantity, and FSN analysis to classify inventory items and maintain optimal inventory levels. The goals of inventory control are to reduce costs, ensure adequate supply of drugs, and avoid stockouts while making efficient use of capital. Proper inventory control techniques are important tools for smooth operations and effective management of business enterprises.
China Healthcare Market potentials & opportunitiesritupon gogoi
China has a large and growing healthcare market due to its large population and strong economic growth. Healthcare expenditures as a percentage of GDP have been rising in China and are projected to reach $1 trillion by 2020. An aging population and rising rates of chronic diseases will drive further growth in healthcare spending. However, the Chinese healthcare market faces challenges from frequent changes in regulations, policies that favor domestic generic drugs over innovative medicines, and difficulties for foreign companies to gain inclusion on the national drug reimbursement list.
The document discusses strategies for successful global drug development. It focuses on navigating FDA accelerated approval programs, new frontiers in personalized medicine, and evolving regulatory paradigms for digital health. The presentation provides an overview of key FDA expedited programs like fast track designation and breakthrough therapy designation. It also examines how regulators are adapting approaches to personalized medicine and digital health technologies.
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro DiagnosticsSolidiance
With the increasing economic growth and demographic changes in Myanmar, expenditure in the healthcare landscape is set to rise exponentially by the growing awareness of regular check-up for early detection of non-communicable diseases. The country is also witnessing rapid growth in healthcare demand which inevitably results in the development of the healthcare system. These shifts are creating emerging opportunities for private healthcare companies, especially in the Diagnostic Imaging (DI) and In Vitro Diagnostics market. However, demand for better healthcare services are increasing faster than supply, requiring global healthcare players to have a long strategic view of the market. This white paper analyses these trends and provides strategic insights to create a sustainable long term strategy to capitalize on these opportunities.
Healthcare in china - Entering uncharted waters (McKinsey September 2012)Franck Le Deu
The healthcare market in China continues to grow rapidly due to favorable demographic and economic trends. However, the path forward will become more challenging as the system undergoes significant reforms. While opportunities remain for multinational companies, increased competition from local players and pressure on pricing will make it difficult for late entrants to achieve success. To navigate these "uncharted waters", companies must consider principles like adapting business models to the reforms and finding ways to innovate that satisfy both commercial and policy objectives.
This document introduces the importance of research, development and evaluation strategies for advancing the global pharmaceutical workforce agenda. It discusses how global health organizations are promoting workforce development to achieve universal health coverage and sustainable development goals. It outlines FIP's adoption of a global vision and Pharmaceutical Workforce Development Goals to guide the transformation of the pharmaceutical workforce. The document argues that research, development and evaluation are integral to implementing this agenda and achieving progress on the goals. It provides context on global health strategies and highlights the need for countries to develop aligned national strategies to scale up their pharmaceutical workforces.
Thailand has a highly developed healthcare industry that provides first-class medical services at affordable prices. It has over 1,000 public and 400 private hospitals that meet international standards, as well as physicians with overseas training. Private hospitals have cutting-edge medical equipment. Each year, Thailand attracts almost 2 million medical tourists due to its reputation for quality care at low costs compared to other countries. The medical device and pharmaceutical industries are also growing in Thailand due to opportunities for manufacturing and R&D. The government offers incentives for healthcare investments through the Board of Investment.
Aligning on Patient Outcomes - How Market Dynamics Can Facilitate RWD SolutionsPAREXEL International
This document discusses how real-world data can be used to better understand patient outcomes. It notes that legislation, technology advances, and a shift toward valuing outcomes over volume are accelerating the focus on using real-world data to determine what treatment approaches improve patient outcomes. The document outlines challenges to using real-world data like data quality issues and privacy concerns, and proposes strategies like using hybrid study designs that combine electronic medical record data with traditional clinical trial data collection to help overcome these challenges. Finally, it emphasizes that solutions in this area will need to be developed incrementally while protecting patient privacy and gaining regulatory acceptance.
This document provides an overview of hospitalist careers, including definitions, history, workforce facts and trends, recruitment considerations, and factors influencing physician career decisions. It discusses the growth of hospitalists from a few hundred in 1996 to over 30,000 currently practicing in the US. Hospitalists typically work block schedules without taking call and have opportunities in clinical work as well as leadership roles. Recruitment and retention are influenced by lifestyle preferences of younger physicians as well as an aging physician workforce. The document outlines various hospitalist roles and recruitment programs to attract physicians.
5 Trends to Watch in the Medical Device Industry in 2016Mercer Capital
Demographic shifts underlie the long-term market opportunity for medical device manufacturers. While efforts to control costs on the part of the government insurer in the U.S. may limit future pricing growth for incumbent products, a growing global market provides domestic device manufacturers with an opportunity to broaden and diversify their geographic revenue base. Developing new products and procedures is risky and usually more resource intensive compared to some other growth sectors of the economy. However, barriers to entry in the form of existing regulations provide a measure of relief from competition, especially for newly developed products.
Mercer Capital's Value Focus: Medical Device Manufacturers | Q4 2016 | Pfizer...Mercer Capital
Mercer Capital provides medical device manufacturers, related start-up enterprises, and private equity funds with valuation services, including purchase price allocation, 409a compliance, goodwill impairment testing, and other transaction and valuation advisory services.
Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
mHealth Israel_Japanese Medical Device Industry 2018_Miyahara Mitsuho, Direct...Levi Shapiro
Presentation about the Japanese Medical Device Industry by Miyahara Mitsuho, Director, METI- Ministry of Economy, Trade and Industry, Commerce and Information Policy Bureau, Medical and Assistive Device Industries Office
Key Issues on the Economics of Precision MedicineHEHTAslides
Paula Lorgelly gave a presentation on the key issues in the economics of precision medicine. She discussed how a decade ago, genome sequencing was very expensive and personalized medicine seemed unlikely. Now, testing is much cheaper and more widely used. However, challenges remain around valuing new elements of precision medicine, paying for value, and generating evidence of value. She argued that new ways of measuring value beyond QALYs may be needed, and that current systems incentivize pharmaceutical companies more than diagnostic innovation. Real-world data will also be important to address economic questions as vast amounts of clinical data are now available.
CMS(HK) - Investing in china healthcare golden decade-20120928Hubery Zhou
The document discusses investing opportunities in China's healthcare sector during its "golden decade" of reform. Key points include:
1) Healthcare reforms under China's 12th Five-Year Plan will continue to drive long-term growth through increased government spending and policy changes.
2) Near-term policy headwinds are expected to abate in the second half of 2012, allowing industry margins to recover.
3) The investment thesis focuses on industry leaders with strong R&D, distribution networks, and experience to navigate intensifying competition during the reforms.
IMS - Global Use of Medicines 2020 by Nitesh BheleNitesh Bhele
By 2020, global medicine use will reach 4.5 trillion doses, a 24% increase from 2015 levels. Over half of the world's population will consume over 1 dose per person per day, driven by increased access in large emerging markets like India, China, Brazil, and Indonesia. Developed markets will continue to use more branded and specialty medicines per capita, while emerging markets will see greater use of generics and over-the-counter drugs. New medicines introduced in the past 10 years will account for 0.1% of volumes in emerging markets versus 2-3% in developed markets.
The document provides an overview of the Indian pharmaceutical market. It discusses key trends in the market including its size, growth drivers, segments and future scope. Some of the main points covered are:
- The Indian pharma market is the 3rd largest by volume and 10th by value, with domestic sales of $6 billion and exports of $6.3 billion. It is expected to grow at 14% annually to $47 billion by 2018.
- Branded generics dominate at 90% of the market. Chronic therapies are growing faster than acute therapies. Rural markets represent 20% of the market currently and are seen as the next growth frontier.
