CC BY
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Romulo de Area Leao Araújo Sobrinho, Graduate Student of Industrial Engineering Federal University of Piauí, E-mail: romulo.leao@hotmail.com
APPLICATION OF THE ABC CURVE IN THE STOCK MANAGEMENT OF MEDICINES FOR TREATMENT OF ONCOLOGY IN A HOSPITAL OF HIGH COMPLEXITY IN TERESINA
Abstract: Due to the intensification of the market race, managers are constantly in search of methodologies and management models that best meet the needs of the company and the clients, in this case generating competitive advantage. In this context, inventory management offers tools and methods that help ensure a satisfactory level of service and low logistic costs, including the ABC classification. In view of this, this study aimed to analyze a specific group of medications that presented inventory movement in the 18-month interval, in a hospital of high complexity in Teresina, Piauí. Through the ABC classification, two alternatives were used to work with the classification, which should be aligned according to the strategic planning of the company, providing the level of service desired and optimization of logistics costs.
Keywords: ABC Curve, High Complexity Hospital, Stock Management, Medicines, Oncology.
Inventory management, which interacts directly with The aim is to use the ABC Curve, a stock manage-
transportation and warehousing, is a fundamental func- ment tool, to list the different drugs in the hospital phar-
tion of integrated logistics, which is divided into inbound logistics (supply management and supplier relationship), industrial logistics (planning, scheduling and production control) and outbound logistics (physical distribution of products and customer relations). Thus, an efficient inventory management allows the desired level of service and minimum logistic cost [5].
In hospitals, there are several types of medicines, with varied demand, for various purposes and of varying prices, so keeping stockpiles of them is a rather arduous task, and if wrongly controlled, it can generate unnecessary cost for the hospital. In this way, the ABC classification appears as a crucial tool for these businesses because, in addition to being drugs that usually have high costs, the consequence of their lack in stock can be disastrous for the hospital image. The ABC curve, if performed correctly, allows management to determine adequate levels of inventory and control procedures[7].
Given the complexity and importance of administering a hospital's stock of medicines, we ask: How is the ABC Curve method for controlling and managing drug stocks developed and processed?
macy in question, identifying the priority ones, which should be given more attention. ABC Curve separates the different products into three classes, according to the representativeness of each item, which is calculated by multiplying the annual consumption of each item by its cost, making a listing in decreasing order and calculating the relative percentage of each item in relation to the total cost of the inventory (100%) [2].
The curve ABC or 80-20, is based on the principle of Pareto in which it is a statistical classification of materials, which considers the importance of materials, based on the quantities used and their value. Also according to the author, in an organization, this tool is widely used for stock management, and is also used to define sales policies, to determine priorities, to schedule production, etc [8].
Classically an ABC analysis consists of separating the stock items into three groups according to the annual demand value [3].The differential of the use of the ABC curve in inventory control is given by the classification of the items in classes A, B or C, in view of their costs and quantities. Therefore, the most important items are in small numbers and of high value, they should be controlled with greater caution [9].
APPLICATION OF THE ABC CURVE IN THE STOCK MANAGEMENT OF MEDICINES FOR TREATMENT OF ONCOLOGY IN A HOSPITAL OF HIGH COMPLEXITY IN TERESINA
An ABC classification of typical inventory items presents a configuration in which 20% of the items are considered A and that they account for 65% of the annual demand or consumption value. Items B represent 30% of the total number of items and 25% of the annual demand or consumption value. The remaining 50% of the items and 10% of the annual consumption value are considered as class C. Although it is known that these percentage values may vary from company to company, it is important to note that the ABC principle in which a small percentage of items is responsible for a large percentage of the annual demand or consumption value, it usually occurs [10].
To prove the importance of inventory management from the application of the ABC tool, a case study was carried out at a High Complexity Hospital in the city of Teresina-PI, whose main activity is oncological patient treatment, being a national reference center in its segment. The case study method involves an in-depth examination of an individual, a group, or an organization by a researcher or a team of researchers [1].
With regard to the data collection technique for the construction of the ABC curve for the control of drug stocks, a documentary survey was carried out with the warehouse and the purchasing sector, where information was collected about the cost and consumption of each item which makes up your inventory. The docu-
ments are used as sources of information, indications and clarifications that bring their contents to elucidate certain questions and serve as evidence for others, according to the researcher's interest [4].
