How to Build a Custom Hospital Inventory Management Software

Published on January 4, 2021

Hospital admissions are at a record high. This results from recent developments like the pandemic and the steady increase of average life expectancy, better access to healthcare, and an aging population. The growth has left the healthcare sector struggling with increasing demands and costs. Medical institutions are finding it harder to optimize workflows, streamline inventory processes, comply with regulations, and secure return on investment.

Now more than ever, an optimized inventory management system is crucial to improving overall efficiency. Read on to learn how to develop custom medical inventory management software or update your current solution to match 2021 expectations.

Why an Inventory Management System is Essential to Your Operations

Nurses spend more time managing inventory for medical supplies. Doctors have to work with administrators buried in long lists of supplies, tools, and equipment. Automated hospital inventory management software spares healthcare providers and administrators the time-consuming spreadsheets and paper trails, allowing them to devote more time to the institution’s bottom line. 

A study by Cardinal Health revealed that around 24% of hospital staff have witnessed or heard about expired equipment being used on a patient. More than half of the respondents recalled a time when a doctor did not have a product that was essential for a procedure. 18% were aware of instances where the patient was harmed because of the lack of supplies. 

Healthcare providers often deal with emergencies, and it’s vital for them to have access to the necessary tools and equipment as soon as they need them. Some supplies have a limited lifespan and need to be routinely cycled out to comply with medical standards. An effective medical inventory management software for healthcare providers helps ensure replacements are procured on time. It can even include parameters for automatic reorders. 

It's vital for healthcare professionals to have access to the necessary tools and equipment when they need them.

The right system helps you deal with high-volume items that require frequent replenishment. It’s especially useful for procuring expensive equipment that needs to be ordered well in advance. 

A hospital inventory management system can use barcodes and asset tags to track inventory, allowing you to monitor medical equipment and supplies from the time of purchase to consumption. It can then send out timely expiry reminders. With the right system, health practitioners will have more resources to provide the best care and avoid costly malpractice suits.

Medical institutions manage numerous tools and machines, with each having specific functions and storage instructions. Without an effective organizing system and check-in and checkout mechanisms, essential equipment can get misplaced, broken, or lost. The right medical supply inventory management lets you trace the usage of assets, paving the way for enhanced security. 

With a reliable supply chain management system in place, you can easily collect data and derive analytics that provides a better understanding of inventory use, maintenance, and waste. You will be better able to forecast demands and make effective decisions.

You may find interesting our guides about developing a custom hospital management system and on-demand healthcare staffing platform.

Benefits of Updating Your Current Medical Inventory Solution

Because of narrowing profit margins, it has become crucial for all aspects of hospital operations to be efficient. Hospital CFOs no longer rely solely on increasing revenues to improve profitability; they are also pursuing cost reduction as an important strategy. 

Hospital systems don’t have the best record when it comes to inventory management. The Cardinal Health Hospital Supply Chain Survey in 2016 revealed that almost 80% of respondents were still doing manual counting of inventory in some areas of their supply chain. Only 17% of the respondents said they were using an automated system for real-time inventory tracking.

But the landscape is changing. More and more healthcare executives are giving the supply chain the attention it merits. A study by Navigant revealed that improved supply chain management could help hospitals cut supply costs by over 17.8%. Technical advancements like machine learning (ML) can augment these savings. 

Healthcare systems have much to gain from adopting cutting-edge systems. However, many are put off by the amount of time and resources building a custom medical equipment management software may require. 

Fortunately, setting up advanced healthcare software products and medical equipment tracking software modernization does not always entail creating from scratch. You can build on your current hospital inventory software by integrating new features in hospital asset management software. Third-party integrations, for one, let you quickly add existing tools and features to your medical inventory management system - no need to spend months developing your own!

Features You Must Have in Your Medical Inventory Management System

Building custom medical equipment management software requires a clear picture of the essential features to fully meet the unique needs of your institution. 

Multi-User Access Across Various Devices

Your hospital inventory software should be accessible on all devices, from laptops and tablets to Androids and iPhones. This way, relevant staff can easily track inventory wherever, whenever. A cloud-based app provides the agility and responsiveness to make this possible. 

Your inventory software should be accessible on all devices, from laptops and tablets to Androids and iPhones.

Your medical supplies management solution should also be accessible to both care and administrative teams. This results in a streamlined process that promotes efficiency. Anyone who needs to check the availability of supplies can make a quick search on their device—no more time-consuming emails, texts, or calls.

Medical Inventory Usage Tracking

Ever encountered problems with missing inventory? With so many employees using various supplies, it can get difficult to keep track. 

Choose medical equipment tracking software that lets you know who checked out certain supplies and what they used them for. This will help you better manage not only your inventory but your employees as well.

Alerts for Dwindling Stocks

Running out of vital healthcare supplies can spell disaster. Functioning as a reorder management system, your inventory tracker must have low stock alerts that automatically send reminders when supplies start to dwindle. This ensures you will be able to replenish stocks as soon as needed. Make sure these alerts can be set to trigger an in-app notification, an email, or both.

Functioning as a reorder management system, your inventory tracker must have low stock alerts.

