American Red Cross’ Inventory Management Practices & Mission

Subject: Company Missions
Pages: 4
Words: 861
Reading time:
3 min

The mission of ARC is “will provide relief to victims of disasters and help people prevent, prepare for and respond to emergencies.” The National Inventory Management System (NIMS) gives the Red Cross the ability to share vast quantities of precious blood resources during shortages or in times of natural disaster. The Red Cross Inventory Management Hub keeps Red Cross national headquarters aware of immediate and long-term blood shortages and supports the daily shipment of necessary blood supplies.

An optimal inventory level for a specific blood product is found as a compromise between the shortage rate and the outdated rate. The delivered blood in hospitals is stored under proper conditions. The FIFO method is adopted for the delivery of blood to required persons. The unused blood is returned to inventory the next day. The adoption of optimum inventory levels for specific blood groups is helpful for reducing the over the dating of rare blood materials. It also helps to reduce the processing and storage cost of the blood at a minimum.

Hospitals categorize surgeries based upon urgency. If the hospital has an inadequate supply of blood, then various surgeries must be canceled or postponed. The elective surgeries are the first to be delayed since they are the least critical. In 2000, 7% of hospitals had to postpone surgeries because of insufficient blood inventories.

The procedure adopted by ARC to control the storage of frozen red blood cells is not adequate. It is facing problems with controlling the storage and quarantine of frozen red blood cells. It has not implemented a system to maintain control of inventory of its rare frozen red blood cells. Adequate procedure to prevent reissue of unsuitable blood products that have been returned, recalled, or market withdrawn is not followed by it. The deviations that resulted in the distribution of unsuitable blood products are not corrected and prevented by it.

The current trends in the supply and demand of blood in the United States present a major problem that needs to be addressed. The growth rate of supply is significantly smaller than the growth in demand. Although the total supply of blood (as an aggregate statistic) exceeds total demand in the US, the disparity between growth rates suggests that major shortage situations are imminent. Understanding the reasons for these growth trends should help identify how to address impending shortages.

The collection of blood is done by scheduled visits to organizations where donors have already signed up to give blood, walk-in donors at the center’s donor facilities; and invited donors (or donor groups) who respond to an emergency call for blood. It is difficult to collect the appropriate amount of blood needed at the time of collection. Since donors are volunteers and are not turned away, blood is collected from all qualified donors who arrive at a site. All stages in the blood collection must be synchronized so that costs are controlled, and the need for blood is met. The availability of blood from volunteer donors is uncertain and donation is a function of a number of factors that cannot be controlled by them.

The transfusion services throughout the nation are characterized by diversity. Each regional blood center has independently evolved its own philosophies and techniques for blood distribution. It is essential that any strategy devised for inventory management be defensible from the point of view of both the regional blood center and each of the wide range of hospital blood banks that it serves This way, the uncertainty of supply faced by the hospital blood banks is reduced, with a resulting improvement in the planning of operations and the utilization of resources.

Outdating of blood is undesirable and the ARC tries hard to avoid it. The uncertainties in supply and demand can result in too much blood that cannot be acceptable. This usually occurs for specific blood types like 0+ blood may be in short supply while type AB+ has excess inventory and is likely to be outdated- There is some opportunity at the time blood is collected, to convert it into derivative products, considering different levels of anticipated product demand and the amount of product inventory on hand. However, outdating still can occur. The ARC needs to collect the quantity and mix of blood products demanded by the hospitals while the local blood banks collect what they can. A FIFO issuing policy is followed for all products unless superseded by a standing order, which has to be fulfilled by relatively fresh units.

The hospital blood bank operates as an inventory location, storing and issuing the appropriate blood units to satisfy transfusion requests. During the course of a day, the blood bank receives a random number of transfusion requests for each blood type, each request for a random number of units. Once a request for a patient is received the appropriate number of units of that type is removed from free inventory and, upon successful cross-matching, they are placed on reserve inventory for this.