The adoption of ABC classification methodology comprises three phases: elaboration of the master table; construction of the chart; and interpretation of the graph [6]. Initially a table containing the demand and inventory values of each item was constructed, based on documents and purchase statements of the 18 months analyzed by the survey. The quantity of products sold in the period was related to their unit prices and then the revenue of each item (price x quantity sold) was obtained.
The hospital has an immense catalog of products, from foods that are supplied to patients, clinical equipment, administrative materials, to very expensive oncological drugs. Between January 1, 2015 and June 30, 2016, purchases of 6194 different items were made. 151 of these items are medicines intended for the treatment of patients with some oncological pathology, the hospital's flagship.
With the data provided by the company, about the monthly sales of the products, the products were classified taking into account the individual quantity sold and the unit price. Tables 2 and 3 give an overview of the relationships between classes A, B and C and their respective percentages of sales and monthly revenue.
Table 1. - Curve ABC from Revenues
Classification % of Revenues % of Items
A 80,49% 25,83%
B 14,96% 24,50%
C 4,55% 49,67%
Table 2. - Curve ABC from Sales
Classification % of Sales % of Items
A 80,81% 11,92%
B 14,37% 20,53%
C 4,82% 67,55%
The ABC classification of the revenues allowed to define 39 items as class A, 37 items as class B and 75 items as class C. The ABC classification by quantity of sale allowed to define 18 items as class A, 31 items as class B and 102 items as belonging to class C.
The items Gosserrelin 10.8 mg, which despite having an average monthly demand of only 90 units, generated a revenue of R$ 83,467.29 and the Trastuzumabe 440mg that has a demand of only 3 monthly units but
generates a revenue of R$ 30,454.73. In the opposite direction, for example, is the Diethylstilbenol 1mg that has a demand of1167 units monthly, but only generates R$ 551.13 of revenue for the hospital.
If the curve is a function of sales, the above items, Gos-serelin, Trastuzumab and Diethylstrobinol, which belong to classes A, A and C, respectively, in the revenue curve, are all in class C, considering monthly average demand.
In this way, we can see how not always the product that sells the most is the one that generates the most revenue, or the one that generates the most revenue is the one that has the greatest demand. Simpler or easier to get items, such as Dipirone Sodium, which patients can buy at any pharmacy without a prescription, have a low contribution margin, and although they sell a lot, they are weak in relation to the revenues. On the other hand, medications such as Trastuzumab 440mg that are used in oncology patient treatments and are only marketed in hospitals of high complexity, have a contribution margin of up to R$ 9,000.00.
Due to this variation that occurs between the curves, it is necessary to decide which are the criteria to be analyzed to adopt the curve: we intend to manage the inventory based on the turnover of the inventory, that is, based on the quantity of sales of each item, or do you intend to manage based on the amount that the item adds to the hospital's income, that is, based on your monthly contribution margin?
If it is decided to adopt the curve based on the turnover of the stock, one should study the physical arrangement of the stock/warehouse and place in more accessible areas the products that are usually sold, so that the loading and unloading time and delivery of the reduced. In the other case, if the decision is made to adopt the curve based on
the revenues generated by each item, the authors suggest that tools be used to ensure that there is no shortage of the product in the inventory, such as resupply point calculation, economic lot, resupply quantity and security stock.
However, the authors of this paper argue that there is a possibility of adopting the two ABC curves and integrating them so that together they can serve as a hospital stock management tool, each one with its purpose, described above.
Finally, it is emphasized that the ABC curve can be used as a tool to support decision making, depending on its purpose. For example, in the molds of the curves constructed here, with the same items, it would be possible to construct ABC curves using as criteria the maintenance cost of the inventory, if it were desired to reduce security inventory costs, the fixed cost of the purchase, if the objective was to find out which drugs should be purchased in greater quantity, in order to minimize those costs, the shelf-life and stability of the medicine if the intention was to reduce the loss of medicines.
In this way, it was proposed to implement the ABC classification in hospital inventory management, in order to reduce unnecessary inventory costs, increase loading and unloading productivity, and avoid the lack of items that generated more profit for the institution.
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