# Business development

What are the Best Practices for Healthcare Inventory Management?

Red Rocket teamApr 17, 20256 min read

Do you still think that managing hospital inventory using Microsoft Excel is an efficient solution? In fact, even a small hospital can have a huge inventory. It covers various medications, hospital equipment, and even patient information. Proper healthcare inventory management ensures that you have all the things you need to run your hospital efficiently.

As practice shows, every business has its own vision of inventory management software. Some hospitals have implemented state-of-the-art AI-based automated systems, while others record all data in paper notebooks. Fortunately, in 2025, there are plenty of opportunities to improve efficiency and reduce costs for your company. We're talking about inventory management systems and in this article, we'd like to review the best practices that managers of hospitals, beauty salons, hospitals, and other healthcare facilities should know about!

Blogpost Cover "the Best Practices for Inventory Management""

What Is Healthcare Inventory Management and Why Does It Matter?

We suggest starting this article by defining the term «healthcare inventory management» if you still don't know what it is. Simply speaking, this is a process allowing a business to operate efficiently without having a surplus or shortage of medicines, equipment, and other items. Generally, this process involves controlling the flow of patients, frequency of medication utilization, equipment maintenance, and other important aspects for the operation of any facility from the healthcare industry.

According to statistics, the medical technology market right now is experiencing rapid growth. This means that new technologies, drugs, and techniques are emerging on a regular basis. This is one of the main reasons why it is right for you to implement inventory control.

Why Is Effective Inventory Management So Critical in Healthcare?

When it comes to ineffective hospital inventory management for eCommerce projects, the main consequences are losses and decreased customer loyalty. Business owners are more likely to lose profits if they have not properly designed their inventory management system. However, what about the healthcare industry? The main reason why you should spend more time on inventory management process is the safety of your patients. Imagine what would happen if your hospital had a shortage of important drugs or equipment for critically ill patients.

On the other hand, some drugs may cost too much and have a limited life span. If you don't use the drugs in time, you will be left with only one thing to do: dispose of them. As a result, unused stock of medication or equipment can negatively impact your facility financially. An effective inventory management system can help achieve many goals, including optimizing costs, increasing patient loyalty, and providing better service and environment at your hospital.

What Types of Healthcare Inventory Management Systems Exist?

Different healthcare facilities may use different methods to account for consumables, medicines, and equipment and also to forecast the required stocks. Two standard approaches are commonly used:

Periodic inventory;
Perpetual inventory.

Each of these methods has its own pros and cons that you should definitely be aware of. Below we would like to tell you more about best practices for healthcare inventory in 2025.

What Is Periodic Inventory?

A periodic inventory system takes a state of inventory levels once at periodic intervals of time. This approach reviews the new state and uses the new state to calculate the number of new items to order. In the healthcare space, this means that department heads or designated employees do weekly or monthly checks of used supplies to determine what needs replenishment.

This is a simple and relatively cheap system with a risk of supply shortage between updating and overstocking. Smaller facilities or departments with a predictable inventory usage pattern work best. Yet, it may not be suitable for environments that need constant access to the latest real-time supply data.

What Is Perpetual Inventory?

With dedicated software, a perpetual inventory system is a real-time tracking of all inventory movements. Each item, whether medical equipment, consumables, or pharmaceuticals, is logged into a centralized system. If the system is used, then sit cans or distribute the inventory records, which are updated automatically.

This method gives healthcare professionals the visibility they need into what existing stock they have available at the moment and reduces the risk of the resulting shortages. This technology and training are required to be successfully implemented, but it greatly improves accuracy and efficiency. It is especially valuable in fast, complex hospitals with large inventory flows.

What Are the Key Benefits of Healthcare Inventory Management?

Hospitals that value their reputation and always strive for the best should implement modern onsite inventory tracking systems. It's not just a fad; it's key to reducing costs, increasing efficiency, and providing better service to your patients. As you may have already realized, inventory management software has many important benefits, and below we want to talk about them.

Cost Reduction

Good inventory management minimizes waste and overstocking so that emergency orders can be avoided. Healthcare facilities can ensure that procurement costs are brought down as they accurately track usage and forecast needs to avoid the expenditure on expired or unused items.

