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A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 1
PAR Level Planning using Oracle Inventory
Health Care Domain Perspective
A white paper on implmenting Periodic Automatic
Replenishment using Oracle Inventory
Abhishek Mishra
August, 2015
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 2
Copyright © 2015
All rights reserved. No part of this publication may be reproduced, stored
in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise, without
the prior permission of the copyright owners.
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 3
Table of Contents
Executive Summary 4
Health Care Industry and Generic Requirements 5
Movement of material in Hospital ....................................................... 6
Periodic Automatic Replenishment ..................................................... 7
Setups and Business Flow for PAR planning 8
Modeling PAR level planning in Oracle Inventory ................................. 8
Setting up Sub Inventories ................................................................ 9
Setting up Item Sub Inventory Association and PAR levels ................. 11
The Business Process ...................................................................... 13
Performing Automatic Replenishment 14
Automatic replenishment Procedure ................................................. 14
Generating Replenishment worksheet............................................... 17
Processing Replenishment Move Order ............................................. 19
Using External Interface for performing the count 21
Applying Actual Usage of Inventory 22
The Solution Design ........................................................................ 22
The Process of Replenishment and Consumption .............................. 23
Alternate Point of view .................................................................... 24
Returning Material back to Supply Echelon Error! Bookmark not
defined.
About the Author 26
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 4
In a Consumption driven supply chain like a hospital,
usually the point of care does not have perpetual On-
Hand Inventory Balance. Yet, being a key link in demand
cycle it needs to plan its items to maintain continuity of
service at the point of care. Replenishment planning
method is ideal for such free stock items which are
stored and consumed at regular intervals. In this white
paper we present a case to establish the usage of
Replenishment count planning for a Hospital Supply
Chain.
Executive Summary
This white paper aims to present a viable solution for consumption
driven supply chains in particular Hospital Supply chain where a
department which does not maintain a perpetual inventory, but by
performing counts and subsequent periodic automatic replenishment
maintains a continuous supply of items for continuity of Services. Main
Stream research in health care insists on applying the practice of actual
usage of inventory for better cost visibility and realistic Inventory
valuations. In oracle both the options of applying actual usage and
planning based on perpetual inventory at point of care can be designed as
a part of replenishment planning.
The case study presented in this document is of a first specialized
Orthopaedic and Sports Medicine Hospital in the Gulf region. We take
both the perspectives of Applying Actual usage of Inventory and Periodic
Inventory planning methods and aim to highlight the difference in the
solutions using Standard features in Oracle Inventory Release 12.
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 5
Health Care Industry and Generic Requirements
In mainstream research it is cited that the supply costs in a Hospital for
clinical items and their handling is on an average 25 to 30% of the
operating budget of the Hospital. (Vijith Varghese, 2012)
The hospital considered for this case is also a combination of both
single-echelon and multi-echelon supply chain. In sections like
Pharmacy and Main store the Vendor supplies the material directly; I
like to call it the Supply Echelon and other departments like dental and
nursing request material from these two sections for their operations,
let’s all the the o su ptio e helo for our u dersta di g.
It’s also worthy to note that all the legs in the multi-echelon are
equipped with cabinets and storage capacity and stock material for use
at the point of care. This makes the departments responsible for
maintaining the plan locally based on consumption and replenish at
regular intervals from the main store and pharmacy on periodic basis. In
this scenario, the departments also play a vital role for generating the
demand for upstream supply chain.
In standard implementation of Oracle Inventory, movement of material
is recorded by the transaction of move orders in most cases. From an
accounting perspective inventory items which are issued to a
department for consumption by the main store, remain to be an asset in
the books, until such time they are used at the point of care on the
patient. This makes each of the departments in the multi-echelon
holder of inventory. This also enforces the responsibility of performing
cycle and physical counting each year for keeping accurate on hand
balances at each of the departments. In most cases the supply chain
staff conducts the annual physical count however the presence of
material across several departments in the hospital makes this task
more difficult and cumbersome.
