To draw appropriate recommendations, I find it important to highlight the goals that Caroline Highgrove aims to meet in the assignment that she is given by the Director of University Operations in Hardy Hospital. Caroline, the Director of Materials Management, evaluates the flow of materials in the hospital from the store to various hospital departments and the other way around. In this discussion, I shall use the findings by Caroline to assess the efficiency of material management in the hospital. Subsequently, I shall recommend on the way forward with key consideration to strategies that help the hospital to reduce its inventory expenses.
Accordingly, the current system of operation used by the hospital in stock-keeping is ineffective. As I go thorough Caroline’s observation, I also learn that stock-keeping units order materials in different sizes and frequencies. As such, some inventories are either in excess or they run out before others come in. To regulate these stock imbalances, it is my recommendation that the hospital devises firm policies regulating all its stock-keeping units.
While implementing this strategy, it is important that employees take seriously record-keeping since these records are useful in estimating the amount of stock expenditure at different times. According to Caroline, the information system of the hospital is unreliable because some employees do not bother to enter important information into computer systems. To address this weakness, I recommend that the hospital administration gets strict on employees who show laziness in their place of work.
Also, the hospital should come up with computerized ways to make sure that employees pass orders only after completion of specific computer programs. Besides, these programs should ensure that employees receive an okay feedback from the central information system to allow them go ahead with their order.
Moreover, I note the difficulty associated with making special orders in the hospital. In this context, head nurses, doctors and departmental coordinators engage in time-consuming activities not related to their job specifications. To overcome this inadequacy, the hospital needs to use more staff to handle stocks. The new staff should work closely with departmental heads, nurses and doctors to handle particulars related to stock orders. Implementation of this recommendation allows nurses and doctors to find more time to focus on matters related to their duties, and overall, the hospital benefits from better management of its materials.
Finally, the hospital incurs a lot of expenses in ordering and storing its supplies. Also, Caroline notes that the hospital pays a single worker $20 per hour for processing a line item. In addition, the hospital pays $4.60 per square foot for its 36,750 square feet storeroom. Other annual costs for running the storeroom include $160,000 for its five employees and $200,000 for miscellaneous expenses. These expenses are expensive for the hospital, and it is my recommendation that the size of the storeroom be halved. This means that all other expenses shall be cut down by the same margin, but a problem of where to keep the other half of the stock arises.
Fortunately, increasing the storage capacity for all departments addresses this problem. This storage capacity shall be increased at the physical site of each department to avoid movements to the storeroom. Again, this move shall lessen the frequency of ordering by half, and as such, the ordering expenses are also cut down. By so doing, the hospital shall reduce its ordering and storage expenses.