This document discusses various techniques for inventory control, including ABC analysis, VED analysis, FSN analysis, SDE analysis, HML analysis, XYZ analysis, GOLF analysis, and SOS analysis. ABC analysis classifies inventory items into A, B, and C categories based on annual consumption value and cost. VED analysis categorizes items as vital, essential, or desirable based on their criticality. FSN analysis categorizes items as fast, slow, or non-moving based on consumption patterns. SDE analysis is based on how easy or difficult items are to procure. HML analysis categorizes items based on unit value. XYZ analysis uses inventory value, while GOLF analysis considers the source. S

1. Techniques
of
Inventory Control
Presented by
Aruna Shastri
Roll no. 826
MSc. Nursing 2nd year

2. INVENTORY
• The term ‘inventory’ originates from the French word ‘Inventaire’ and
Latin word ‘Inventariom”, which implies a list of things found.
• It is defined as the blocked working capital of an organization in the
form of material.

3. INVENTORY CONTROL
• It is the process by which inventory is measured and regulated
according to pre-determined norms such as
Economy
Safety stock
Minimal Level
Maximum level
Order level

4. TECHNIQUES OF INVENTORY CONTROL
1. ABC Analysis (Always, Better, Control)
2. VED Analysis ( Vital, Essential, Desirable)
3. FSN Analysis ( Fast moving, Slow moving, No moving)
4. SDE Analysis ( Scarce, Difficult, Easy)
5. HML Analysis ( High, Medium, Low)
6. XYZ Analysis
7. GOLF Analysis ( Govt., Ordinary, Local, Foreign)
8. SOS Analysis ( Seasonal, off Seasonal)

5. ABC ( ALWAYS, BETTER, CONTROL) ANALYSIS
• It is a basic supply chain technique in inventory control.
• Classification is based on two factors according to Pareto’s Principle .
1. Cost
2. Annual consumption
According to this principle
{Annual consumption value= cost of item x Quantity consumed}
• It is also known as Selective Inventory Control Method.

6. A-ITEM
• Small in number
• Managed by top management
• Tight control and rigid estimate of requirement
• Strict and close watch
• Require low safety stock
• Consume measure portion of fund
e.g. Ventilator, Dialysis machine, Defibrillator, CT-Scan machine, MRI
Machine, USG, Heart-lung machine

7. B-ITEM
• Moderate control
• Purchased on rigid requirement
• Strict watch and control is needed
• Safety stock are maintained moderately
• Managed by middle level management
e.g. Suction machine, Oxygen Cylinder, Nebulizer, Humidifier, Cardiac
monitor

8. C-ITEM
• Needed large in number
• Consumed lesser amount of cost
• Ordinary control
• Purchase on usage estimate
• Require high safety stock
e.g. Syringes, Cannula, Gloves, Suction Catheters etc.

9. EXAMPLE ABC ANALYSIS

10. Pareto Theory Principle in ABC
ITEM % OF ITEM
( CONSUMPTION)
% OF RUPEE VALUE
(COST)
A 10 70
B 20 20
C 70 10

11. Steps to carry out Analysis
Collect all the data of inventory and make list of all items
Calculate annual usage ( unit cost x quantity)
Arrange all in descending order according to cost level
Calculate cumulative annual consumption value
Calculate cumulative annual consumption percentage
Categorize all item as per consumption value

12. Advantages
• Investment can be maintained.
• Easy to control wastage of costly item
• Help in maintaining safety to total cost
• Easy to maintain stock and turnover rate
• Manager is able to control the investment specially A-item.

13. Disadvantages
• Proper standardization is required.
• Considered the only money value not importance of item.
• Periodic review become difficult.

14. VED ( VITAL, ESSENTIAL, DESIRABLE) ANALYSIS
• Classification is based on criticality than on functional basis.
• V-VITAL ITEMS
It includes items without which a hospital cannot function
These items should be adequately stocked for smooth functioning of
an organization
Stocked in abundance
Shortage can’t be tolerated
E.g. Oxygen supply, ET tube, ventilator, Defibrillator

15. CONTD.
• E-ESSENTIAL ITEMS
It includes items without which a hospital can function for a short
time but affect the quality of patient care to a limited extent.
Reasonable risk can be taken.
Controlled by middle-level managers.
E.g. Antibiotics, IVF, X-ray machine, electric cautery, patient trolley
etc.

16. Contd..
• D-DESIRABLE ITEMS
The non-availability of which for a considerable period may not affect
the functioning the hospital.
They can be purchased easily when required.
Low in stock or not in stock
E.g. Gloves, Goggles, Eye Shield, Eye drape, clip drape,

17. Combination of ABC & VED ANALYSIS
• Depending on consumption value and criticality which will give fruitful
result.
• Category-1 Close monitoring and control
• Category-2 Moderate control
• Category-3 No need of control
V E D Categor
y
Item Cost
A AV AE AD 1 10 70 %
B BV BE BD 2 20 20 %
C CV CE CD 3 70 10

18. CONTD..
V-ITEM E-ITEM D-ITEM
A-item Constant, control &
regular follow-up
Moderate in stock Nil-stock
B-item Moderate stock Moderate stock Low stock
C-item High stock Moderate stock Very low stock

19. FSN ( FAST MOVING, SLOW-MOVING NON-
MOVING) ANALYSIS
• Analysis is based on consumption pattern of item and issue pattern of
item from stock.
• For analysis, issuing of item in past 2-3 years is considered.
• Period of consideration and limited number of issue may vary from
organization to organization.

20. Contd..
• Non-moving item
If no issuing of item during 2-3 year- not moving item
S- Slow-moving Item
If issuing 10-15 times in a year included in S-item
• F-Fast Moving Item
If issuing > 10-15 times included in F-Item
Demand high
Special care to be taken otherwise work may suffer.

21. SDE( SCARCE, DIFFICULT, EASY TO OBTAIN)
ANALYSIS
• Based on problem faced in procurement and availability of item.
• S-scarce item
Difficult to obtain
Generally imported
In-short supply
Management by top managers
A big safety stock is maintained for such item.

22. Contd..
• D-DIFFICULT ITEM
Difficult to procure
Come from distant places
Moderate safety stock is maintained
• E-EASY ITEM
Easy to acquire
Readily available in local market
Supply exceeds demand
Minimum safety demand

23. HML( HIGH, MEDIUM, LOW) ANALYSIS
• Based on criteria of unit value of item.
• High Value material
• Medium value material
• Low level management

24. XYZ ANALYSIS
• Based on value of inventory stored.
• X-ITEM: whose inventory values are high
• Y-ITEM: Moderate in stock
• Z-ITEM: Low in Stock

25. GOLF (GOVT. ORDINARY, LOCAL, FOREIGN)
ANALYSIS
• Based on source of material
• Government: items are imported through govt. agencies.
• E.g. Indian Drug and pharmaceutical
• ORDINARY/OPEN MARKET: who form bulk of supplier and
procurement is easy.
• LOCAL: sell on cash-purchase basis
• Foreign: bigger items can be purchased annually

26. SOS (SEASONAL, OFF SEASONAL) ANALYSIS
• Based on season/ according to necessity in a specific time
• Seasonal
Available only for a limited period
• Off seasonal
Available through out the year

27. THANK YOU….