- Key growth drivers include population expansion, a growing middle class
This document discusses how the global healthcare profit pool will shift between 2010 and 2020. It predicts that the total profit pool will grow at 4% annually from $520 billion to $740 billion over this period. However, profitability will decline for most players as the sources of growth and margins change significantly between sectors and regions. Innovative pharmaceutical and medical technology companies will see much slower growth and declining margins. In contrast, providers of healthcare delivery and lower-margin sectors like generics will capture a larger share of profits. To remain competitive, companies will need to develop new business models focused on improving healthcare delivery and outcomes rather than just generating more products and procedures.
This document discusses using ABC/XYZ analysis to aid in stock planning for a small retail enterprise. It first describes collecting sales data on 50 products over a month. It then performs an ABC analysis on the products based on their total sales value, grouping them into high-value category A products (26% of items, 80.08% of sales), medium-value category B products (38% of items, 14.54% of sales), and low-value category C products (36% of items, 5.38% of sales). Next, it performs an XYZ classification to further group products based on their sales rates, identifying high-rate category X products, average-rate category Y products, and low-rate category
The document discusses various inventory control techniques used in pharmacy practices such as ABC analysis, VED analysis, economic order quantity, and FSN analysis to classify inventory items and maintain optimal inventory levels. The goals of inventory control are to reduce costs, ensure adequate supply of drugs, and avoid stockouts while making efficient use of capital. Proper inventory control techniques are important tools for smooth operations and effective management of business enterprises.
XYZ & ABC analysis are inventory management techniques. XYZ analysis classifies inventory based on stock value and customer demand, and when combined with FSN analysis identifies slow-moving items. ABC analysis classifies raw materials based on consumption value, with 5-10% of A items accounting for 60-80% of spending, 10-30% of B items for 10-30% of spending, and 60-85% of C items for 5-15% of spending.
ABC analysis is an inventory categorization method that divides items into categories (A, B, C) based on their value. Category A items are the most valuable, accounting for 10-20% of inventory items but 70-80% of total value. Category C items are the least valuable, accounting for 50% of items but only 5% of value. The analysis aims to draw attention to critical high-value items rather than trivial low-value ones. Items are categorized based on their annual consumption value, with different management and review policies applied to each category.
This document discusses inventory management techniques. It begins by explaining that inventory is a significant current asset that requires management to avoid unnecessary investment of funds. It then defines inventory control measures like order size, safety stock, and reorder points. It discusses the different types of inventories and the various reasons companies hold inventory. The objectives and techniques of effective inventory management are outlined, including determining economic order quantity and reorder points. ABC analysis is presented as a case study, classifying inventory into categories based on value to prioritize control efforts.
The document discusses various inventory analysis techniques including ABC analysis, VED analysis, and combining ABC and VED analysis. ABC analysis classifies inventory based on annual consumption value, while VED analysis classifies based on an item's criticality. The document recommends combining ABC and VED analysis to further classify inventory into nine categories to focus management efforts. Hospitals can use this combined analysis to prioritize inventory and determine optimal order timing and sizing.
Canada's clinical diagnostics is expected to witness significant growth from $3.9 Bn in 2022 to $4.9 Bn in 2030 with a CAGR of 3.1% for the year 2022-30. The main growth drivers of the Canadian clinical diagnostics market are growing awareness about early disease detection and the benefits of early treatment. Further, the increasing investments by the government in diagnostic services are responsible for the market growth.To get a detailed report, contact us at - info@insights10.com
Global Clinical Trial Patient Recruitment Services Market Analysis Sample ReportInsights10
The Global clinical trial patient recruitment services market is projected to grow from $ 0.84 Mn in 2022 to $1.56 Bn by 2030, registering a CAGR of 8% during the forecast period of 2022-30. The Global clinical trial patient recruitment services market is a rapidly growing market that provides services to support the recruitment of patients for clinical trials. To get a detailed report, contact us at - info@insights10.com
Canada Clinical Diagnostics Market Sample Report 2022 to 2030Insights10
Canada's clinical diagnostics is expected to witness significant growth from $3.9 Bn in 2022 to $4.9 Bn in 2030 with a CAGR of 3.1% for the year 2022-30.
By 2030, it is anticipated that the UAE nutrition and supplements market will reach a value of $3.94 Bn from $1.91 Bn in 2022, growing at a CAGR of 9.5% during 2022-30. The market is primarily dominated by local players such as Vitabiotics Ltd, Bayer Middle East, and Forever Living Products. To get a detailed report, contact us at - info@insights10.com
Part 1 Interest RatesMacroeconomic factors that influence inter.docxssuser562afc1
Part 1: Interest Rates
Macroeconomic factors that influence interest rates in general
The variables influencing microfinance interest rates for MFIs can be characterized into two general gatherings: 1) interior – the components MFIs can impact: for example work costs, specialized help, creations; or 2) outer – political risks, full scale factors, authoritative risk, and four fundamental parts reflected in the microfinance interest rates: working costs, cost of assets, advance misfortune costs, and benefit. Working expenses speak to around 60 % of the all out MFI costs and generally rely upon the credit size, age, area and customer's appraising, and so on.
Macroeconomic factors is your industry most sensitive
Like most businesses, the carrier business is affected by the monetary cycle's pinnacles and troughs. The present development in created economies—like the U.S. that is driven by the extricating money related strategy—has brought about an ascent in business certainty, mechanical creation, and universal exchange.
Impacts on the interest rates experienced within your chosen industry
In any industry, the economy assumes a urgent job that incorporates the general development of the division, and common flight, with the ever-developing interest, is no special case. To give a major picture, Airbus GMF 2016 evaluations the 20-year interest for new traveler and cargo airplane to be a little more than 33,000 airplane comprising a market estimation of over USD $5.2 trillion underlining and setting up the effect of market development.
Part 2: Stock Valuation, Risk and Returns
Stock Valuation. As indicated by the Bureau of Economic Analysis (or BEA), the genuine total national output (or GDP) expanded 4% every year in 2Q14 in the wake of diminishing 2.1% in 1Q14. With financial and modern development, work rates have expanded. This has prompted higher genuine extra cash.
From Video
My company doesn't have stocks right now, so I'll use Costco Wholesale as an example to explain the stock valuation. Future Costco Wholesale Corp stock predictions formula:
P0 = Div1 / (r – g)
P0 = Stock Price;
Div1= Estimated dividends for the next period;
r = Required Rate of Return;
g = Growth Rate
In this formula, we need to know the value of estimated dividends for the next period; required rate and return as well as growth rate. Let’s get each number individually.
g: Growth Rate = Retention Ratio x ROE
0.52 x 0.24 = 0.1248
r: Required Rate of Return.
R = D / P0 + g
0.65 / 296.09 + 0.1248 = 0.1269
Div1: Estimated dividends for the next period is 65c. Therefore, the future Costco Wholesale Corp stock predictions are:
P0 = Div1 / (r – g)
0.65 / 0.0021 = $309.52
The present stock worth and the assessed stock worth utilizing the Dividend Discount Model is higher on account of the contenders are attempting to get into the membership segment showcase. Likewise, Amazon and Sam's club have improved their online store distribution centers. So all in all, financing an organi.
Part 1 Interest RatesMacroeconomic factors that influence inter.docxkarlhennesey
Part 1: Interest Rates
Macroeconomic factors that influence interest rates in general
The variables influencing microfinance interest rates for MFIs can be characterized into two general gatherings: 1) interior – the components MFIs can impact: for example work costs, specialized help, creations; or 2) outer – political risks, full scale factors, authoritative risk, and four fundamental parts reflected in the microfinance interest rates: working costs, cost of assets, advance misfortune costs, and benefit. Working expenses speak to around 60 % of the all out MFI costs and generally rely upon the credit size, age, area and customer's appraising, and so on.
Macroeconomic factors is your industry most sensitive
Like most businesses, the carrier business is affected by the monetary cycle's pinnacles and troughs. The present development in created economies—like the U.S. that is driven by the extricating money related strategy—has brought about an ascent in business certainty, mechanical creation, and universal exchange.
