Structure and function of an inventory control system

The basic structure of an inventory control system starts with listing all items used by the
laboratory. The items should be tracked by name or an internal identifier. Each item record
should contain the following fields: catalog number; primary vendor; price; storage location;
department; ROP; DQOH; and alternate fields are also helpful such as the work area,
instrument or other categories (e.g., molecular, POCT, STAT).
Typically, the items to count are organized in such a way as to make clear what is needed to the
person or staff in a particular area of the lab who are responsible for the item(s). These areas
are typically defined by job functions such as a department, work area, instrument, frequency,
and so forth. Most inventory control systems use periodic (cycle) counting rather than a
perpetual system. Remember, a periodic system is a physical count at a defined interval,
whereas a perpetual system tracks items in and out of the inventory in real-time. The item
record shown above, however, is useful for both the periodic and the perpetual system.
Functions of an inventory control system
The primary purpose and function of a laboratory's inventory control system is to ensure that
sufficient in-date reagents are available. Other benefits include:
1. knowing at a glance the QOH, ROP, and DQOH for any item;
2. determining when to order reagents and in what quantity;
3. knowing which lot number is in use, when it will expire, and the QOH;
4. having a requisition for all items which are at ROP.
Other functions useful to have include:
1. tracking items by scanning a barcode label;
2. tracking items sent to offsite locations;

3. calculating the inventory valuation;

4. maintaining a complete vendor database including the purchase order/contract
which contains the details;
5. tracking equipment inventory, asset value, and service history;
6. analyzing/reporting on all aspects of inventory/purchasing.
Types of inventory control systems
There are three basic types of inventory control systems7,8: paper worksheets or index cards;
spreadsheets; and commercial inventory management computerized systems.
Paper worksheets and/or index cards are easy to use and inexpensive. Worksheets or cards
typically are easy to learn, and they work well in a small laboratory with a limited number of
items to track. Drawbacks include the inability to extract objective data for analysis and
difficulty tracking large numbers of items. In addition, the paper system becomes more labor
intensive as greater control is required.
Spreadsheets have the benefit of data storage and retrieval, which allows for some analysis of
inventory levels. A spreadsheet system is inexpensive, easy to use, and can be set up to
provide some analytic reporting for determining the value of the inventory. More complicated
reporting can be challenging, and associating items with other fields such as lot numbers can
be difficult since a relational database may be required. In addition, attempts to automate the
physical count using barcode scanning with a spreadsheet generally is not practical.
Computerized inventory management systems provide many benefits that are hard to obtain
using paper methods or an in-house spreadsheet.7,8 Systems that are specific to the lab can be
used relatively quickly without a significant learning curve or system customization. The
ability to analyze the inventory, item usage, purchasing history, and other areas (e.g., lot
numbers, equipment) are important improvements to spreadsheets and paper systems. A
computerized system allows the lab to automate some of the manual physical counting steps
using barcode scanning and provides the ability to analyze all aspects of inventory control and

purchasing. If the system includes equipment tracking, it can be used to determine the capital
asset as well as track the service history and lifespan of equipment.
The ability to streamline and automate many of the inventory control tasks will be
increasingly important to reduce hands-on time while improving the analysis of trends,
reducing stock-outs, and avoiding expiring reagents. The ability to ensure that the right
reagent in the right quantity is present at the right time is critical to laboratory operations.
Given that reagents are approximately one-half of most labs' operating budgets, a continued
focus on this expense will assist the laboratory in continuing to provide accurate and timely
laboratory testing at the lowest cost.