Managing Blood and Blood Product Inventory - Tip 3: Set Appropriate Inventory Levels

Each health provider is responsible for setting their own inventory levels and ensuring these are appropriate. There is a strong relationship between inventory levels and wastage. Hospitals and laboratories that hold more blood and blood products relative to their average daily use often have high wastage rates. The key to good inventory management is balancing sufficient inventory to meet clinical need while keeping wastage rates at a minimum.

Specific advice and guidance on how to set inventory levels for each different product, i.e. red cells, platelets, plasma and manufactured and recombinant products will be found in the specific modules relating to those products. The following are important factors that may influence decisions on inventory levels:

  • Type of health provider. Hospitals and blood banks that have an emergency or obstetrics department can sometimes need a large volume of product available in a short time. If your hospital has this type of service you may like to set a higher minimum or trigger level of product, as restocking during an emergency may not always be possible.
  • Daily usage rates. You can examine your average daily use by using the Fresh Blood Orders and Issues report found in the Inventory Report section in BloodNet. You should also examine your Days Cover relative to your usage (see below).
  • Supply patterns (product received from suppliers or other health providers). You should consider all product entering your inventory. Product may be received either from the supplier or transferred from another health provider. The pattern of this may be consistent or may vary, and this can have an effect on your ordering patterns
    Variability

    It can be helpful to look at the degree of variability by blood type or product. If the variability is high, then you may consider holding more inventory. If the variability is relatively low, then you will not need to hold as much.

  • Distance from supplier (leadtime). You may need to consider how far away your hospital or blood bank is from the Australian Red Cross Blood Service (Blood Service) or other supplier depot as this will have an effect on how quickly you will be able to re-stock once you reach your minimum level. If you are a long way from the Blood Service or other supplier depot you may like to set a higher minimum level. Refer to the BloodNet user manual for definitions of different order types and priorities. User manuals and tip sheets can be found at www.blood.gov.au/bloodnet
  • Frequency of deliveries. Hospitals or laboratories that get few deliveries may need to set higher target levels than those that are restocked more frequently.
  • Transfer patterns. Hospitals and laboratories that transfer product back and forth need to carefully examine the effects this has on inventory. For example, product may be able to be transferred to another health provider to enable it to be used before expiry, but should be transferred with sufficient expiry to ensure it is used. Arrangements should be in place with these laboratories to ensure this process is appropriate.
  • Your discards as a percentage of issues (DAPI). If your discard rates are high, you may need to consider whether holding less stock is appropriate.

DAY’S COVER

Day’s Cover is the number of days of available stock that is held in inventory for a particular product. It can be calculated by dividing the number of available product units in inventory by the number of product units used (on average) per day over a given time period. It is generally recommended that you look at a time period that will be representative of current practice to determine this. For example, if your hospital has added a new surgical unit you may want to look at the time period since the unit was set up to determine the usage.

Balancing Costs

Each health provider should consider whether the level of inventory holdings will balance costs in relation to the level of discards and the number of deliveries

Day’s Cover = a ÷ b

Where

a = Number of available units in stock

b = Average daily use = number of units used over a one year period 365 (or you may like to use a different denominator if your facility doesn’t use blood and blood products every day of the week).4

This can be done for each type of product individually. For example:

11,000 units of red cells ordered over a 12 month period = 11000 ÷ 365 = 30 units per day

 

Number of available units in stock = 180

 

Days cover = 180 ÷ 30 = 6

 

This can be described as a health provider holding a stock of 180 units having about 6 day’s cover.

The ideal inventory level in terms of day’s cover may differ for each product type and type of health provider. However a good inventory manager will base the levels on experience and will allow for small changes over time to adapt to any practice changes at your facility.

Issuable Stock Index (ISI)

Day’s cover can also be referred to as the Issuable Stock Index or ISI, a term used internationally.

If you use BloodNet you can calculate your day’s cover for each fresh blood product using the Fresh Blood Orders and Issues Reports found in the Inventory Report section. You may like to set a minimum trigger level to alert you when product is getting low, and have well documented actions to take in these circumstances.

DISCARDS AS A PERCENTAGE OF ISSUES (DAPI)

Discard as a Percentage of Issues (DAPI) is a good way to make your discard data comparable with other health providers. You should use the FATE007 Fresh Component Health Provider Discards Report in BloodNet to compare your facility to those of a similar size nationally in the group category and against those in your state. This will allow you to benchmark your discards against others which is now occuring on a jurisdictional and national level.

A certain level of discards of blood and blood products, particularly fresh products with short expiry dates is both inevitable and appropriate to ensure that products are available where and when they are clinically necessary. However, there is a proportion of discards of blood and blood products that is neither inevitable nor appropriate and is this is termed wastage. Total discards are reported in BloodNet.

DAPI is calculated by taking the amount of blood and blood product units discarded in a given time period and dividing this by the total amount of blood and blood product units received by your facility in the same time period and multiplying this figure by 100 to give a percentage value.

DAPI = x ÷  y x 100%

          Where

          x = Number of units discarded

          y = Number of units issued to you

For example:

50 Albumin units wasted over 12 months and 5,000 Albumin units  issued to your facility over 12 months

 

DAPI = 50 ÷ 500 x 100% = 1%

Wastage as a Percentage of Issue (WAPI)

If you are comparing your results with international data, DAPI is frequently referred to as ‘Wastage as a Percentage of Issues’ (WAPI) internationally.

If you use BloodNet you can examine your discard patterns using BloodNet reports. Not all health providers will be able to limit discards to the same level. You should examine your own practice for each product and assess whether there is any room for improvement. Recording the reason for discard of a product is important for monitoring purposes. Monitoring trends of wastage will help identify those areas for improvement.

More information on discards, and strategies for reducing wastage can be found at www.blood.gov.au/wastage.

Next page: Tip 4 - Keep procedures simple and Tip 5 - Build collaborative relationships

Previous page: Tip 2 - Provide expert training

Table of Contents