Can we manage blood inventory effectively?

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Background and Objectives

In Australia, we rely on voluntary, non-remunerated donors to provide sufficient blood to meet patients’ needs. For fresh components, the Australian Red Cross Blood Service (Blood Service) is 100% self-sufficient, with only rare phenotypes imported as required. Hospitals and pathology laboratories, as well as the Blood Service, are under increasing pressure from Government/s to improve value for money for blood and blood products, which is resulting in extra demands being placed on the Blood Service. There is also some pressure, in relation to lower age at issue for red cells, and a continuing trend to hold more Group O stock and less of the other groups, especially AB where demand is low. With a typically seasonal inventory pattern for red cells, the Blood Service has focussed on closer management of Blood Inventory. The Blood Service is fully funded by Australian Governments.


The aim of the inventory programme was to improve reliability of blood coming into the supply chain and therefore to improve reliability of delivery to customers. This is measured by average variance in the number of whole blood collection packs being receipted at the Blood Service processing centre. The aim was to reduce the variability in this metric, which would naturally lead to decreased inventory holding requirements, greater control and efficiency, and increased reliability and service to the customers. Order fulfilment is another measure used to demonstrate improvement.


To manage blood inventory effectively, the first step was to introduce a minimum and maximum inventory level, by blood type and by state. This provided a common and visible target to aim for. The bands were calculated by firstly setting a minimum inventory level using traditional supply chain safety stock calculations. The next step was to develop a 12-week inventory forecast, using a number of planning assumptions. One of the core assumptions is the number of appointments booked in the lead up to a donation. To improve reliability, minimum targets were agreed at 3 months out (re-booking time) through to 1 week out. A ‘traffic light’ style appointments portal was developed to provide improved visibility of appointment levels for each collection mode and by state.


Results show that the quarterly standard deviation of blood coming in to the Blood Service inventory has improved from 1711 units to 1285 units in the last four financial years – a 25% reduction. In addition, order fulfilment has improved from 82% to 95%, demonstrating that, with improved planning systems and processes, it is possible to manage inventory effectively. The Blood Service in Australia set a goal to improve reliability of fresh components, in particular, red cells entering finished goods inventory, to improve order fulfilment and provide service excellence to customers. By implementing robust and disciplined planning and reporting systems, reliability has improved, demonstrating that there are methods available to improve the effectiveness of inventory management for blood components.

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