The generic requirement is to have a system configured to ensure each
department can easily replenish the required items on timely basis from
the Supply Echelon. The Supply e helo ’s a agi g the e dor interaction should have access to information on demand pattern of the
Consumption echelons. It’s important to realize revenue against the
planned capacity of the Consumption echelons within a period of time
due to perishable nature of items used in Health care supply chains.
Part of what you need to do
in the supply chain is to help
your company anticipate
events, and understand the
environment you operate in – physical, political,
economic – around the globe.
Fran Townsen (Former US
official in area of National
Security, CSCMP 2008)
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 6
Movement of material in Hospital
The understanding of movement of material in a hospital is a key to establish the
solution for the hospital supply chain. As depicted in Picture 1, the movement of
material can be established across two parts. First Part is the single Echelon supply
movement from Vendor to the Central Pharmacy and Main store “upply E helo ’s and
Second part from main store or central pharmacy to individual departments like
Anesthesia or Dental Co su ptio e helo ’s .
In this paper, we shall model each of the above echelons as a Sub Inventory in Oracle.
It’s also important to note that the Delivery location will be the Address of the Inventory
Organization (not depicted in the Picture 1) and precise contact person is the user in the
Supply echelon. The Supply echelons are responsible for planning of all the materials
being used in the Hospital and maintain/ track consumption patterns by each of the
Consumption echelons. At this point, we would also like to conclude that the planning
parameter for the lead-time of the same item for the Supply echelon is largely different
from that of the Consumption echelons, due to difference in supply sources. It is the
Supply echelons that are responsible for direct interaction with the material
management department for ordering, replenishment and re-stocking of near expiring
lots of the material in case of consignment inventory.
Vendor
Pharmacy Store
Nursing OT Dental
Athlete
Screening
OPD
Anesthesia
Rehab
Medical
Imaging
Lab
Single
Echelon SC
Multi
Echelon SC
Picture 1: Movement of Material in the Hospital
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 7
It’s also important to note that in event of returns, the movement of material happens
from the Consumption echelons back to the supply echelons. This also is the Achilles
heel for the solution using the replenishment planning in Oracle inventory as the
replenishment planning creates the move order issue transaction and not move order
transfer in case the receiving Sub Inventory is of type Expense. This will be discussed in
detail in latter sections of this paper.
Periodic Automatic Replenishment
Periodic automatic replenishment consists of two important of variables at a very basic
level.
a) The PAR level
b) The period for automatic replenishment.
PAR level is the quantity of item that the department plans to have for a particular
period like a week or a day to ensure operational continuity at the point of care. This is
based on the past experience of average consumption of the item for the said period.
The period for automatic replenishment is the number of days after which the
department supply coordinator does a visual review or count of the items available and
orders for replenishment.
Typically the past history data plays vital role in establishing the exact PAR level for the
item. The common formula for periodic replenishment is
PAR (n) = i × � || where, i= Quantity of item, n= number of days
For example if the total consumption of wound sutures in the outpatient department
per day (n) is 10 (i). The PAR level for a week (period) for wound sutures will be
PAR (7) = 10 x 7 or 70 Stock keeping units.
The department in this case needs to identify all the items that are used by it along with
appropriate PAR levels for a specific period of time.
So, we also establish another critical factor, PAR level for an item is a function of time,
mathematically represented as PAR (n) = f (t).
PAR level planning is perpetual in nature, only the reduction of on-hand quantity by
consumption leads to replenishment of items based on the Replenishment count
quantity or the PAR levels identified for each item. In most cases, the user does a visual
inspection of the material and subsequently orders the replenishment.
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 8
Setups and Business Flow for PAR planning
Modeling PAR level planning in Oracle Inventory
In this section we will elaborate on the key setups in Oracle to model the above case. For sake of
simplicity we will take case of single movement between the Nursing Department and the Main-
Store.
Some Key Considerations for PAR level planning are below
• The Sub Inventory where PAR level planning needs to be enabled must be
a non-asset, non-quantity tracked sub inventory.
