Kanban vs Perpetual Inventory

I have been in many conversations lately on periodic automatic replenishment and putting both feet in or supply plaining better with perpetual. So lets take the top of PAR with Kanban and compare to Perpetual Inventory Management. Both are two distinct approaches to healthcare supply chain management, each with its own set of advantages and limitations. Later I will put thoughts on paper with the supply planning and the other argument on removing the scan.

Approach and Control Mechanism:

Kanban Par Management: Kanban is a pull-based system that relies on visual cues or digital signals to trigger the replenishment of supplies when inventory levels reach a predefined "par" level. It is a simple and intuitive approach that encourages a lean inventory strategy.

Perpetual Inventory Management: Perpetual inventory is a continuous tracking system that uses technology (e.g., barcode scanners or RFID tags) to monitor real-time inventory levels. It provides ongoing updates about stock quantities, allowing for immediate adjustments when stock levels change.

Inventory Optimization:

·????????Kanban Par Management: Kanban helps optimize inventory levels by setting par levels based on actual usage and demand. It reduces the risk of overstocking and stockouts, as replenishment occurs only when necessary.

·????????Perpetual Inventory Management: Perpetual inventory systems also aim to optimize inventory levels through real-time tracking. However, they require accurate data and robust technology to achieve optimal results.

Implementation Complexity:

·????????Kanban Par Management: Kanban is relatively easier to implement, especially in healthcare settings where visual cues can be used effectively. However, it requires cooperation and training across departments to ensure smooth adoption.

·????????Perpetual Inventory Management: Implementing a perpetual inventory system can be more complex and resource-intensive, involving the integration of advanced technology and substantial data management efforts.

Data Accuracy and Maintenance:

·????????Kanban Par Management: Kanban relies on physical cards or simple digital signals, which may not provide detailed data insights. However, it requires less effort to maintain and is less prone to technological glitches.

·????????Perpetual Inventory Management: Perpetual inventory systems offer more comprehensive data and visibility into stock levels, helping organizations make data-driven decisions. However, ensuring data accuracy and system maintenance are critical for reliable results.

Adaptability and Agility:

·????????Kanban Par Management: Kanban facilitates an agile response to changing needs and demand fluctuations. It is particularly well-suited for healthcare facilities that experience varying patient volumes or emergency situations.

·????????Perpetual Inventory Management: Perpetual inventory systems also offer agility, allowing quick adjustments to stock levels. However, they may require more advanced planning and system adjustments to accommodate rapid changes effectively.

As we know both Kanban Par Management and Perpetual Inventory Management have their merits in healthcare supply chain management. Kanban is best suited for healthcare facilities looking for a simple and intuitive approach to optimize inventory levels and respond swiftly to fluctuations in demand. On the other hand, Perpetual Inventory Management is ideal for organizations seeking comprehensive data insights and real-time tracking to manage a more complex supply chain. The choice between the two depends on the healthcare organization's specific needs, available resources, and technological capabilities. In some cases, a hybrid approach that combines elements of both systems may be the most effective solution for achieving a lean, efficient, and responsive healthcare supply chain.

The views expressed on this LinkedIn post are my own and do not necessarily reflect the views of Oracle.