Impacts on the interest rates experienced within your chosen industry
In any industry, the economy assumes a urgent job that incorporates the general development of the division, and common flight, with the ever-developing interest, is no special case. To give a major picture, Airbus GMF 2016 evaluations the 20-year interest for new traveler and cargo airplane to be a little more than 33,000 airplane comprising a market estimation of over USD $5.2 trillion underlining and setting up the effect of market development.
Part 2: Stock Valuation, Risk and Returns
Stock Valuation. As indicated by the Bureau of Economic Analysis (or BEA), the genuine total national output (or GDP) expanded 4% every year in 2Q14 in the wake of diminishing 2.1% in 1Q14. With financial and modern development, work rates have expanded. This has prompted higher genuine extra cash.
From Video
My company doesn't have stocks right now, so I'll use Costco Wholesale as an example to explain the stock valuation. Future Costco Wholesale Corp stock predictions formula:
P0 = Div1 / (r – g)
P0 = Stock Price;
Div1= Estimated dividends for the next period;
r = Required Rate of Return;
g = Growth Rate
In this formula, we need to know the value of estimated dividends for the next period; required rate and return as well as growth rate. Let’s get each number individually.
g: Growth Rate = Retention Ratio x ROE
0.52 x 0.24 = 0.1248
r: Required Rate of Return.
R = D / P0 + g
0.65 / 296.09 + 0.1248 = 0.1269
Div1: Estimated dividends for the next period is 65c. Therefore, the future Costco Wholesale Corp stock predictions are:
P0 = Div1 / (r – g)
0.65 / 0.0021 = $309.52
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Operating Budgets
Budget TypesAn organization’s objectives define specific activitieshow they are assembledlevels of operationWhile an organization’s performance standards set out performance levelsA budget quantifies these activities into financial terms.
Budget Process Objectives
Objectives should provide:Written expression, quantified, of policies and plansBasis to evaluate financial performance according to policies and plans Useful tool for cost controlCreation of cost awareness throughout the organization
Budget Types
There are basic differences between two budget types:Operating budgetsCapital expenditure budgets
Operating BudgetsDeal with actual short-term operating revenues and operating expensesGenerally cover the next year (a 12-month period)
Capital Expenditure BudgetsDeal with capital expenditures for the organization (not operating revenues or expenses)May also cover the next year, but with a futuristic view; may cover a five- or even
ten-year period
Responsibility CentersCost Centers (manager responsible for controlling costs)Profit Centers (manager responsible for both costs and revenue)
Budget ViewpointsTransactions outside the operating budget may include:Grants received by the organization Foundation transactionsSo if transactions are “outside,” they would not be part of the operating budget.
Budget ViewpointsGrants received by the organization may have restricted funds that require separate accounting.If so, the separate accounting requirement generally means their transactions will be outside the operating budget.
Budget ViewpointsFoundation transactions should require separate accounting because the foundation will be a legally separate organizationThe separate accounting requirement should mean their transactions will be outside the operating budget.
Identifiable Versus Allocated
Budget CostsWithin a departmental budget, certain costs will be specifically identifiable while others will be allocated instead.
Budget Basics Review
Regarding Identifiable versus Allocated Budget Costs: Mostly identifiable = Direct patient care and supporting patient careUsually allocated = general and administrative expense and patient related expenseMaybe not included at all in a manager’s budget = financial related expense
Fixed Versus Variable CostsVariable cost rises or falls in proportion to a rise or fall in volume. (Examples of volume: number of procedures or number of patient days.)Fixed cost does not change even though volume rises or falls within a wide range.
Building an Operating Budget: Construction PhasesPlan Gather informationPrepare input Construct/submit draft version of budgetMake required revisions to draftPresent preliminary budgetMake required revisions to preliminary Submit final budget
Building an Operating Budget: Construction ElementsFormat to be used Budget scopeAvailable resources Levels of reviewTime frame
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DhawalBhatia Internship document
1. ST. JOSEPH’S COLLEGE OF BUSINESS ADMINISTRATION
18 Residency Road, Bangalore 560025
A Comprehensive Study on Inventory Classification
Techniques in Narayana Health City
Project Report
Submitted in partial fulfilment of the requirements
for the award of
The Post Graduate Diploma in Management
(A TWO YEAR FULL TIME PROGRAM IN MANAGEMENT)
Submitted by:
Dhawal N. Bhatia
Reg. No: 14010
PGDM 2014-16
2. ST. JOSEPH’S COLLEGE OF BUSINESS ADMINISTRATION
18 Residency Road, Bangalore 560025
CERTIFICATE
This is to certify that the project report entitled:
“A Comprehensive Study on Inventory Classification
Techniques in Narayana Health City.” is an authentic record
of the project work carried out by Mr. Dhawal N Bhatia (Reg
No. 14010), in partial fulfilment of the requirements for the
award of The Post Graduate Diploma in Management.
Mr. Lawrence V. J.
Faculty Member
Rev. Dr. S Peter S. J. Prof. Edwin Castelino
Director Dean
3.
4.
5. ACKNOWLEDGEMENT
I would like to thank Mr. Srinivas V Rao (General Manager for
Materials Management), for his valuable support to make the
study possible. I would also like to thank Mrs. Ancy Prince
(Senior Manager-Material Management), Mr. Manas
Bhattacharjee (Inventory head – India region, NH group of
Hospitals) for their valuable support.
I would also like to thank Mr. P. Jagat Jyothi Reddy and Mr.
Veskatesh Murthy, Mr. V Baskaran, Mr Harshavardhana Naidu,
without which this work would not have been possible.
Mr V.J.Lawrence, Faculty, St. Joseph’s College of Business
Administration for his wholehearted cooperation, constant
guidance and support during the study.
Dhawal N Bhatia
6. Table of contents: Page Numbers
Chapter 1: Industry and Company overview……………………… 1.1-1.11
Global Scenario
Indian Scenario
Narayana Health City
Chapter 2: Introduction to Project ……………………………………2.1-2.9
Statement to the project
Introduction
Chapter 3: Design of Study……………………………………………3.1-3.8
Objective of study
Scope of study
Methodology
Plan of Analysis
Tools and Techniques for data collection
Limitations
Chapter 4: Analysis of Data…………………………………………….4.1-4.8
Inventory Components
Data Analysis:
1. For Cardiac unit
2. For Multispecialty unit
3. For Main Store
Chapter 5: Findings and Recommendations………………………….5.1-5.5
General measures
Control Measures
Non-moving Analysis
Conclusion
Bibliography
7. List of all figures: Page Numbers
1. Global Healthcare Expenditure 1.4
2. Market breakup by revenues 1.5
3. Share in healthcare spent in India, 2015 1.6
4. Healthcare expenditure as percentage of GDP 1.7
5. Health expenditure per capita (US $) 1.7
6. Healthcare growth trend (USD Billion) 1.8
7. Classification of Inventory 4.2
List of tables: Page Numbers
1. Description of Classification techniques 2.7
2. Format for ABC analysis 3.4
3. Format for XYZ analysis 3.5
4. Format for HML analysis 3.5
5. MBASIC model 3.7
6. Abstract for Cardiac unit ABC analysis 4.3
7. Abstract for Cardiac unit FSN analysis 4.3
8. Abstract for Cardiac unit HML analysis 4.3
9. Abstract for Cardiac unit VED analysis 4.3
10. Abstract for Cardiac unit XYZ analysis 4.3
11. Abstract for Cardiac unit MBASIC analysis 4.4
12. Abstract for MSH unit ABC analysis 4.5
13. Abstract for MSH unit XYZ analysis 4.5
14. Abstract for MSH unit VED analysis 4.5
15. Abstract for MSH unit FSN analysis 4.5
16. Abstract for MSH unit HML analysis 4.5
17. Abstract for MSH unit MBASIC analysis 4.6
18. Abstract for Main store ABC analysis 4.7
19. Abstract for Main store XYZ analysis 4.7
20. Abstract for Main store FSN analysis 4.7
21. Abstract for Main store VED analysis 4.7
22. Abstract for Main store HML analysis 4.7
23. Abstract for Main store MBASIC analysis 4.8
24. Control measures of designed MBASIC model 5.3
25. Breakup item for cardiac unit 5.4
26. XYZ vs HML analysis for cardiac unit 5.4
27. Breakup item for MSH unit 5.4
28. XYZ vs HML Analysis for MSH unit 5.4
29. Breakup item for Main Store 5.5
30. XYZ vs HML Analysis for Main Store 5.5
8. Executive Summary
Executive Summary
The objective is to study the existing system of inventory management practices in the
existing structure of hospitals a case and suggest improvement in inventory to minimize
over stocking or under stocking by making use of certain inventory control tools and
techniques such as
Selective control practices like ABC, HML, XYZ, FSN analysis.