• It must have locators defined in it and optionally the capacity of locators
may be specified.
• Item Sub Inventory Association must be done and for each item, Locator
and PAR level must be specified.
• Source must be specified to an internal inventory organization or sub
inventory. In this case study, the source would be MIO-MS, the main
store.
Organization Oracle Definition
Main Inv. Org (MIO) Inventory Organization
Central Pharmacy Sub Inventory (Asset)
Main Store Sub Inventory (Asset)
Dental Expense Sub Inventory
Operating Theatre (OT) Expense Sub Inventory
Anesthesia Expense Sub Inventory
Out Patient Dept. (OPD) Expense Sub Inventory
Nursing Expense Sub Inventory
Athlete Screening Expense Sub Inventory
Rehab Expense Sub Inventory
Lab Expense Sub Inventory
Medical Imaging Expense Sub Inventory
In the Approach I, we take model the
inventory structure without applying
the actual usage of inventory. This
drives definition of each of the
departments in the Hospital
o su ptio e helo ’s as expense
Sub Inventories. The two Supply
echelons namely the Central Pharmacy
and Main-Store are defined as Asset
Sub inventories. In this model the
Inventory valuation of Main Inventory
Organization will reflect only value of
material stored in these two sub
Inventories.
This structure is suitable for extremely
specialized hospitals like the one in
our case of Sports medicine hospital.
Main Inventory Organization (MIO)
Main Store – MIO-MS Nursing – MIO-NRS EXP Asset
Table 1: Sub Inventory Definitions
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 9
Setting up Sub Inventories
Setup of Main Store (MIO-MS, type Asset)
(N) Setup > Organizations > Sub Inventories
Setup of Nursing Sub Inventory (MIO-NRS, type Expense)
Setup of Locators for Nursing Sub Inventory (MIO-NRS, type Expense)
Type: Storage as
its going to stock
material
Based on Material
Status Control –
Active is for
transact-able
locators
Parameters from
Material Status
Control – Quantity
Tracked and Asset
Sub Inventory
PA
R le
ve
l
pla
nn
ing
is
no
t en
ab
led
as th
is is the
So
urce
Su
b
Inv
en
tory
Source for the
Main-store is the vendor as it’s the Supply Echelon Picture 2: Setup of Asset Sub Inventory
Type: Storage as
its going to stock
material
Based on Material
Status Control –
Active is for
transact-able
locators
Inventory
Parameters –
Expense, Non Asset
and Non Quantity
Tracked
PA
R le
ve
l
pla
nn
ing
is
en
ab
led
at
the
Su
b-
Inv
en
tory
De
finitio
n
Source for this Sub
Inventory is the main-store as it’s the Consumption echelon Picture 3: Setup of Expense Sub Inventory
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 10
The PAR level planning method is locator based replenishment and the setup of
locators is mandatory at the Sub Inventory level.
(N) Setup > Organizations > Sub Inventories > (B) Locators
The locators can be specified with the Status of Expense as the Sub-Inventory is of
Expense type
Select Locator Names
by Clicking on
Locator. Optionally
specify the capacity.
Picture 4: Setup of Locators for Exp. Sub Inv
For the above
business case three
locators are specified
in Destination Sub
Inventory.
Picture 5: Setup of Locators for Exp. Sub Inv
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 11
Setting up Item Sub Inventory Association and PAR levels
The setup for Item Sub Inventory Association is a pre-requisite to specify PAR levels for
each locator for the item.
It is important to understand few important aspects related to this setup.
• Assigning items to a sub-inventory does not restrict the sub-inventory to that list of items.
Rather, the items are restricted to that sub-inventory. The receiver of the department can
continue to receive items which are not specified through this association. Item Sub-Inventory
asso iatio is ot a restri tio ; rather it’s a relatio . The sa e set of ite s a elo g to more than one sub Inventories. (Oracle Corp. Inventory User Guide R12, 2010)
• To restrict Items to a specifi “u I e tory, the Restri t “u -I e tories attri ute of the item must be checked at the item definition level.
