Accurate par levels are critical to maintaining a balance between minimizing items held on the shelf – unnecessarily tying up capital and increasing chances of expiration – and having the necessary materials available when needed. This is a daunting proposition for most facilities that have between two and three thousand items in stock. Complicating matters further is the changing usage patterns that can happen: doctors changing preferences, facility case volume increasing or decreasing, new doctors being added with different preferences, etc. To help facilities continue to maintain reasonable par levels without having to constantly edit items to make small changes to par levels, we’ve developed our new Par Level Analysis tool.
The critical component to this tool is that it looks at your facility’s actual recent usage of every item in your inventory. We look back at the last three months of activity, identifying all items that have usage in at least four of these twelve weeks, and include them in our analysis. We then calculate your average weekly utilization for each item and based on that value determine what we believe is a reasonable low par level: the minimum amount of each item to keep on hand to satisfy that average weekly usage rate. From the low par we then calculate a recommended high par, as a value relative to your low par. This information is all presented on your customized analysis showing each item, its average weekly usage, your current high and low par, and our recommended high and low par levels.
But we understand that our recommended high and low par levels may not align exactly with how frequently you order, or a more aggressive or conservative approach you take to keeping items on hand. So we also provide the ability for you to customize the values used to calculate high and low par. Click the Make Changes button and you’ll see the customization options. First you’ll change the multiplier used to calculate low par. This is the percentage up or down you want to set your low par level relative to your average weekly usage for each item. For instance, if you use an average of 4 of a given item each week and you want your low par to be 2, set your low par multiplier to -50%. We’ll use this same calculation to revise the low par level for all items on the report (you will see the numbers change on the screen as you make changes to the multiplier). Once you are satisfied with the low par levels, move on to your high par modifications. This is the percentage above your low par level that you want to set high par. Continuing our example above, if your low par for an item is now 2 and you want your high par to be 6, set your high par multiplier to 200%. This will again update all items on your report to reflect this new high par level.
Once you have your par levels where you want them, you can use the Apply All button to have AMShub update all of the items in this list instantly to the new high and low par levels you’ve created. You’ve now instantly optimized par levels for your facility! If you want to use different multipliers for a few groups of item you can customize the settings to get them where you want and select the checkboxes for each item. Click the Actions button and select Apply to update just those items. For single items, click the red Apply checkmark on the right side of the items row to apply the settings for just that item. Similarly, you can use the Reject All button, or Reject per item buttons to ignore the recommendations.
This report is re-run each month, looking for changes in utilization patters that could indicate par level changes are needed. If you’ve customized the default high and low par level recommendation multipliers, make sure you use the Save Par Settings button to keep your changes to be used in our calculations going forward.