MMHA 6700 Week 6 Supply Par Level Analysis Example

Empty Bins on Tuesday Night: A Par Level Analysis of Intravenous Start Kits on a Medical-Surgical Unit

Student Name

Walden University

MMHA 6700: Healthcare Operations

Instructor Name

Month Day, Year

Empty Bins on Tuesday Night: A Par Level Analysis of Intravenous Start Kits on a Medical-Surgical Unit

The Problem

Nurses on 5 West, the 32-bed general ward at Linden Ford Medical Center that this course's operations work keeps returning to, report running out of intravenous start kits several times a month. Each kit holds the supplies needed to place a peripheral intravenous line: tourniquet, antiseptic, dressing, tape and gauze. When the bin is empty, a nurse must borrow from another unit or wait for central supply, delaying fluids, antibiotics and admissions. The unit manager's first proposal was to raise the par level, the maximum quantity the bin is stocked to, from 40 to 60.

This analysis asks whether the par is too low or whether the replenishment schedule is mismatched to when kits are used. It shows the par calculation in full, so each assumption can be checked.

How Par Levels Work

In a periodic replenishment system, a supply technician counts each bin at a set time and restocks it to its par. The par should cover expected use until the next replenishment plus a buffer for variation, often called safety stock. A common working formula is: par equals average daily use multiplied by the days between replenishments, plus safety stock. Safety stock depends on how much daily use varies and how much risk of running out the hospital will accept. Hospital materials management research has found that internal logistics, including how and when units are restocked, accounts for much of supply cost and many service failures, and that replenishment policies are often set by habit rather than analysis (Volland et al., 2017).

Usage Data

Kit use was pulled from the unit's automated supply cabinet for eight weeks. The figures are illustrative.

Use follows admissions. Every new patient needs at least one line, and many need a second within a day. The midweek peak in kit use mirrors the midweek peak in scheduled surgical admissions and occupancy found in the Week 5 operating room review.

Table 1

Daily Use of Intravenous Start Kits on 5 West (Illustrative, 8 Weeks)

Use peaks Tuesday and Wednesday, when admissions to the unit peak, as earlier assignments this term found for the hospital as a whole.

Replenishment Timing

Central supply restocks 5 West once a day, at 07:00, to a par of 40. That is the core of the problem. A par of 40 restocked at 07:00 must last until 07:00 the next day. On a Tuesday, when average use is 31 and the highest day reached 42, the bin will run low by evening on an average day and empty on a busy one. Admissions to the unit arrive mostly between 14:00 and 22:00, after the emergency department's afternoon boarding queue starts to clear, so most kits are used in the second half of the replenishment cycle, when the bin is already depleted.

Applying the formula: with one replenishment a day, the time covered is one day. Average Tuesday use is 31. Daily use varies; the standard deviation on Tuesdays over eight weeks was about 6 kits. To keep the chance of a stockout on any given Tuesday to around 5 percent, safety stock is roughly 1.65 standard deviations, or about 10 kits. Par for Tuesday under once-daily replenishment is therefore about 31 plus 10, or 41. The current par of 40 is just short on average and well short on busy days.

Two Options Compared

With two replenishments, each cycle covers about half a day. Average use per cycle on a Tuesday is about 16, and the afternoon cycle, which carries more admissions, about 19. Adding safety stock of about 7 kits for half a day gives a need of roughly 26 per cycle, well within the current par of 40.

Raising par to 60 would also prevent most stockouts, but it puts more stock on the unit than it needs, takes bin space and, in hospital experience, larger visible stock invites hoarding in patient rooms and pockets, which hides usage and raises waste. Stakeholder research on hospital inventory systems found that nurses, supply staff and managers often hold different views of what a good inventory system looks like, with nurses valuing availability and supply staff valuing lower stock (de Vries, 2011). Option B gives nurses availability without the cost of extra stock.

Table 2

Raising Par Versus Changing Replenishment Timing

Option B meets demand with less stock, because each replenishment covers half a day rather than a full day.

Recommendation

Adopt Option B for 5 West: keep the par at 40 and add a 15:00 replenishment on weekdays. Measure stockouts reported by nurses and borrowed kits from other units for eight weeks. If stockouts fall to near zero, apply the same analysis to the other high-use items on the unit, such as saline flushes and blood culture bottles, which follow the same admission pattern. Ask central supply to review whether the 15:00 round can cover other medical-surgical units with similar afternoon admission peaks, since the added labor cost falls sharply when one technician serves several units on one route.

Limits

Eight weeks of cabinet data miss seasonal peaks. Cabinet records count kits removed, not kits used, so hoarding inflates apparent use. The safety stock calculation assumes daily use follows a roughly normal pattern, which may not hold on very busy days. The analysis covers one item on one unit.

Conclusion

The intravenous start kit stockouts on 5 West come from replenishment timing, not from too small a par. Kits are used mostly in the afternoon and evening, but the bin is restocked once at 07:00. A second, afternoon restock lets the current par meet demand with less stock on the unit than the manager's proposal would require. The same pattern, admissions concentrated in the afternoon and midweek, shapes supply as it shapes beds, and it supports the wider argument that hospitals gain more by matching resources to the timing of demand than by adding capacity everywhere (Litvak & Fineberg, 2013).

References

de Vries, J. (2011). The shaping of inventory systems in health services: A stakeholder analysis. International Journal of Production Economics, 133(1), 60-69. https://doi.org/10.1016/j.ijpe.2009.10.029

Litvak, E., & Fineberg, H. V. (2013). Smoothing the way to high quality, safety, and economy. New England Journal of Medicine, 369(17), 1581-1583. https://doi.org/10.1056/NEJMp1307699

Volland, J., Fügener, A., Schoenfelder, J., & Brunner, J. O. (2017). Material logistics in hospitals: A literature review. Omega, 69, 82-101. https://doi.org/10.1016/j.omega.2016.08.004