• PAR Level is an attribute of Item - Sub-inventory – Locator combination. If multiple locators
are assigned to a sub Inventory and more so to an item-Sub-inventory setup, each locator can
be setup for a different PAR level of the item.
PAR level across two
locators for the same
item being set
Source Sub Inventory
Can be specified in
the Item-Sub Inv
association form
Picture 6: Setup of Item- Sub Inv association and PAR levels
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 12
For the Business case, we take example of various sutures used by nursing department along with the
PAR le el for o e eek’s PAR period.
The above data set is modeled in the Item Sub Inventory association form along with the PAR level for
the locators, depicted in Picture 6: Setup of Item- Sub Inv association and PAR levels
Item Description Source Type Organization Source Sub-
inventory
100801 STAPLER, SKIN 35W AUTO SUTURE Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.101 100 EA
100901 SUTURE PDS II 0 90CM AB 1/2 CIRCLE TAPER CUT
HEAVY 36MM Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.101 150 EA
100902 SUTURE PDS II 0 150CM AB 1/2 CIRCLE BLUNT
TAPER 50MM Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.102 200 EA
100903 SUTURE PDS II 1 90CM AB 1/2 CIRCLE TAPER CUT
HEAVY 36MM Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.103 200 EA
MIO-NRS-A-01.100.102 100 EA
100904 SUTURE PDS II 2-0 70CM AB 1/2 CIRCLE ROUND
BODY 31MM Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.102 400 EA
100905 SUTURE PDS II 2-0 70CM AB 1/2 CIRCLE ETHIGUARD
31MM Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.103 120 EA
Table 2: Data for the Setup of Item-Sub Inventory and PAR levels
On Hand Quantity of
all items is set at
1000 Units (1000
each)
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 13
The Business Process
In Oracle, PAR level planning is implemented by using Replenishment counting at sub
Inventory level. The end user performs a count of available On-Hand of all items
associated with the Sub-Inventory and selects appropriate Ordering method while
entering the counts in the replenishment count worksheet.
The key success factor for the implementation of Replenishment count is not in the
product but in the process, reflecting back on the formula, PAR (n) = i × n, we insist that
the discipline of performing the PAR level counting at the end of the nth period, results
in ensuring continuous availability of material at the point of care.
Failure to perform the PAR replenishment in the right period will result in stock outages
and subsequently inventory underage/overage at the main-store due to inconsistent
demand patterns. As the inventory is perpetual and the count entered by the end user
can be subjective based on visual assessment of material. It is recommended to avoid
this practice and perform a proper replenishment count at the end of PAR period. It’s
also worthy to note that Oracle has a built-in interface for entering the counts using a
mobile device. In case the Hospital has built in the bar code scanning for unit dose of
each item, a mobile device can be used to quickly scan and enter the replenishment
counts.
PAR planning is a three-step process.
Step I – The end user performs and enters the count in the Replenishment count
worksheet. Verify the Count Sheet Report in the Expense Inventory.
Step II – Processes the Replenishment count for generation of Move order Requests
(Replenishment Move Order), Verify the Replenishment Report.
Step III – The user in the Main Store (MIO-MS) transacts the move order and sends the
shipment of requested quantity to the End user.
Oracle does not have a built in mechanism to notify the Planner/ user in the main-store
when the Replenishment move order gets generated if move order approvals are not
set. This is a recommended extension for the Inventory implementation.
Store
Nursing
Nursing Perform Item Counts &
enter the Replenishment levels
Process the Replenishment Counts and
verify order report.
I
II
Store
Nursing Dispatch the material to Nursing
Department III
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 14
Performing Automatic Replenishment
Taking a deeper look into the Case Study presented in this paper, the non-tracked Sub
Inventory is MIO-NR“ a d “u I e tory ha i g the O -Hand Quantity is MIO-MS.