Application Multiple Basis Approach to Selective Inventory Control as an effective
tool for an efficient inventory management.
Lead time analysis, Reordering procedures.
Fixation of service levels etc.
By applying above stated inventory tools and techniques it is expected that substantial
reduction in average inventories can be achieved and there by liberate locked up money
in shape of inventory.
10. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 2
GLOBALSCENARIO:
Across the globe, governments, health care delivery systems, insurers, and
consumers are engaged in a persistent tug-of-war between competing priorities i.e.
meeting the increasing demand for health care services and reducing the rising cost
of those services. Health spending is estimated to have increased by 2.8 percent to
total $7.2 trillion, or 10.6 percent of global gross domestic product (GDP). Health
spending is expected to accelerate, rising an average of 5.2 percent a year in 2014-
2018, to $9.3 trillion. This increase will be driven by the health needs of aging and
growing populations, the rising prevalence of chronic diseases, emerging-market
expansion, infrastructure improvements, and treatment and technology advances.
Yet even as demand rises, the pressure to reduce costs and demonstrate value is
intensifying.
Contradictory forces influence health care spending:
• Aging populations
• Growth of emerging markets
• Advances in treatments
• Health care cost reduction pressure
Despite an overall focus on cost containment, some markets are projected to experience
rapid spending growth as public and private health care systems develop. This
expansion in developing markets — especially in Asia and the Middle East — may bring
opportunities for international hospital chains, pharmaceutical and medical technology
companies seeking geographic and revenue growth. Globalization, however, is likely to
bring problems, too, as countries struggle to make sure they have sufficient health care
workers, facilities, and supplies to care for patients at a manageable cost. The growing
complexity of treatments, population aging, and public health outbreaks, such as the
current Ebola crisis in Africa, will add to clinical and cost pressures. As they endeavour
to balance competing priorities, health care stakeholders are also working to achieve
common goals: innovate in new and exciting ways, and generate scientific, medical, and
care delivery breakthroughs that can improve the health of people worldwide. This 2015
global health care outlook examines the current state of the sector, describes the top
issues facing stakeholders, and suggests considerations for the future.
11. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 3
Current and projected health care spending
Most of the world’s regions are facing a formidable challenge to manage the rapidly
increasing cost of health care.
1. Spending in North America is anticipated to grow an average of 4.9 percent annually
in 2014-2018, driven partly by the expansion of insurance coverage under the United
States’ implementation of the 2010 Patient Protection and Affordable Care Act (ACA).
2. U.S. health care spending, already the highest in the world, is likely to reach 17.9
percent of GDP by 2018.
3. Canada is expected to see slightly slower growth — 4.5 percent annually in local-
currency terms in 2014-2018, reaching 11.6 percent of GDP7 — although its regional
fragmentation makes coordinated cost controls difficult.
4. Western Europe’s strengthening but uneven economic recovery should ease some of
the pressures on the region’s health care systems. However, the continued need to
reduce debt and fiscal deficits is expected to constrain public health care spending to
just 2.4 percent annually over 2014-2018. Budgets are tightest in some of those
countries most affected by the euro zone crisis — Greece, Portugal, and Spain — where
governments are pushing through reforms that will replace the current two-tier
public/private system with one universal health care fund. Northern European markets,
including the UK, Germany, and Sweden, are expected to see a more robust recovery in
health care spending by 2018.
5. Russia’s health care spending is expected to decline in 2014-2018 from an average of
7.5 percent a year to 6.4 percent, reflecting the political tensions with Ukraine and their
detrimental effect on the Russian currency and economy.
6. Across Latin America, health care spending is projected to increase an average of 4.6
percent annually over 2014-2018; several governments are trying to improve public
12. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 4
health care systems amid general budget constraints.
7. In Mexico, health care spending has grown steadily in recent years and is projected to
rise annually by 8.2 percent in 2014-2018, to reach seven percent of GDP, up from 6.8
percent in 2013. The Mexican government has reinforced its commitment to unify
existing public health care services into a universal social service in the next five years.
Health care spending in Brazil has increased in recent years in GDP terms, attributable
to consumers’ rising disposable incomes and higher public health care expenditures.
8. Brazil’s total 2013 health care spending is estimated at 9.1 percent of GDP, according
to the World Health Organization (WHO). While this spending rate is higher than the
Latin American average, it is expected to remain constant to 2018.
9. In Asia and Australasia, the rollout of public health care programs combined with
growing consumer wealth are anticipated to boost health care spending an average of
8.1 percent in 2014–2018. The strongest growth, at 15.2 percent a year, will be in India,
with China following at 12.5 percent a year.
The following graph shows the Global healthcare expenditure for dominant nations
across the world.
3.9
4.1
2.1
6.5
9.4
10
10.9
17.7
0 5 10 15 20
India
Thailand
China
Global (median)
UK
Japan
Canada
USA
Fig1: Global Healthcare Expenditure
Percentage
13. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 5
INDIAN SCENARIO:
Healthcare market in India is valued at USD 1.3 billion at the end of 2014. It is expected
to be of USD 280 billion, market value by the end of 2020. Rising incomes, greater
health awareness and lifestyle disease with increasing access to insurance will
contribute to growth of sector. Investment in healthcare infrastructure is set to rise. India
has become largest exporter of formulations with 14 percent market share and 12th
in
the world in terms of export value. Availability of large pool of well trained professionals
in the country. India has an advantage over its peers in the West and Asia in terms of
cost of high-quality medical services offered. India is well supported by the government
and is set to be as global healthcare hub. Creation of new drug testing laboratories and
further strengthening of the 31 existing state laboratories will help in achieving the above
title. Apollo Hospitals (AHEL), Fortis Hospitals Ltd (FHSL) are a few major players in the
Indian healthcare industry.
I believe the aggressive, debt-funded expansion plans of these entities; delays in
receiving payments and tough competition from national-level players are the main
deterrents for the industry. Of the total healthcare revenues in the country, Hospitals
account for 71 percent, Pharmaceuticals for 13 percent and medical equipment and
supplies for 9 percent of revenues. FDI Policy is very liberal for hospitals. FDI is
permitted up to 100 percent under the automatic route for the hospitals sector in India.
This has driven the growth of the healthcare sector in last decade.
71%
13%
9%
4%3%
Fig2: Market breakup by revenues
Hospital
Pharmaceutical
Medical Equipment & Supplies
Medical Insurance
Diagnostics
14. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 6
Private sector has a strong influence in INDIAN sector. It has emerged as a vibrant force
in India’s healthcare industry, lending it both national and international repute. Large
investments by private players are likely to contribute significantly to the development of
India’s hospital industry, which comprises around 80 percent of the total market. Private
Healthcare in India accounts for around 72 percent of the country’s total healthcare
expenditure. Private sector’s share in hospitals and hospitals beds is estimated to be 74
percentages and 40 percentages respectively. The main factor contributing to rising
medical tourism in India is presence of a well-educated, English-speaking medical staffs
in a state of art private hospitals and diagnostics facilities.
