Multi-Criteria Inventory Classification of Pharmaceuticals for Inventory Management Optimization: The Case of Public Hospitals in Addis Ababa, Ethiopia.
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Date
2023-12
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Addis Ababa University
Abstract
Background: Inventory management is the heart of the pharmaceutical supply chain system.
Effective and efficient management of medical stores requires close monitoring of important
drugs, prevention of the pilferage and priority in purchase and distribution of drugs that
would help to optimize use of resources and eventually help to improve patient care, by
ensuring the availability of essential stocks and preventing stock-outs. Implementation of
different types of products’ classification and categorization for inventory optimization is
critical to minimize the inventory cost and maximize inventory efficiency.
Objective: To describe multi-criteria inventory classification of pharmaceuticals for
inventory management optimization in Addis Ababa public hospitals.
Methods: Facility-based descriptive cross-sectional study design with mixed research
approach was conducted to retrospectively review logistic data from the digital health
commodity management information system (HCMIS) and manual records of 2012-2013
EFY. The quantitative data was analyzed using Microsoft excel spreadsheet and SPSS
version 20, while the qualitative data was analyzed thematically.
Result: The ABC – VED matrix analysis revealed that 264 (33.67%) of category (AV, AE,
AD, BV, CV) items account for 84.65 % of total pharmaceutical expenditure (TPE), of which
the highest amount (32.54%) & (31.17%) was AE & AD items 30 (3.83%) & 50 (6.38%)
respectively. From FSN – XYZ matrix analysis Category Ⅰ consists (FX, FY, FZ, SX & NX)
that hold 30.35% of items with 68.12% of total pharmaceutical expenditure (TPE) and
40.21% of items were category Ⅱ (SY, SZ & NY) holds 11.1% of TPE. The remaining
22.44% of items accounted 21.2% of TPE were grouped under category Ⅲ (NZ) in 2012. On
the other hand Category Ⅰ holds 36.29% of items that accounted 90.64% of TPE, category Ⅱ
and category Ⅲ holds 51.87% &11.83% of items that accounted 9.05% & 0.31% of TPE in
2013, respectively.
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Conclusion: ABC-VED matrix analysis of present study showed that category Ⅰ
pharmaceuticals holds large amount (84.65%) of budget that needs greater attention for
control which avoids wasting extra funds on the purchase of drugs that are not really
necessary. Category I consumed 68.12% and 90.64% of total consumption in 2012 and 2013,
respectively, according to the FSN-XYZ matrix study. According to this finding, NZ class
products spent more budgets (21.2%) in 2012 than 2013 (0.3%). which are non-moving and
have low closing values, which creates an issue with a lack of available space and a high rate
of waste. In 2013, Category I consumed 90.64% of all pharmaceutical spending and required
tight manager supervision.
This study also examined the inventory management practices with in public hospitals, and
the findings indicated that while ABC-VED analysis is used in these facilities, it is not
updated yearly. FSN-XYZ analysis is not used in any of the hospitals. To reduce overstock
and stock out, the hospitals used different inventory control techniques, such as
minimum/maximum, routine physical inventory, bin cards, and stock cards.
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Keywords
Multi-criteria classification, ABC-VED Analysis, FSN-XYZ Analysis, inventory management optimization.