PAR: Periodic Automatic Replenishment
Periodic Automatic Replenishment (PAR) is a logistics system that automates the process of inventory replenishment. In PAR, inventory levels are automatically reviewed and replenished at pre-determined intervals based on the average usage or sales rate of a product. The goal of PAR is to ensure that inventory levels remain optimal to meet demand without creating excess inventory or stockouts.
PAR has a number of advantages for logistics and inventory management. For example, it can help to reduce the amount of manual labor required to manage inventory, reduce the risk of stockouts or overstocking, and improve the accuracy of forecasting and demand planning.
However, there are also some disadvantages to using a PAR system. These include:
Lack of flexibility: PAR systems are based on pre-determined intervals, which can be inflexible and may not reflect changes in demand or supply chain disruptions.
Inaccurate forecasting: PAR systems rely on accurate sales or usage data to forecast inventory needs, but inaccurate or incomplete data can lead to over- or under-ordering.
Increased carrying costs: By relying on pre-determined intervals, PAR systems can result in excess inventory, which increases carrying costs such as storage, handling, and insurance.
Increased risk of obsolescence: If demand for a product changes, PAR systems can lead to excess inventory that becomes obsolete or out of date, which can result in lost revenue and increased waste.
Lack of human oversight: PAR systems rely on automated processes, which can be vulnerable to errors or malfunctions. Without human oversight, these errors can go unnoticed and result in inaccurate inventory levels.
PAR in Healthcare
The PAR system is flawed in hospital settings. It requires a lot of labor. Additionally, it is challenging to create a precise model of the hospital's product flow because graphically guessing the counts is inaccurate. Overstocking or outages result from this.
One must either just take things from other units when they are not in stock, which makes it difficult to balance the unit's expenses and predict predictable use patterns. As an alternative, central supply must receive hand requisitions. It takes a lot of time since the physician must request the item, clerks must work together to fulfill the request, and central supply must deliver a single item outside of the designated sweep hours.
A PAR system is not even used in many supply rooms.