The public sector accounts for only around 30 per cent of the total healthcare
expenditure in India; this is amongst the lowest in the world. By contrast, the world
median for government expenditure on healthcare, as a percentage of total expenditure,
stands at 61.6 per cent as per the WHO's 2014 report. The private sector in India
comprises assorted providers such as not-for-profit and voluntary organisations,
providers with a commercial motive including corporate houses, trusts, stand-alone
specialist services, diagnostic laboratories and pharmacies.
As per the data collected by world bank, following graphs reveals that India stands in a
meaner position compared to other countries in the world. Indian healthcare expenditure
as percentage of GDP for last few years.
19%
40%
11%
30%
Fig3: Shares in healthcare spent in India, 2015
Government hospital
Top-tier
Mid-tier
Nursing homes
15. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 7
Health expenditure per capita (US $) in healthcare in India.
The healthcare industry is divided into following segments:
1. Hospitals: It includes private hospitals and government healthcare centres,
district hospitals and general hospitals.
2. Pharmaceutical: It includes manufacture, extraction, processing, purification and
packaging of chemical materials for use as medication for humans or animals.
3. Diagnostics: It comprises businesses and laboratories that offer analytical or
diagnostics services, including body fluid analysis.
4. Medical equipment and supplies: It includes establishments primary
3.8 3.8 3.8 4
5.2
0
1
2
3
4
5
6
1995-99 2000-04 2005-09 2010-14 2015-16P
Fig4: Healthcare expend as percentage of GDP
Percentage
54
61
58
61
88.7
0
10
20
30
40
50
60
70
80
90
100
1995-99 2000-04 2005-09 2010-14 2015-16P
Fig5: Health expenditure per capita (US $)
US $
16. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 8
manufacturing, medical equipment and supplies, e.g. surgical, dental,
orthopaedic, laboratory instruments etc.
5. Medical Insurance: It includes health insurance and medical reimbursement
facility, covering an individual’s hospitalisation expenses incurred due to sickness.
6. Telemedicine: Telemedicine has enormous potential in meeting the challenges of
healthcare delivery to rural and remote areas besides several other applications
in education, training and management in health sector.
Healthcare has become one of the largest sectors both in terms of revenue and
employment. The industry is growing at a tremendous pace owing to its strengthening
coverage, services and increasing expenditure by public as well as private players.
During 2008-20, the market is expected to record a CAGR of 17 percent. The total
industry size is expected to touch USD 160 billion by 2017 and USD 280 by 2020.
The major players in the Indian market are as follows:
1. Fortis Healthcare Ltd: 12,000 beds
2. Apollo Hospitals Enterprise Ltd: 8,717 beds
3. Narayana Health: 7,500 beds
4. Manipal Group of Hospitals: 4,900 beds
5. Aravind Eye Hospitals: 3,649 beds
6. Max Hospitals: 1,973 beds
7. Care hospitals: 1,912 beds
45 51.7 59.5 68.4 72.8 81.3
160
280
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2014 2017P 2020P
Fig6: Healthcare growth trend (USD Billion)
Industry Size
17. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 9
Narayana Health is one of India’s largest healthcare service providers. It started in 2001
with 225 beds under the supervision of Dr Devi Prasad Shetty. It is accredited by NABH.
It has 29 existing hospitals in 17 cities with 7500 beds and 15000 associates and 1500
full time doctors. It is popular as one the world’s most economical hospitals. Narayana
Health is committed to creating an affordable, global- benchmarked quality- driven
healthcare services model.
Its vision is:
“High Quality Healthcare with care and compassion at an affordable cost on a large
scale”.
Its Values are represented by “iCare”.
Innovative & efficiency
Compassionate care
Accountability
Respect for all
Excellence as a culture
In a typical day Narayana Health is provides the following:
558 inpatient admissions.
150 major surgeries.
44 cardiac surgeries.
4200 outpatients.
250 cardiac procedures.
417 dialysis procedures.
13 neuro surgeries.
1 kidney transplant.
13200 laboratory tests.
18. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 10
Fig 7: NH INDIA PRESENCE:
19. Industry and Company Overview
A Comprehensive Studyin Inventory Classification Techniques in Narayana Health City Page 11
Narayana Health City is located in Bangalore. It has three hospitals inside it namely:
Cardiac Unit
Multi-speciality Unit
Narayana Eye speciality Unit
Main Store is located in the basement of the cardiac hospital which supplies
inventory to all other hospitals in the health city. It also supplies items to various
other facilities in India. Its major use is for fetching supplies for use within the health
city. Some items are not available at all locations in India at various facility, so main
store fetches it for them.
Inside cardiac Unit, following are major consuming departments:
AITU Store
CathLabs
OT store
Ward store
Inside Multi speciality, following are major consuming departments:
IP pharmacies
OT stores
Nephrology
Major revenue is generated for the health city by Cardiac and Multispecialty units.
So it is of great importance to study both the units along with the Main store.
21. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 2
STATEMENT OF THE PROJECT
Hospitals today have to meet the needs of patients and the total focus has shifted to
patient centric services instead of only medical and surgical therapies. Pharmacy is
one of the major areas of hospital operations. The basic issue is how to manage
stocks at the required levels and monitoring at regular intervals using scientific
methods of inventory to minimize the cost without compromising quality of service.
New drugs have been entering into the market, and hospitals procure thousands of
different types of drugs. They need to develop an effective mechanism in order to
enforce control and to ensure the best results. The inpatient pharmacy under study
holds 4500 items for health city. Hence it is proposed study inventory management
practices so as to suggest stocking policies for different classes of items to enhance
profitability of the organisation and to improve upon decision making process for
procurement.
22. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 3
INTRODUCTION TO THE PROJECT
Hospital Logistics and supply chain are the corner stones on which continuous
quality of patient care depends. Today materials management has assumed
multifaceted roles and dimensions. In the past, health care institutions performed just
the function of receipt, storage and issues, where a today stores have
metamorphasized into key centres for cost reduction, productivity, effectivity and
efficiency in provision of health care. Supply chain Management is an important
concept; it ensures the delivery of important product in right quantity, condition at
right place at right time to ensure its best use for right customer at an affordable cost.
Supply chain Management coordinates and integrates all these activities into a
seamless process where all components of chain like vendors , carriers and third
party logistics companies are tied together to achieve the common goals. It
encompasses all elements of sourcing, indenting, procuring, production scheduling,
order processing, inventory management, transportation, warehousing and customer
service as well as the information and monitoring system. Streamlining the supply
chain is a strategic focus that will greatly aid a hospitals ability to compete in future.
The supply chain management applies analytical skills, process expertise, and
management vision to optimize the supply chain. It helps to reduce expenses by
analysing and revising processes for selecting and using supplies and drugs,
contracting, purchasing, storing, managing inventory and distributing. It identifies
waste, inefficiencies, redundancies and determines appropriate opportunities for
integration, consolidation and centralization.
In Inventory Management, materials are classified in order to exercise effective
managerial control in terms of value of consumption, criticality, cost etc. It would be
very expensive to critically analyse all the items individually and exercise control over
them. Concentrating on all items would dilute the effect of the entire control process.
Inventory Management plays a pivotal role in the effective management of supply
chain. The present study is based on pharmacy units in the hospitals and the main
store. The pharmacy units are one of the key components of hospitals as cost
centre, which transacts all categories of pharmacy items including life savings
products.
23. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 4
The aim of running a pharmacy is to:
1. Provide standard drugs and medicines to the patients.
2. Facilitate easy and immediate access to these drugs.
3. Maintain an optimum stock level of drugs.
The goal of any pharmacy is to ensure the community is provided with the service. It
needs at an acceptable level of quality and at an optimum cost. The hospital
pharmacy is indispensable for the treatment of patients, and efficiency in the field
would help in achieving this by determining the categories of stock required in terms
of quantity from various sources at low prices. The hospital generates major
revenues from the Inpatient pharmacy, which provides its services to the patients
admitted in the hospital. The primary data is collected for one year and the scientific
methods of inventory management are used. Various inventory techniques are used
to classify the items and the strategies in brief stating the stocking policies for each
class items, level of managerial response etc. to have an effective inventory
management.
Most purchases are one in character. The user sends requisition to the purchase.
The item is bought and delivered to the requisitioned that uses it immediately. The
entire cycle may be repeated if the user asks for same or other items subsequently.
However, if the need for the item recurs on a regular basis it is costly to treat each
purchase as if it is was being made just once. In a typical hospital about 15 percent
of all purchase orders and much higher percentage of purchase value go for items
for which there is continuous demand those are bought relatively in large quantities
and carried in inventory until there is demand for them. While it is convenient to have
material immediately available, competent materials managers prefer to buy on a
hand to mouth basis rather than continuous. The reason for this is that the item that
is not inventory won’t be lost or stolen nor will it spoil or become obsolete. In addition
inventory creates a need for junior staff and the floor space and the other costs. It
also ties up money that could be profitably employed elsewhere.
24. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 5
The present study is on inventory management practices in Narayana Health city.
The relevant literature pertaining to the topic and the thrust areas in inventory control
are briefly classified in this part.
Inventory: A stock of materials used to satisfy customer demand or support the
production of goods or services.
Objectives of Inventory Control:
The main objectives of inventory controls are:
To reduce financial investment in inventories. The capita to carry investments
in inventory costs money. As an asset in the form of inventory results in
decreased liquidity.
To provide good customer services.
Holding inventories costs to the organisation as holding cost.
Stock out cost is to be bear by organisation in case of non-availability of
items.
Credit control for financing inventories.
If inventories are left to themselves have a tendency to expand and go
beyond economic limits.
Methods of improving Inventory System:
Reduce the lead time by selecting suppliers close to the unit, this will reduce
the safety stock, reorder point and lead time.
Inform suppliers of expected annual demand.
Contract with suppliers for minimum annual purchases.
Maintain multiple suppliers to reduce the risk of stock out and best price.
Minimize transportation cost through effective sourcing.
Economic Order Quantity
Control access to storage areas to protect items from theft.
Obtain better forecast for the items consumption.
Standardize stock Items.
Dispose of inactive items.
25. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 6
Effective inventory management allows a distributor to meet or exceed customers’
expectations of product availability with the amount of each item that will maximize
the distributor’s net profits. In order to achieve effective inventory management the
inventory manager need to look into the following:
How to meet or exceed your customer’s expectations of product availability
while maximising your company’s net profits.
Business policies and procedures that are necessary to achieve effective
inventory management.
Effective warehouse organization.
Increasing the productivity of warehousing employees.
Best-practice methods for maintaining accurate inventory balances.
How to determine the most effective method for determining the future
demand of each product in each warehouse, including a detailed discussion
of the four elements of future demand: Past usage, Seasonal, Economic, and
fashion trends, Collaborative forecasting and other anticipated future demand
that it is not reflected in past usage or trends, Forecast horizons.
New methods for resupplying branches or stores from distribution centres.
The new economic order quantity.
How to prevent new products from becoming dead inventory.
Developing a budget for stocked inventory.
Identification and liquidation of excess inventory.
How to determine when to order a product and how much to order, including
advantages and disadvantages of various methods for determining:
o Minimum & Maximum quantities.
o Anticipated lead-times.
o Safety Stock
o Length of time between two orders.
26. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 7
Concept of Selective Inventory Control Techniques
The fundamental idea behind selective inventory control technique is to put the
efforts where results are worth it. It is well known that even through the world consist
millions of people; only a handful of personnel determine the destiny of all human
beings. Similarly, even if an organization uses millions of items only a few items are
of great importance.
The importance of materials can be due to its costs, its criticality, its availability, and
its consumption. There are number of methods available for selective control of
inventory. Each method emphasizes on a particular aspect, e.g. ABC Classification
value of consumption, VED classification emphasis on criticality of product.
According to nature of inventories carried out by an organisation, a suitable method
should be chosen. In an organisation different departments can employ multiple
methods in conjunction.
Basic Technique Main Usage Full Name
ABC
To control inventory
components and its
consumption
Always Better Control or
Pareto Law
HML To control purchase High, Medium, Low
XYZ
Inventory review
and usage
XYZ class items
FSN
To control
obsolescence
Fast, Slow, Non-moving
VED
To determine
stocking of critical
items
Vital, Essential and Desirable
Table1: Description of Classification techniques
27. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 8
ABC ANALYSIS
ABC analysis is the analysis of the store items cost criteria.
It is a simple approach, which avoids being money wise.
The cost of each item is multiplied by the number used in a given period and
then these items are tabulated in descending numerical value order.
It will be seen that first 10% of items approximately account for 70%, the next
20% for 20% of value and the last 70% account for 10% of value.
It has been seen that a large number of items consume only a small
percentage of resources and vice- versa.
A – Items represent the high cost centre, B items represent the immediate
cost centres, and C- items represent low cost centres.
A very close control is exercised over A items while less stringent control is
adequate for those in the category B, and less attention for category C.
HML ANALYSIS
Based on cost per unit items classified into Highest, Medium and Low valued items
This is used to keep control over consumption at departmental level for deciding the
frequency of physical verification.
FSN ANALYSIS
It is based on rate of consumption.
The items can be classified into:
1. Fast moving
2. Slow moving
3. Non- moving
4. Obsolete
An understanding of the movement of items helps to keep proper levels of
inventories by deciding a rational policy or reordering. This method is based on the
fact that some stock items have a much higher annual usage value than others.
28. Introduction to Project
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 9
VED ANALYSIS
The stores when subjected to analysis based on their criticality can be classified into
vital, essential and desirable stores. This analysis is termed as VED analysis.
1. Vital: items without which treatment comes to standstill: i.e. non- availability
can not be tolerated.
2. Essential: items whose non availability can be tolerated for 2-3 days,
because similar or alternative items are available.
3. Desirable: items whose non availability can be tolerated for a long period.
Although the proportion of vital, essential and desirable items varies from
hospital to hospital depending on the type and quantity of workload, on an
average vital items are 10%, essential items are 40% and desirable items
make 50% of total items available.
The vital items are stocked in abundance; essential items are stocked in medium
amounts, and desirable items we stocked in small amounts. By stocking the items in
order of priority, vital and essential items are always in stock which means a
minimum disruption in the services offered to the people.
30. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 2
OBJECTIVE OF STUDY:
The objective is to study the existing system of inventory management practices in
the existing structure of hospitals a case and suggest improvement in inventory to
minimize over stocking or under stocking by making use of certain inventory control
tools and techniques such as
Selective control practices like ABC, HML, XYZ, FSN analysis.
Application Multiple Basis Approach to Selective Inventory Control as an
effective tool for an efficient inventory management.
Lead time analysis, Reordering procedures.
Fixation of service levels etc.
By applying above stated inventory tools and techniques it is expected that
substantial reduction in average inventories can be achieved and there by liberate
locked up money in shape of inventory.
31. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 3
SCOPE OF STUDY:
Scope of this study is as follows:
Classify the items into various categories based on criticality,.
Classify the items into various categories based on consumption value.
Classify the items into various categories based on consumption rate.
Classify the items into various categories based on unit cost
Classify the items into various categories based on closing amount.
Authority can dispose the dead items lying in the stock.
Manager can prepare a schedule for minimizing risks like stock-out, etc.
32. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 4
METHODOLOGY:
Type of Study: Analytical study
To draw various conclusions for the data collected the following methodology has
been adopted:
ABC Analysis:
The methodology adopted for ABC analysis is discussed as:
The consumption Value is calculated from the report using the formula stated.
