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Holding inventory is a way of life. Everybody carries inventory of some kind. In my home, the central supply location is the kitchen. In supply chain speak, my kitchen is a multi-bin facility designed to optimize labour and storage. I also have a separate supply location for specialty items which require refrigeration. This would be the products that fall into the dairy and meat category. Some items are critical. Running out of sugar is one thing but a coffee shortage will definitely disrupt operations.

 

 

Running out of coffee, however terrifying for my family, does not compare to the effect of inventory shortages on productivity and ultimately patient outcome in a healthcare scenario. Hospitals must play it safe by holding inventory to carry them thru probable spikes in usage. I use the word probable quite deliberately because probabilities play a big part in determining how much to invest in safety stock.


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