To determine the required replenishment quantities of Sutures the user in the Nursing
department need to periodically count (defined as weekly in this case) and request
material from the Main-Store. The system always creates a Pre-Approved
Replenishment move order as output of the counting process.
It can be deduced that there are three possibilities for entering the counts
• Order Quantity – Manually entered quantity for replenishment.
• Order PAR – Replenish the quantity mentioned as PAR quantity for the locator
• Order Deficit – Difference of quantity counted and PAR level quantity for the item.
(PAR Quantity – Counted Quantity)
It is to be noted that count quantity must be entered in the same UOM as the PAR
UOM.
Automatic replenishment Procedure
In the below procedure we would like to describe the manual counting process
(N) Inventory User Responsibility > Counting > Replenishment Counts > Counts
Picture 7: Defining the Replenishment Count
Click Default Items for
populating all Sub
Inventory Items.
Alternately, click lines
to select items
manually Picture 8: Entering the Replenishment Count
Click New to create a
new count (Case
Study Ref: Weekly
Periodic Count)
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 15
Name: Name of the count (Recommended to have a nomenclature for this like Aug-
Wk1, it supports upto 10 Characters Only, for sample entry we choose the name as
Week 1).
Its also important to note that there is no description of the count, so its important to
choose this name wisely for future searchability
Sub Inventory: The Sub Inventroy for which the count is being performed. This would be
the Expense Sub Inventory in our case MIO-NRS
Supply Cutoff Date: Enter the Supply Cutoff date. The replenishment count process
considers only purchase orders and internal requisitions with receipt dates earlier than
or equal to the supply cutoff date. (Oracle Corp. Inventory User Guide R12, 2010)
Count Date: This defaults to the current system date and is the reference for the date
on which count is being entered into the system.
Default Deliver To: This is the delivery location to be printed on the Replenishment
count worksheet, and the List of values lists the Locations available in the system.
Count Using Mobile: The checkbox count using mobile disables manual entry of count
information and will fetch the data from the Replenishment interface as described in
the above section (See: Using Bar Code Reader for counting)
Status: There are three Processing statuses of the Replenishment Count planning.
The Profile Option INV: Replenishment Count Requisition Approval does not have
any impact on the status of the Replenishment move order. The count always creates
Pre-approved move orders only.
Pending
The Counts are being
processed
On-Hold
The Counts are entered
but not processed
Completed
The Counts are processed
and sent for replenishment
Picture 9: Processing Statuses of Replenishment count
Count Type is very
important and needs
to be set correctly for
the appropriate
replenishment. Picture 10: Entering the Replenishment Count
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 16
Clicking on Default Items populates all the Locator Item combinations along with the
pre-specified PAR levels.
Locator: The Locator is the default Item locator of the Sub-Inventory Item being counted
for replenishment.
Item: Item is the Item code being counted, it’s important to note that the description is
shown below in the Item description field for each item in selection.
Count Type: The options available for selection in count type are
- Order PAR: The PAR level for the item-locator combination in the field will be
ordered for the default PAR UOM specified.
- Order Quantity: The entered Quantity of item in specified UOM will be placed on
replenishment move order line. This can exceed the PAR quantity and UOM can be
different from PAR UOM.
- Onhand Quantity: The count is entered into the quantity field and the System
places a replenishment request for the difference.
i.e., PAR Quantity (in PAR UOM) – Onhand Quantity (In count UOM)
Note: If hypothetically the Count Quantity exceeds the PAR quantity, the system
calculates the re-order quantity to be Zero
After saving the counts, close this form to navigate back to the header.
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 17
Generating Replenishment worksheet
Click (B) Report, this triggers the Co . Progra PAR Replenishment Count
Worksheet
Click (B) Process and Report
This triggers two Programs, Process Replenishment Counts a d the report is ge erated i the spa ed progra PAR Replenishment Count Worksheet . The status
of the ou t ha ges fro Pe di g to Co plete o su essful o pletio of the Process replenishment counts program.
Click report to
generate the Draft
Worksheet of the
Replenishment.
