Hospital Inventory Management Best Practices

Hospital inventory management is an essential part of improving patient safety and patient outcomes while also reducing inventory costs. Challenges to the healthcare industry, such as supply shortages and human error, make healthcare inventory management highly important. Following best inventory management practices can help hospital administrators achieve better inventory control while remaining in compliance with regulations and handling difficulties within the industry. 

Importance and Benefits of Inventory Management 

From medical equipment to pharmaceuticals, hospitals are responsible for keeping an inventory count of each item. Doing so helps ensure quality patient care and prevents a healthcare facility from having too much or too little in stock at any given time. The following are some of the challenges that the healthcare sector faces, resulting in a greater need for an inventory management system.

Supply Chain Issues and Unforeseen Circumstances

The hospital supply chain has been experiencing disruptions in recent years. This puts hospitals and other medical facilities at risk of having inadequate medical supplies, which can lead to reduced patient safety and poor outcomes. For example, possible drug shortages can make it difficult to promptly provide patients with the treatment they need. Using best practices for inventory management can help hospitals avoid the direct impact of healthcare supply chain issues, along with unforeseen circumstances.


Each hospital and medical facility in the healthcare sector operates within a budget for medical instruments, medications, and other inventory. Without effective inventory management techniques, these facilities can end up ordering too much inventory, which then goes to waste. Having better inventory control lowers the risk of hospitals and other facilities going over budget and wasting medical supplies. This helps create room in the budget to purchase other supplies, such as expensive equipment needed for improving patient care. 

Patient Safety 

Having medications and other medical supplies that are past their expiration date can put patients at risk of receiving medication or treatment that has lost its efficacy. Keeping inventory that has been recalled, such as pharmaceuticals, can be dangerous to patients. Each hospital and medical facility should use best practices for inventory management to protect patients from these risks.

Staff Shortages and Improving Efficiency 

Staff shortages in a hospital can lead to patient safety issues, such as treatment delays or medication distribution errors. Hospital inventory management helps improve staff efficiency, even when a staff member or medical personnel shortage occurs. This helps keep patients safe from errors while also ensuring that patients receive timely, high-quality care. 

Unfortunately, staffing storages are expected to continue in the future, making it even more important for hospitals to address ways to improve efficiency and adopt new systems that reduce the negative effects.

Human Error in Manual Processes 

Relying on manual processes for inventory management can lead to human error. Medical personnel might enter the wrong inventory count for some items or fail to update inventory levels for other items. This can lead to inadequate medical supplies or other inventory problems. 


Healthcare providers at hospitals and other medical facilities must follow federal regulations and other regulations in the healthcare industry, such as the following:

Having an inventory management system in place can make it much easier for these facilities to always remain in compliance. 

Worker practicing inventory management

Hospital Inventory Items and Considerations for Each 

Medical Equipment 

From specialty equipment to routine medical equipment, hospitals, and other healthcare facilities must keep close track of inventory. This helps prevent hospitals from having to replace costly pieces of equipment that have been lost. Hanging inventory also helps prevent overspending on equipment that facilities might already have in plentiful supply, while also ensuring that these facilities are not short on medical equipment that medical staff use on a regular basis. 


From recalls and expiration dates to drug shortages, using effective inventory management techniques helps hospitals and other facilities reduce the risk of medication distribution errors. These techniques also help these facilities improve patient care, remain in compliance with regulations, and avoid treatment delays due to drug shortages. 


Medical products, such as syringes and other key items used daily, require reliable inventory control to prevent excesses or shortages. Hospital supply chain problems add to the challenge of keeping enough supplies on hand, making inventory management even more essential. 

What to Look for When Implementing a Hospital Supply Management System 

Cloud Supply Chain Strategy 

A cloud-based healthcare supply chain strategy can help hospitals and other medical facilities prevent shortages of medication, medical supplies, and medical equipment. Using a cloud-based strategy helps keep inventory information secure and updated in real-time. 

