Inventory Management: Reclassify your inventory type

Q. How should I organize inventory to improve workflow? 

A. "Why can't we confirm our orders faster? Or more specifically, why is there no inventory available at my location to confirm my order?" 

Sound familiar? Of course, it does. From my own experience and conversations with many providers, these are common frustrations. Believe it or not, sometimes these workflow bottlenecks stem from the way inventory is set up in your billing system. In practice, we typically categorize inventory into two groups: serialized and non-serialized items. These decisions often arise from the need to link products to sales orders for rental or purchase transactions, which makes perfect sense. However, the way you manage your inventory can help alleviate these workflow delays.  

Serialized items are usually straightforward and are often required by billing systems for sales orders and patient tracking, so we'll focus on non-serialized items. The way these items are classified can have a significant impact. In many billing systems, you can choose between non-serialized items or "basic" items. Non-serialized items require inventory to be on-hand at the service location to confirm the order, whereas basic items do not. The trade-off is that basic items don't maintain inventory levels in the billing system, meaning you'll need to track them elsewhere – via another system, a spreadsheet or manual tracking.  

However, in my experience, non-serialized inventory levels are often inaccurate, as billing and customer service teams may artificially inflate quantities to ensure timely order confirmation. So, if this is the case, why complicate things by keeping these items non-serialized? Why not classify them as basic items instead? By doing so, you can free up your staff to focus on other priorities and speed up your billing process. Your team will thank you, and so will your finance department, as it will improve cash flow. 

John Skoro is CEO and co-founder of HME360. Reach him at John@hme360.com.