Picture 11: Generating PAR Count
Worksheet
Place holder to display
the Actual Replenishment
move order Quantity for
all the lines
Review the
Replenishment work
sheet generated for
the Count.
A Place holder is shown in the
replenishment worksheet to
display processed quantities to
be placed on Order Picture 12: PAR Count Worksheet
Observe the status is Hold
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 18
Click on Process and
Report to view the
final replenishment
lines with re-order
quantities.
Picture 13: Processing the Replenishment Count
The place holder is now
populated with the Actual re-
order quantities for each item
in the designated place in
replenishment worksheet. Picture 8: The Processed PAR Count worksheet
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 19
Processing Replenishment Move Order
The user in the main store (MIO-MS) needs to process the replenishment move orders
generated from the above counting and dispatch the material to the point of care (MIO-
NRS).
(N) Inventory User > Move Orders > Transact Move Orders
The Profile Option INV: Fill & Kill Move Order if set to yes, allows cancellation
of partially allocated replenishment move order lines. This can be updated at
the site level.
Search for type: Move Order
Replenishment to find all
unprocessed replenishment
requests.
Picture 14: Replenishment Move Order Allocate and transact the move
orders. Partial Fulfillment by
the Stores user can be done.
Lot and Serial Control details
must be specified in allocations
for items with such controls.
Picture 15: Allocating Replenishment Move Order
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 20
(N) Onhand, Availability > Onhand Quantity
Picture 16: Processing Replenishment Move Orders
If the Inventory Organization
supports negative balances,
processing of replenishment
move order can drive inventory
negative.
Picture 17: Onhand Quantity after Processing Replenishment order
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 21
Using External Interface for performing the count
Oracle provides an interface for uploading the count data generated using a Bar code
reader into the Replenishment interface and subsequently populate the counts.
The main tables for the Interface are
MTL_REPLENISH_HEADERS_INT
MTL_REPLENISH_LINES_INT
Information must be populated for the below columns for successful validation of data
by the interface program.
Once data is populated from the mobile reader into the interface tables, the programs
Validate replenishment interface and Process replenishment counts can be run to
insert it to the base tables
MTL_REPLENISH_HEADERS &
MTL_REPLENISH_LINES
MTL_REPLENISH_HEADERS_INT MTL_REPLENISH_LINES_INT
REPLENISHMENT_HEADER_ID LAST_UPDATE_DATE
REPLENISHMENT_COUNT_NAME LAST_UPDATED_BY
COUNT_DATE CREATION_DATE
LAST_UPDATE_DATE CREATED_BY
CREATION_DATE COUNT_TYPE_CODE
CREATED_BY
LAST_UPDATED_BY
SUBINVENTORY_CODE
PROCESS_STATUS (Must be set to 2)
PAR Level Planning using Oracle Inventory
A C a s e S t u d y o f R e p l e n i s h m e n t p l a n n i n g i n H e a l t h C a r e 22
Applying Actual Usage of Inventory
Knowing and tracking what is available on the shelf is critical in any consumption driven
supply chain. In Hospital supply chain due to obsolescence, pilferage, spoliation,
deterioration and breakage every year sunken costs occur. The two important aspects of
inventory management in a hospital are (Ozcan, 2009)
a) The service level, availability of right goods in required quantities to be available
at point of care
b) Minimization of ordering and carrying inventories
Drawing reference based on (Vijith Varghese, 2012), we establish a solution which can
be implemented using Oracle Replenishment planning to realize and report actual usage
of inventory at point of care.
The Solution Design
To design the solution we continue forward from our approach mentioned in the earlier
sections of Replenishment planning process.
Extending the model, we introduce another Sub Inventory for the nursing department,
the Nursi g Asset “u I e tory. It’s i porta t to note that the Nursing Asset Sub-
Inventory (MIO-NRS (A)) is an exact replica of the Nursing Sub-Inventory (MIO-NRS). It
has the same item-sub Inventory association, PAR levels and number of locators as its
expense counter-part.