“Consumption Value = [(Department Issue Value - Department Return Value) +
(Patient Issue Value- Patient Return Value)]”
The consumption value is then arranged at decreasing order, followed by cumulative
consumption value. The cut-off points considered for ABC Classification are-
A-Class: 70 percent of total consumption value.
B-Class: Next 20 percent of total consumption value.
C-Class: Remaining 10 percent of total consumption value.
Table2: Format of ABC-Analysis
S. No. Item Name Item Code Consumption
Value
Cumulative
Consumption
Value
Unit price
XYZ Analysis:
The methodology adopted for XYZ analysis is as follows:
The closing quantity of each item is obtained from the report.
Stock so arrived valued for each item using unit price.
The closing inventory value of each item is listed in decreasing order, followed
by cumulative value.
The cut-off points considered for XYZ Classification are-
33. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 5
X-Class: 70 percent of total closing value.
Y-Class: Next 20 percent of total closing value.
Z-Class: Remaining 10 percent of total closing value.
Table3: Format of XYZ-Analysis
S. No. Item Name Closing qty Unit price Closing
Value
Cumulative
Closing
Value
HML Analysis:
The methodology adopted for HML analysis is discussed as:
The unit price for each item is obtained from the OCR report.
It is arranged in the decreasing order, followed by cumulative value to classify
them.
The cut-off points considered for HML Classification are-
H-Class: 70 percent of total unit value.
M-Class: Next 20 percent of total unit value.
L-Class: Remaining 10 percent of total unit value.
Table4: Format of XYZ-Analysis
S. No. Item Name Unit price Cumulative unit Value
FSN Analysis:
The methodology adopted for FSN analysis is as detailed as follows:
The consumption quantity is calculated using the formula:
“Consumption Quantity = [(Department Issue Quantity - Department Return
Quantity)+(Patient Issue Quantity - Patient Return Quantity)]”
34. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 6
The consumption quantity is divided by 365, to obtain the value. This value is used
for classifying items under these categories.
This value is arranged in decreasing order.
The cut-off points considered for FSN Classification are-
F-Class: (consumption quantity/365)>=1.
S-Class: (consumption quantity/365)<1 & (consumption quantity/365)>0.
N-Class: (consumption quantity/365)<=0.
D Class: (consumption quantity/365)<=0 & closing value <=0.
VED Analysis:
All departments were approached to obtain the vital items list maintained by them,
followed by their stock list to classify them as essential and desirable items.
MBASIC approach:
The methodology used for this approach is as:
All items are classified individually into ABC, HML, FSN, XYZ and VED Class
items.
Each item belongs to each of the class.
Total number of combination is 5^3 = 125.
The coding is done for each item in five letter string, each string represent the
class off each inventory control technique.
Example: AFXVH: It represents highly consumed, fast moving, high closing value,
vital item and High unit value item.
35. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 7
A B C
F S F S F S N
V E D V E D V E D V E D V E D V E D V E D
H
X
Y
Z
M
X
Y
Z
L
X
Y
Z
Table5: Mbasic model
Each box in the above table represents a unique combination of techniques.
36. Design of Study
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 8
PLAN OF ANALYSIS
The study is aimed at controlling pharmacy inventory and to suggest norms of
inventory to improve the performance. For the purpose of this study the following
data has been collected.
Annual opening and closing report.
Collection of primary data, observation, discussions with concerned people in
the concerned departments.
For HML classification unit price of all items were collected.
The closing stock as on 31.03.2015 was taken from the main store.
For MBASIC model, the different combinations of selective Inventory Control
techniques have been taken into consideration.
All departments in charges were asked questions about their stock held by
them.
Proper cares have been taken while collecting the data to minimize the errors.
TOOLS USED For DATA COLLECTION:
HINAI software and
Oracle billing software
Personal Interviews
LIMITATIONS:
There are two limitations for the study:
Availability of limited time.
Non-availability of certain data.
Clarity in information flow.
Explaining the findings to the authority.
38. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 2
INVENTORY COMPONENTS:
Inventory is broadly classified into following categories:
Pharmacy items
Surgical items
Linen items
Implants
General Store items
Electronic items
Kit items
Miscellaneous items
31%
32%
7%
17%
11%
2% 0%
0%
Classification of Inventory
Pharmacy
Surgical
Linen
Implants
General Store
Electronics
Kit items
Miscellaneous
39. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 3
DATA ANALYSIS:
For Cardiac unit,
The abstract of all five classification techniques are as follows:
Items
Percentage
of item
Consumption
Value
Percentage of
consumption value
A 142 4 22,07,13,305 70
B 302 8 6,31,67,289 20
C 3,527 89 3,15,77,914 10
Grand Total 3,971 100 31,54,58,508 100
Items Percentage
F 855 22
S 1836 46
N 1280 32
Grand Total 3971 100
Items
Percentage of
items Sum of Unit rate
Percentage of
unit rate
H 98 2 76,17,841 70
M 214 5 21,92,448 20
L 3659 92 10,93,158 10
Grand Total 3971 100 1,09,03,447 100
Items Percentage
V 93 2
E 1351 34
D 2527 64
Grand Total 3971 36
Items Percentage
Sum of Closing
Value
Percentage of
closing value
X 262 7 1,29,58,594 70
Y 352 9 37,16,658 20
Z 3,357 85 18,58,693 10
Grand Total 3,971 100 1,85,33,945 100
40. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 4
A B C
F S F S F S N
V E D V E D V E D V E D V E D V E D V E D
H
X - - - 1 - 2 - - - - - 7 - - - - - 15 - - 25
Y - - - - - - - - - - - - - - - - - - - -
Z - - - - - 5 - - - - - 9 - - - - - 3- - - 4
M
X - 1 - - 4 1 - - - - - 17- - - 3 - 17 - - 9
Y - 1 - - - - - - - 1 - 4 - - - - - 29 - - 17
Z - - - - 1 1 - - - - - 4 - - - 1 - 89 - - 14
L
X 4 69 - 1 5 - - 26 - 4 12 2 - 5 - - 8 21 - - 3
Y 3 23 - - - - 8 67 - - 17 9 1 32 - 2 28 1-4 - - 6
Z 1 19 - - - - 1- 87 - 1 17 - 1848- - 2344989211- 1191
3971
MBASIC abstract for cardiac unit
41. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 5
For MSH unit,
The abstract of all five classification techniques are as follows:
Count of
Material Name
Percentag
e
Sum of Cons
value
Percentage of
Closing Value
A 204 4 24,13,33,943 70
B 395 8 6,93,17,632 20
C 4,370 88 3,45,88,377 10
Grand Total 4,969 100 34,52,39,951 100
Items Percentage
Sum of Closing
Value Percentage
X 286 6 1,00,95,970 70
Y 420 8 28,85,894 20
Z 4,263 86 14,46,386 10
Grand Total 4,969 100 1,44,28,250 100
Items Percentage
V 37 1
E 3,340 67
D 1,592 32
Grand Total 4,969 100
Items Percentage
F 1,074 22
S 2,383 48
N 1,512 30
Grand Total 4,969 100
Items Percentage
Sum of Unit
Cost
Percentage of
unit cost
H 211 4 55,87,001 70
M 312 6 16,07,223 20
L 4,446 89 8,00,107 10
Grand Total 4,969 100 79,94,331 100
42. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 6
A B C
F S F S F S N
V E D V E D V E D V E D V E D V E D V E D
H
X - 2 - - 23- - - - - 15- - - - 4 12 - 3 - 8
Y - - - - - - - - - - 3 - - - - 1 3 - - - 3
Z - - - - 12- - - - - 27- - - - - 69 1 - - 25
M
X - 3 - - 17- - - - - 19- - - - 1 17 - 3 - 7