PAR vs. Perpetual Inventory

Periodic automatic replenishment (PAR) and perpetual inventory are two different approaches to inventory management. PAR involves having updates made to inventory data at regular intervals, such as every week. Perpetual inventory involves using inventory management software to update data in real-time rather than on a periodic basis. PAR can be effective for managing inventory. However, it leaves room for error, making it less efficient for larger hospitals and healthcare facilities. Perpetual inventory often costs more to implement, but it can lead to better accuracy, especially for larger medical facilities. 

When choosing a hospital inventory management software to implement best practices, hospital administrators should look for the following qualities:

  • Ease of use 
  • Integration with hospital systems 
  • Communication capabilities 
  • Scalable and customizable
  • Comprehensive reporting and data analytics 

Hospital Inventory Management Best Practices 

Organize Inventory 

A key practice for managing inventory is keeping it well-organized. A cluttered or disorganized supply space can make it more difficult to have inventory accurately updated. Items can be misplaced, a shortage of items might go unnoticed, or ordering too much of an item when inventory is organized inefficiently. For example, have medical staff put items that are nearing their expiration date at the front of shelves rather than in the back to ensure that they are used before items that have a later expiration date. Store items that are used often and in large quantities near the front of supply rooms. 

Assign Team Responsibilities Clearly 

Hospitals and other medical facilities have several staff members who are part of inventory management. A few may be responsible for going over purchase orders, while others might be expected to place supply orders. Other team members who might be involved with inventory include medical staff who clean and organize supply rooms and other areas. Hospital administrators should assign inventory management roles and ensure that each team member understands their responsibilities clearly. Conduct training sessions to make sure that these responsibilities are carried out efficiently. 

Asset Tags and Barcodes 

Using barcodes and asset tags provides a highly efficient way to manage inventory, including pharmaceuticals and medical equipment. Asset tags and barcodes allow for easy and convenient check-in and check-out processes for medical instruments and equipment. This helps lower the risk of having instruments and equipment go missing or end up misplaced. Using asset tags and barcodes can also help hospitals and healthcare facilities reduce costs. 

The use of barcodes and asset tags is an important part of compliance as well. Having a serial number and lot number on each pharmaceutical, for example, helps hospitals and other facilities meet DSCSA compliance standards for tracking. 

Collect Data and Optimize 

Gathering supply chain data and other data, then optimizing this data can help hospitals and other medical facilities accurately track inventory and prepare for potential shortages or other disruptions that can affect supplies. For example, hospitals might increase purchase orders for supplies that are expected to experience shortages in the near future. 

Collecting data and optimizing it should involve reducing the reliance on manual processes that can increase the risk of errors. These facilities should also analyze the usage vs. order frequency ratio to prevent ordering too many or not enough items. For example, items that are not used frequently should not be ordered on a regular basis compared to items that are used more often. Hospital administrators should also keep track of lifecycle management and equipment maintenance to plan ahead as equipment nears the end of its lifecycle. 

MPI’s Benefits to Hospital Inventory Management

Medical Packaging Inc., LLC (MPI) offers packaging solutions that can help hospitals and other medical facilities manage inventory more accurately and efficiently while remaining in compliance. These solutions can be customized to fit your facility’s needs and requirements. 

MPI’s unit dose medication packaging and labeling systems, and materials are the answer to safe and efficient drug inventory management. Our solutions provide hospital inventory managers with the ease of ordering everything from one place. These systems, materials, and benefits include:

  • For use with MPI packaging systems, our Pak-Edge UD Barcode Labeling Software is the key to enhanced tracking and security. Our new Pak-Edge Version 2.0 takes networking capabilities to the next level with advanced barcoding capabilities and configurations.
  • Oral solid and liquid packaging systems offer custom packaging for unit dose oral solids and liquids. These systems are easy to use and cost-effective for a variety of healthcare markets.
  • Overwrapping systems, equipment, and materials are designed for a variety of medications, ampoules, vials, syringes, and more.
  • Medical packaging materials are designed exclusively for our packaging systems, so you are relying on one source for all your medication packaging needs.
  • Labeling solutions for customers in a wide range of care settings
  • MPI provides the best, high-quality customer assurance and technical support.

Our systems and related materials are designed with efficiency and safety in mind, promoting all the best practices within your hospital inventory management system.

For more information on MPI solutions to help your hospital or healthcare facility implement best practices for inventory management, please contact us.