Evaluation of Pharmaceuticals Inventory Management in Selected Health Facilities of West Arsi Zone, Oromia, Ethiopia

Abstract

Background: Effective inventory management ensures an uninterrupted supply of safe, effective, and affordable pharmaceuticals which could be achieved through developing ABC-VEN (Always, Better, Control-Vital, Essential, Desirable) and FSN-XYZ (Fast, Slow, Nonmoving-High, Medium, Low Value) matrix analysis. ABC-VEN matrix analysis is used to control inventory according to their annual consumption and on their functional importance whereas, FSN-XYZ matrix analysis is applied to control inventory by identifying the items to be discarded and the amount saved during the closing of annual accounts. Objective: To evaluate inventory management in selected health facilities of West Arsi zone, Oromia regional state for the year 2016-2018. Methods: Facility-based cross-sectional descriptive study complemented with a qualitative study was conducted in fourteen health facilities. Data were collected from goods issuing vouchers for the year 2016-2018 to perform ABC-VEN matrix analysis. The frequency of issue was collected to perform FSN analysis and the value of each closing stock was taken to get XYZ analysis. Results: From the ABC-VEN matrix analysis, 26.6% of items were Category I of which the highest proportion were taken by class A and V items consuming 84.7% of annual drug expenditure (ADE). The remaining 49.2% and 24.2% of the drugs accounted for only 13.2% and 2.1% of the ADE being category II and III, respectively. Based on FSN-XYZ matrix analysis findings, category I with 41.% item share account for the highest budget (average 86.5% of values). Of this category, the XN group-non-moving and high-cost drugs had the high value (20%) which need managerial measure. In category III, the ZN group items, being 25% of drugs, only had 2.2% of value-that may increase wastage, inventory holding cost, and shortage of storage space. Conclusion: The matrix analysis for inventory control is a strong tool that enables one to identify items requiring close monitoring. The coupled ABC-VEN matrix analysis, combining their individual advantages-inventory's cost and its functional importance help in achieving a meaningful inventory management. However, to control the stock at an appropriate level with minimum shortage and oversupply, it has to be supported by XYZ-FSN matrix analysis. The XYZ-FSN matrix benefits the health facilities to determine the level of inventory with high value in dead-stock, and to take measures like transferring to others, discarding, or saving.

How is Information from ABC–VED–FNS Matrix Analysis Used to Improve Operational Efficiency of Pharmaceuticals Inventory Management? A Cross-Sectional Case Analysis

“…In comparison to other studies conducted in Baghdad, India, and Ethiopia, the proportion of vital items and ASV was very high. 14 , 21 , 29 According to the findings, V–items amounted to 18.1%, 19.49%, and 35.1% of total item expenditure in their studies. The difference could be that the agency manages a compiled list of medications from customers with varied levels and preferences.…”

“…Our findings are consistent with previous studies conducted in India, Turkey, and Ethiopia, which found that class A-items contributed to 72.9%, 80%, and 80.1% of annual drug expenditures, respectively. 17 , 29 , 30 This analysis would enable managers to focus more on class A-items with tight control and no inventory discrepancy, while class C-items would have very little control. As a result, the analysis can assist logistics managers in developing inventory count policies (class A-items can be counted once every week, B-items biweekly, and C-items monthly), and stocking levels (arrange more frequent purchases or delivery of smaller quantities of class A-items).…”

“…This result is lower than that of Manivel, Ranganathan, 2016, and Jobira et al, 2020, who uncovered that 46.03% and 35.3% of F-class items accounted for 56.30% and 78.4% of total value, respectively. 24 , 29 The variations can be attributed to the nature and numbers of items analyzed and differences in the study setting and methodology employed as pharmaceutical needs vary by situation and country. To minimize the time and labor cost of put-away, picking and packing, and effective use of material handling equipment, the F items should be placed nearest to the order marshalling and dispatch areas in the warehouse.…”

Matrix analyses of pharmaceutical products for the years 2017 to 2019 among public health facilities in Hadiya zone, Ethiopia: a cross-sectional descriptive study

“…The study conducted in Kenya revealed that there was a huge mismatch between the criticality of the product (VEN) and expenditure-based classification (ABC) of pharmaceutical items [ 19 ]. FSN–XYZ matrix analysis done in Ethiopia showed that an unexpected amount of budget (20%) was disbursed on high-cost and non-moving pharmaceutical items [ 20 ]. Moreover, the study conducted in northern Ethiopia showed that a significant amount of the annual budget (75.86%) was spent on very few pharmaceutical products (17%), which needs management review and engagement in the whole process of the hospital's supply chain decisions [ 21 ].…”

“…Most of them addressed ABC-VEN alone in the same types of health institutions, e.g., [ 7 , 21 – 23 ]. The others studied at a supplier agency [ 11 ] or in a single zone [ 20 ]. Yet all of them lacked triangulation with qualitative data to provide a deep and complete understanding of the phenomenon.…”