Y - - - - 3 - - - - - 1- - - - - 2 43 - 4 - 11
Z - - - - 3 - - - - - 8 - - - - - 119 1 1 - 4-
L
X - 61- - 4 - - 31 - - 18- - 7 - 1 25 - 2 - 3
Y - 52- - 3 - - 85 - - 26- - 27 - 2 126 1 3 - 12
Z - 21- - - - - 114- - 39- - 671- 2 1622 1-1 8 - 1379
4969
MBASIC abstract for MSH unit
43. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 7
For main store,
The abstract of all five classification techniques are as follows:
Items Percentage
Sum of cons
value
Percentage of
consumption
value
A 250 4 56,03,50,985 70
B 503 7 16,04,60,132 20
C 6,294 89 8,02,40,460 10
Grand Total 7,047 100 80,10,51,578 100
Items Percentage
Sum of
Closing
Value
Percentage of
closing value
X 174 2 4,48,28,352 35
Y 569 8 1,28,31,700 10
Z 6,304 89 64,17,911 5
Grand Total 7,047 100 12,81,55,926 100
Items Percentage
F 1,525 22
S 2,658 38
N 2,864 41
Grand Total 7,047 100
Items Percentage
V 88 1
E 2,389 34
D 4,570 65
Grand Total 7,047 100
Items Percentage
Sum of unit
rate
Percentage of
unit cost
H 262 4 1,23,01,675 35
M 488 7 35,20,146 10
L 6,297 89 17,61,432 5
Grand Total 7,047 100 3,51,66,505 100
44. Analysis of Data
A Comprehensive Study in Inventory Classification Techniques in Narayana Helath City Page 8
A B C
F S F S F S N
V E D V E D V E D V E D V E D V E D V E D
H
X - - - 5 4 - - - - 2 - 4 - - - - - 2 - - 7
Y - - - 1 - - - - - 4 - 5 - - - 1 - 10 - - 7
Z - - - 2 1 10- - - 1 - 30 - - - - - 141 - - 25
M
X - 4 - - 9 - - - - - 3 6 - - - 1 - 3 - - 2
Y - 1 - - 3 - - - - 5 8 6 - - - 4 - 40 2 - 13
Z 2 3 - 2 11 - - - - 3 11 17 - - - 11 - 246 6 - 66
L
X 2 85- - - - 2 17 - - 6 1 - 2 - 1 3 2 - - 1
Y 2 70- - - - 2 149- 4 26 - 1 48 - 5 45 67 - - 40
Z - 32- 1 - - 1 163- 3 24 - - 939 - 9 7221,127 3 - 2,692
7047
MBASIC abstract for Main Store
46. Findings and Recommendations
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 2
The major objective of the project is to minimize the over stocking by making use of
different control tools and techniques. From the data compiled and analysed in
previous chapter, the following logical conclusions have been drawn:
The study was conducted on three aspects of Selective Inventor Controls:
1. ABC analysis
2. XYZ analysis
3. HML analysis
4. VED analysis
5. FSN analysis
Based on the combination of above selection Inventory Controls, MBASIC models
were designed to suggest improvements in the existing system of inventory
management in the Health city.
General Recommendations:
a) It is observed that certain inventories are kept in large quantities without any
relation to the consumption pattern. The pharmacies can carry out HML
analysis once in a year. Based on HML analysis, the following
recommendations are made:
1. The stock position of all H items is to be reviewed at the end of every
month.
2. The stock position of all M items is to be reviewed at the end of two
months.
3. The stock position of all L items is to be reviewed at the end of three
months.
4. After doing such an exercise the levels of inventory can be rationalized
keeping criticality and availability of the drug.
b) Items that are non-moving can be returned to the suppliers to avoid the shelf
life problem.
c) Items for which there is a regular consumption, stocks should be kept in
accordance.
d) The following annual reviews are suggested:
XYZ and FSN analysis.
ABC and XYZ analysis.
47. Findings and Recommendations
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 3
Table25: Control measures of designed MBASIC model:
S.
No
Nature of
Control
procedure
High
Consumption
Value
Moderate
Consumption
Value
Low
Consumption
Value
1 Type of control
and authority
Very strict,
Controller can
have high authority
Moderate control,
controller can be
from middle
management
Low control, user
departments can
be given
authority
2 Quantity of Safety
stock
Very low Low safety stock High safety stock
3 Consumption
Control
Weekly or daily
control
Fortnight or a
month
Quarter
4 Material Planning Material planning
should be accurate
and database
should be up to
date
Past consumption
can be used as a
basis of plans data
can be 10 to 15
days old
Rough estimates
are sufficient and
data can lag
behind by a
month.
5 Application of
Value analysis
Waste reduction,
Obsolete and
surplus reduction
Moderate attempts
are sufficient
Annual reviews
sufficient
6 Number of
sources of supply
Increase the
number of
sources, centralize
purchase
2 or 4 reliable
sources combined
purchase with
attempt to reduce
lead time
1 or 2 reliable
sources, annual
or half yearly
purchases.
Decentralized
and reduce
clerical work
7 Lead time
reduction
Maximum efforts
should be made to
reduce lead time
Moderate Minimum clerical
efforts
8 Centralized vs
Decentralized
Centralized
purchasing
Combination
purchasing
Decentralized
purchasing
9 Priority High priority in all
activities for
procurement stage
Normal processing
with high priority
only when critical
Lowest priority
48. Findings and Recommendations
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 4
Non-moving Analysis:
a) For cardiac unit, there are 78 items that are non-moving in the Cardiac unit of
Narayana Health City. The breakup for these items is shown as:
Normal PH 10
SG 60
IM 8
Total 78
These 78 items are further classified in terms their closing value and their unit cost.
H M L
X 9,35,172 94,666 44,601
Y 0 1,51,313 36,590
Z 0 4,748 75,086
13,42,175
b) For MSH unit, there are 50 items that are non-moving in the multispecialty unit
of Narayana Health City. The breakup for these items is shown as:
Normal PH 13
SG 37
Total 50
These 50 items are further classified in terms their closing value and their unit cost.
H M L
X 94,292 51,795 32,786
Y - 43,292 28,164
Z - - 18,813
2,69,142
49. Findings and Recommendations
A Comprehensive Study in Inventory Classification Techniques in Narayana Health City Page 5
c) For main store, there are 209 items that are non-moving in the main store of
Narayana Health City. The breakup for these items is shown as:
Normal PH 47
SG 160
Temperature PH 1
General Stationary GN 1
Total 209
These 50 items are further classified in terms their closing value and their unit cost.
H M L
X - 16,727 -
Y 31,734 2,33,337 3,05,627
Z - 61,942 4,19,065
10,68,432
50. Conclusion
CONCLUSION
An effective inventory system should be Relative, Dynamic, and Truthful.
Relative refers to meeting the needs of other organizational function or
departments. The system is dependent on the needs of the others.
Dynamic refers to time varying nature of inventory needs.
Truthful refers to the ability to report accurately the stock or position of inventory
when required.
It is not uncommon to have different types of inventory systems in the same
organization at the same time. Management’s responsibility is to manage organisations
assets both human and non-human in the light of preconceived goals. Pharmacy
inventories tend to have an impact upon continuous quality patient care. It should not be
surprising that pharmacy inventories are troublesome and controversial in view of
manifold influences.
51. Bibliography
BIBLIOGRAPHY:
Following are the names of book fetched online in form of PDF:
1. Adam E.E. & Ebert RJ – Production an Operation
Management, 6th edition, K. Ashwathappa & K. Sridhara
bhatt
2. Delhi: SAGE Publications - Selective Inventory Control,
2nd
ed., edited by A. V. Srinivasan, 126-45.
3. M. G.Parameswaran: Production & Operations
Management, TMH, 2006.
Websites used for references:
www.crisil.com
www.ibef.com
www.nhhospitals.com