At any given point in time, the actual available inventory in the Nursing station is truly
represented by the MIO-NRS (A) and the consumption is represented by MIO-NRS.
It is critical to establish a process for the consumption and replenishment separately in
this design. The consumption is established when movement of material happens from
Main Inventory Organization (MIO)
Main Store – MIO-MS
Nursing – MIO-NRS EXP
Asset Nursing – MIO-NRS (A) Asset
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Asset Sub-Inventory to Expense and replenishment happens when movement of
material happens from the Main Store (Supply Echelon) to the Nursing Asset sub
Inventory (Again a supply echelon). A better understanding can be arrived at by looking
the below example.
Source Definition in MIO-NRS (A)
Source Definition in MIO-NRS
The Process of Replenishment and Consumption
To establish the process, now we split the transactions into two phases
Phase I – Replenishment of material from Main Store (Supply Echelon) to the Nursing
Asset Sub Inventory on a weekly time period
Phase II – Consumption of material in the Expense Sub Inventory on a detailed basis.
Item Description Source Type Organization Source Sub-
inventory
100801 STAPLER, SKIN 35W AUTO SUTURE Sub-inventory MIO MIO-MS
Locator Description PAR Level UOM
MIO-NRS-A-01.100.101 100 EA
Item Description Source Type Organization Source Sub-
inventory
100801 STAPLER, SKIN 35W AUTO SUTURE Sub-inventory MIO MIO-NRS (A)
Locator Description PAR Level UOM
MIO-NRS-E-01.100.101 100 EA
Store
MIO NRS
(A)
Weekly Item Counts & enter the
Replenishment levels
Process the Replenishment Counts and
verify order report.
Store
MIO NRS
(A) Weekly Dispatch the material to Nursing
Department
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The design assumes usage of a mobile device to perform the count and on a
daily basis, populate the replenishment count interface. The process is simple,
count before consumption daily, count before replenishment weekly.
In absence of the mobile device, the staff at point of care would have to enter
the daily count in the form and save it before issuing the material. This is
relatively easier than entering a move order issue transaction as it reduces data
entry effort only to selection of item and entering of the quantity being issued.
This establishes the MIO-NRS (A) as the Shelf inventory holder and at any given
point in time a report can be run to track the Onhand quantities in the Nursing
Department.
This process also enables in creating a consistent demand pattern and
smoothing out the temporal demands and variances at the point of care.
Alternate Point of view
The same functionality and results may also be achieved by eliminating the Expense sub-
Inventory definition and using the mobile device to directly create a move order issue
from MIO-NRS (A) each time the material is issued at point of care. Although this sounds
like a better solution, this requires technical development effort and a compulsion to
have the mobile device to capture the outgoing material.
MIO NRS
(A) MIO NRS
The Scheduled Validate and Process counts
program depletes the Asset sub Inventory
with Daily consumption
Using Mobile Device the Nurse Scans the
item prior to usage at point of care
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References
Oracle Corp (2010). Inventory User Guide R12. Oracle Press.
Ozcan, Y. A. (2009). Quantitative Methods in Health Care Management Techniques and
Applications.
Pohl, E. R. (2012). Healthcare vs. Retail Gap. Fayetteville: Center for Innovation in
Healthcare Logistics, University of Arkansas.
Vijith Varghese, M. R. (2012). Applying Actual Usage Inventory Management Best
Practice in a Health Care Supply Chain. Int. J Sup. Chain. Mgt.
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About the Author
Abhishek Mishra is a Senior Oracle Supply Chain Management
Consultant. He has participated in several turn-key engagements for
customers around the globe and is known widely for his skills of
applying latest theories and research in Oracle Applications System.
He has worked in CPG, Education, Manufacturing, Mass Media & Sports
Management Businesses across implementations, upgrade and support
projects, and is known as a versatile consultant in Oracle space.
He can be reached at [email protected] and 974-66484328.
Alternately you can establish contact on below Social platforms
https://qa.linkedin.com/in/abhishekmishra47
@mishranomics