Operational Efficiency

An inventory system that is streamlined saves staff time by eliminating the manual work and making sure that the necessary items are on hand at all times. This is quick throughput to workflows, fewer supply disruptions, and better department coordination, leading to attorneys being able to center more around patient care rather than logistics.

Impact on Patient Care

Having an accurate inventory of medical supplies and medications ensures they are always available. Why is it so important? It reduces treatment delays and improves patient outcomes. Access to the right tools gives the staff confidence and helps maintain continuity in urgent or critical healthcare. It makes care quality better.

Compliance and Risk Mitigation

It also helps support regulatory compliance through maintaining records of the usage of stock, from expiration dates and supply chain. It helps to reduce the risk of violation, recall, or legal disputes. Another benefit is ensuring that all healthcare operations are offering safe and standardized patient care.

How Do You Choose the Right Inventory Management System?

Surely, you would like to improve the efficiency of your facility and reduce costs. And so, in order to choose the right system, you need to pay attention to several aspects. Here are the factors you should consider:

Number of employees;
Number of patients;
Scaling.

There are also many useful tips to help you get the best inventory tracking system. For example, opt for automated solutions. If you want to manually record all the expenses and necessary items in the inventory, it can take a lot of your time. Automated supply management will help you save time, increase efficiency, and also reduce costs.

What Should You Consider Based on Facility Size and Needs?

Any good inventory management system will excel with an operating facility that fits its size and complexity well. For operations of smaller clinics with low inventory turnover, simpler, cost-effective periodic systems may be preferable. They are simpler to deal with and do not cost a lot in terms of technological investment or training.

On the other hand, larger hospitals or facilities that are multi-departmental need real-time visibility, automation, and integration with other systems such as EHR or procurement platforms. Systems of this scale are required due to high patient volumes and a variety of inventory categories to avoid stockouts and inefficiencies. You should always match the system’s capabilities with your facility’s workflow and demand patterns.

What Are the Key Evaluation Criteria?

For evaluating the healthcare inventory system, consider usability, scalability, capability to integrate, and reporting features. Staff should adopt the system easily, the system should be flexible enough so it can grow with your facility and you won’t need to undertake a complete replacement, which will bring in the whole staff to retrain on a new system … and of course, it must be compatible with existing software to maintain smooth operations.

Also important are accuracy and automation, like barcode scanning, real-time tracking, and automated alerts. Tools to help with forecasting and compliance are provided by strong reporting and analytics. Last, think of vendor support, security of the data in the platform, and the total cost of ownership. An efficient, risk-reduced, and flexible system is a well-chosen one.

Final Thoughts

As you may have already realized, it is critical for any healthcare provider to have an advanced inventory control system in place. Why is that? This way, you reduce the risk of shortages or stock-outs of supplies, medications, and equipment. This helps to reduce costs, increase operational efficiency, and also improve the loyalty of your patients. If you are looking for a reliable automated systems developer for your healthcare facility, consider Red Rocket. We can help with custom software that helps you track costs and forecast inventory.

Frequently asked questions

What happens if inventory is mismanaged in a hospital?

Poor healthcare inventory management can threaten the flow of hospital operations as a whole. In the first place, missing or delayed supplies of medicines can affect patient care and the established schedule of operations.

How does automation improve healthcare inventory management?

Automated inventory management systems significantly enhance healthcare organizations by providing real-time inventory data that supports an efficient healthcare inventory management strategy. By utilizing cloud-based inventory management, hospital staff can update inventory effectively, reducing the need for manual inventory checks and streamlining the inventory processes. This inventory management technique allows for regular inventory audits and accurate inventory counts, minimizing excess inventory and ensuring that inventory needs are met. Consequently, this leads to cost savings and improved management workflow, essential for an efficient healthcare supply chain.

Who is responsible for managing inventory in a hospital setting?

Healthcare inventory management is usually controlled by hospital administrators. In turn, hospital administrators can delegate part of the supply chain management tasks to the responsible persons in each department of the hospital. In this way, they collect important information on requirements from different departments to create a common inventory list.