How to Leverage Software to Create a Winning Inventory Control Strategy

SoftwareAs providers strive to find efficiencies anyway they can, there are three key areas where they devote the lion’s share of their money: salaries and benefits, accounts receivable and inventory. Often, inventory can represent the largest amount of capital, or at least tie with human resources costs for top expense.

However, while providers can’t easily make HR cuts, there are ways that inventory can undergo belt-tightening. With money sitting in the warehouse, the showroom and in the backs of delivery trucks, a provider is well advised to ensure that inventory either moves quickly, or is reduced, lest that money sit idle.

To control inventory, a provider must strike balance between ensuring that money is not being tied up in DME that is not moving, versus ensuring that the right types and amounts of in-demand DME stay on the shelves.

Fortunately, HME software and related technologies can help can help accomplish that balancing act. By using software designed for the homecare industry, the system will be better geared to mesh its inventory control tools with the other aspects of the HME management system, such as billing and point of sales system. This way, all systems are updating the inventory as it is used and moved through the system.

Coding is Key

As a provider implements a software system to help manage its inventory, an important initial consideration is to decide how the products will be coded. This can actually take some time, as various types of medical equipment have different tracking requirements.

For instance, how a provider decides to organize and code is oxygen supplies or rental equipment, will differ greatly from how it codes the more standalone types of DME, such as walkers or beds. Moreover, many providers often will want to incorporate vendor serial or product numbers (or even names) into their coding systems, as another form of reference, as well.

A good method for grouping and coding DME is to start with broad categories and narrowing down to more specific products. This approach makes the inventory management system easier to navigate and maintain.


Once medical equipment is grouped and coded, providers can move onto barcoding their inventory. Barcoding is essentially for maximizing the efficiency gains and reduced overhead they seek to gain through software. Barcoding helps ensure inventory is correctly recorded and also allows management to monitor inventory in real-time, or nearly real time, depending on whether or not the handheld devices are wireless or must be connected to the system and synchronized.

Using handheld scanners, staff can identify equipment and log it as it is received and moves through the system. That way, the DME can be tracked wherever it is in the provider’s operation, which is often critical to accreditation requirements.

And with the inventory control system integrated with other aspects of the business, now barcoding affords even greater oversight. For instance, if the point of sales system is connected to inventory control, then inventory is updated every time a sale is made.

Barcoding along with inventory control systems can have an additional benefit each year when providers must take static accountings of their inventory, such as at tax time. A process that could at one time take several days and rack up overtime costs, can now be taken care of in a fraction of the time. And, of course, the accuracy ensures everyone in management feels confident that the records provided to Uncle Sam are free of human error or guesstimation.

Automatic Purchasing

Another key efficiency gained through inventory control technologies is automatic purchasing. Many inventory control systems can monitor user-defined thresholds for various supplies and automatically reorder them when they get low. So, for instance, if key diabetic supplies reach a certain level, the system can automatically place an order with the vendor.

Some automatic purchasing tools even log recent purchases so that the provider can review them to find the best unit or shipping price, or the least amount of leadtime or shipping time needed. Often the costs associated with making the order, such as shipping or lag time can cost nearly as much as the DME itself.

Ultimately, the key to leveraging the advances available in inventory control comes down to just one phrase: Just do it. The amount of unnecessary overhead sitting in the warehouse can be staggering, and trying to identify it through a manual inventory accounting is nearly impossible.

Points to take away:

  • Inventory represents a key segment of HME overhead that must be addressed if providers are to remain financially agile.
  • In this respect, an HME software system that incorporates inventory control tools is essential to cutting costs.
  • In preparing to automate inventory control, providers should spend some quality time on how they plan to code their inventory.
  • Barcoding and handheld devices are critical in managing inventory in that they reduce human error and ensure accurate oversight.
  • Automated reordering features are also helpful in ensuring that the provider doesn’t run out of in-demand supplies.

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This article originally appeared in the July 2010 issue of HME Business.

About the Author

David Kopf is the Publisher HME Business, DME Pharmacy and Mobility Management magazines. He was Executive Editor of HME Business and DME Pharmacy from 2008 to 2023. Follow him on LinkedIn at and on Twitter at @postacutenews.

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