Tapping AI & ML for automated inventory processes

By Ananthan KSC, Director, Sukraa Software Solutions 

Supply chain management in hospitals today is witnessing a paradigm shift towards automation. This automation has been perceived as a great necessity owing to hospitals constantly working on achieving greater inventory management efficiency in their daily operations. 

Maintaining inventories of all hospital items requires scrutiny. Traditional manual methods can be cumbersome and prone to errors. AI and ML tools help here by automating systems to overcome manual operation-based challenges. They effectively help balance supply and demand, optimize working capital, and manage inventory. The automation’s outcome can be seen in improved process efficiency and reduced costs, culminating in better data-driven patient care and customer satisfaction. 

Also, technology-led solutions can proactively and continually improve processes by which hospitals can enhance their inventory management efficiency, especially in generating Intelligent Goods Received Notes (iGRN), ensuring ease of operations. 

Transforming receipt into insights: where intelligence meets efficiency with iGRN

This blog, hence, aims at highlighting how an automated inventory management system offers process efficiency while standardizing SoPs. The blog will also highlight the features of intelligent GRN (iGRN) coupled with a QR Code-based inventory management system that facilitates greater supply chain operational efficiency.

The need to automate inventory management systems 

The primary goal of any hospital is to deliver quality healthcare services. To do so, in the backdrop, a robust supply chain management system must be in place to ensure adequate availability of life saving drugs, surgical equipment or devices, imaging modalities, and any other critical care supplies.  

This also entails effectively managing working capital, which involves tactical overseeing and managing of funds necessary for daily operations. By maintaining a balanced approach to all financial elements, healthcare businesses can enhance liquidity, support good growth, and attract more business. But all of these are easier said than done.  

Automation, hence, is essential for managing hospitals’ complex inventory processes. By leveraging AI and ML, healthcare organizations can optimize fund management, eliminate paperwork, and gain complete visibility into product lifecycle and utilization. 

Another significant feature of AI-ML based inventory management is the automated system’s ability to read hand-written or printed delivery challans and an in-built ability to convert them into digital formats that enables the staff to overcome process-related challenges. 

While an overview of automated inventory systems has been shared above, detailed explanation and its advantages is as follows: 

Digitally convert delivery challans using AI/ML 

Legacy hospital inventory systems usually rely on simple printed delivery challans or hand-written challans, which can be tough to decipher or can be subjected to many errors. In a hospital environment any errors or discrepancies pertaining to medical goods, drugs, products, etc., could severely impede patient care (in a few cases errors could lead to fatal consequences).  

In this scenario, AI and ML algorithms can automatically extract information from challan images, eliminating the need for manual entry altogether. As AI systems are trained on vast amounts of data, the system can recognize different handwriting styles and extract information with high accuracy. Digital challan data can also be easily integrated with inventory management systems, enabling better data analysis and reporting.

Optimizing inventory related costs 

For the hospital inventory department, the primary objective is optimal management of working capital. But healthcare’s working capital is dynamic, and is faced with innumerable, unforeseen challenges. Resolving those challenges requires skilled human resources, which might not always be at a hospital’s disposal.  

Also, efficient working capital management involves striking a fine balance. Holding too little inventory can lead to stockouts that can disrupt patient care. Conversely, excessive inventory increases working capital level, higher financing costs, and cash availability. 

Automation software has algorithms with built-in intelligence to analyze and optimize stocks and purchases that is powered by a robust data- and process-driven mechanism, requiring minimal manual intervention.  

The software can set ‘reorder instructions’ based on pre-determined minimum stock levels (tailored based on recurring seasonality). When inventory dips below the required quantity, the system automatically flags purchase orders, ensuring timely replenishment and avoiding stockouts. Even in the pharmacy, the AI-led software system can help generate real-time alerts for expiring medications or nearing stockout situations.  

The greatest advantage of Artificial Intelligence based systems is in minimizing human intervention led manual errors in inventory tracking, ensuring that the right supplies are available when needed.  

Not only that, but automated systems can also help ensure compliance with regulatory requirements by maintaining accurate records of product inventory and usage. This can also enhance patient safety by ensuring that only approved and non-expired supplies are used. 

AI and ML tools offer multiple benefits in efficiently managing the stock, including prioritizing the consumption of near-term expiring medical products. The ability of the software to provide real-time inventory visibility provides accurate and up-to-date information on product quantities and locations. Control over inventory levels prevents shortages or surpluses. Such process control abilities ultimately minimize errors in product ordering and consumption, thus reducing waste and unnecessary expenses.  

Improvised intra hospital inventory management   

There are many core departments in a hospital that demand seamless inventory processes. To track, control, and optimize the stock of supplies and equipment within these individual departments is essentially managing the micro level of a hospital’s overall inventory. 

Largely, the seven departments including diagnostic/laboratory; pharmacy; surgery; imaging; radiology; cafeteria; and asset/equipment monitoring. Errors in inventory management can arise from any one of these departments, especially when handled by entry-level hospital staff.  

Implementing an AI dashboard, which is a powerful tool, brings the desired agility and frictionless intra-department inventory management to the table. By providing real-time visibility into inventory levels across departments, dashboards serve invaluable information at the right time to take appropriate decisions without ambiguity.  

By providing real-time visibility into inventory levels across departments, dashboards serve invaluable information at the right time to take appropriate data driven inventory transfer-based decisions without ambiguity. 

It also helps identify trends in usage patterns to predict future needs and optimizes purchasing. In addition, the dashboard helps track vendor performance metrics to ensure on-time deliveries and to negotiate better pricing.  

Enhanced nurse-patient relationship 

Automating tasks like checking stock levels, placing orders, and managing paperwork frees up nurses’ valuable time, which they can better use to tend to patients. Bed side care is what nurses are best at, so automation allows them to focus on what they do best. Providing direct patient care, building relationships with patients, and administering treatments will become the strongest focus for nurses rather than facing the administrative burden through inventory management, which can cause burnout or job dissatisfaction and rendering sub optimal patient care. 

Automated systems decrease the likelihood of human error in inventory tracking, data entry, and order processing. Knowing inventory is optimized and readily available reduces stress for nurses. They will not have to scramble to find missing supplies or worry about stockouts delaying treatment. This fosters a more efficient work environment, allowing them to manage their workload more effectively. 

Streamlining inventory management with QR Codes

To overcome the risks and to bring out seamless accounting of goods, several automation tools can be deployed. First, transitioning to intelligent Goods Received Notes (iGRNs) is vital to improve efficiency and mainly adopt a paperless management system.  

At the procurement and supplies entry level intelligent GRNs can be generated for pharmaceutical products; medical equipment; medical devices; surgical stock; hospital linen; diagnostic test kits; and for all other hospital related supplies.  

As the Goods Received Note (GRN) is a crucial document used in the receiving process to acknowledge the delivery of supplies and equipment from a supplier, registering all vital information in a QR Code can prove advantageous for mapping the entire life cycle of a consignment or a product.

A QR code will be tagged to the inventory items. Scanning the code will lead to a digital record of the item’s details, allowing for quick verification and data updation into hospital systems.”  

The QR code could link to a more comprehensive inventory management system, providing real-time data on quantities, locations, and expiration dates of purchased items. Integrating QR codes with automated inventory systems could expedite restocking procedures, reduce billing-related errors, and indicate medical equipment or pharmaceutical product expiry. Beyond assisting in conducting audits, QR code-based inventory process can help train staff on proper supply handling practices and minimize errors.  

Notably, connecting inventory management systems with EHRs allows for automated tracking of supplies used during procedures thus improving billing accuracy. With the automated tracking of supplies, billing becomes more accurate. The system can automatically generate accurate bills reflecting the exact supplies used, leading to improved revenue capture for the healthcare facility. 

Also, inventory management systems can be programmed to prioritize near-expiry items for use first. This helps reduce waste and ensures patients receive medication and supplies with adequate shelf life. 

Gearing for an automated future

Healthcare, today, is moving from simply treating the health condition to proactively preventing and predicting potential health issues. And AI is poised to play a significant role in this shift by analyzing vast amounts of data to identify risks and recommend personalized preventive measures.  

In the months to come, widespread adoption of software that can integrate automated inventory management systems with Electronic Health Records (EHR) will be witnessed. Advanced technology will be implemented to predict beforehand critical hospital supplies that can bring about personalized treatment outcomes for patients.  

The future of healthcare inventory management, therefore, will certainly be defined by automation, integration, and data-driven insights. By harnessing the power of EHR and automated inventory systems, healthcare facilities can move towards a more efficient, cost-effective, and patient-centered future.