Real-Time Healthcare Inventory Tracking Across Multiple Locations

Your inventory software should be able to tell you within seconds the types and numbers of supplies you’ve got, where they are located, what they look like, and how to replenish them. This will keep you from wasting time looking for needed supplies. In a hospital setting, this could mean the difference between life and death.

An effective system will also prevent you from over and under ordering supplies. With a few clicks, you can get a clear picture of the items that need replenishment. You can also keep track of the consignment inventory and slow-moving items. It makes purchasing, supply, and vendor management much more efficient.

More importantly, an inventory tracker allows for expiration date management. This will then enable staff to rotate stocks, so older products are used first. You get to avoid throwing away expired supplies.

User-Friendly Interface

When building hospital inventory software, make sure even the least tech-savvy employees can easily use it. You should be able to train your staff in a matter of minutes. A visual and intuitive user interface will do the trick. The system should be designed in such a way that anyone can use it with ease at their first try - no complex manual necessary.

QR Code or Barcode Scanning

Your medical inventory management software should have a built-in scanner that lets you quickly capture codes and inventory information. This will help you reduce labor costs and administrative errors. Your system must be able to work with the products’ existing QR labels and barcodes. It must also allow you to create your own codes. 

An effective inventory tracker lets you easily get more information about an item by scanning it using a mobile device. You should also be able to check out the item, update its details, add notes, and change its location.

Your inventory management software should have a built-in scanner that lets you quickly capture codes and inventory information.

Control Over User Access and Permissions

Security is of paramount importance. Not everything in your system should be accessible to all your employees. Effective medical device tracking software lets you control who can move items, view information, and edit details. While your team should have enough leeway to do their jobs efficiently, scrutiny remains crucial. The software must let you effectively control the medical inventory and audit the usage of supplies and equipment.

Data Export and Import Capabilities

The right inventory management software for hospitals makes your job easier in all aspects. Choose a system that lets you do bulk importing and exporting of data. This way, you can easily prepare audit lists, order sheets, training manuals, and reports to share with staff, investors, and clients. 

Updating Your Current Medical Inventory Management Software

Having the right system to boost your processes does not always entail building from scratch. Sometimes, all it takes is updating an inventory management system for healthcare facilities using cutting-edge technologies and approaches.

Big Data

Hospitals grapple with supply problems. In many instances, it’s an issue of having too much. Wary of running out of essential items, hospital staff tend to err on the side of excess. This results in overstocked inventory and expiring items that negatively impact profitability.

More and more hospitals and health systems are relying on predictive analytics to address the problem. They leverage big data, which refers to extremely large or complex data sets that can’t be adequately handled by traditional data-processing but can be processed computationally to reveal associations, trends, and patterns. The right inventory management software for hospitals lets you forecast demand, so you can have supply levels that are just right.

Powerful data analytics provides specific recommendations on which items to be owned or consigned and which ones to reduce or eliminate. This can then result in cost-saving opportunities amounting to millions of dollars.

Artificial Intelligence (AI)

Before even considering predictive analytics, a medical institution would have to confront the challenge of gathering data first. Radio-frequency identification (RFID), barcode scanners, wearables, and tablets help collect data. And when you have the data, artificial intelligence (AI) can then be applied via machine learning (ML).

ML is capable of processing large amounts of data, revealing insights, and detecting trends that would be too complex for humans to see. It can digest dynamic inputs from procedures and techniques to surgeons and regulations. Equipped with ML, hospital systems will be able to maintain the necessary supplies at the right cost, location, and time.

ML can impact the following areas of supply chain management: 

  • Supply standardization

  • Cost-per-case capture

  • Labor efficiency

  • Inventory level optimization

  • Perioperative and procedural throughput

  • Expired and recalled supply management

Custom Features Integration

Custom integration lets you build a software solution that meets your specific use case. This could involve a simple plugin to connect data from one database to another or a full-blown inventory management system for healthcare.

For instance, you can update your current system by integrating inventory management software with your accounting and back-office systems. Such integration will allow you to optimize inventory to meet your ROI goals, provide accurate financial reports, and offer inventory visibility to supply chain partners.

Read also about telehealth EHR integration.

Third-Party Integrations

There are cases when upgrading inventory management solutions for healthcare providers

is more practical than creating software from scratch. 

Instead of building additional features internally, you can opt for third-party integration. That is, developers can use existing components or add external data to the current system using different application program interfaces (APIs).

To cite an example, a healthcare system may work with supply chain partners to manage their inventory. To make the process efficient, they can integrate their inventory system with their back-office systems, the supplier, and a third-party logistics system (3PL). This way, they are able to keep their supply chain visible, allowing the suppliers to view their fluctuating inventory levels and ensure needed items are available at various locations or the 3PL at the right time.

Custom medical inventory management software lets you prepare audit lists, order sheets, training manuals, and reports to share with staff, investors, and clients.

Factors to Double-Check Before Hiring a Software Development Company

Your choice of a medical inventory management software development company can be the difference between a seamless process and months or even years of frustration. It will also greatly determine the success of your endeavor. Take the time to do your due diligence. Check for the following factors:

Industry Experience

A healthcare institution is vastly different from commercial enterprises like retail businesses and food chains. It’s essential that you choose a software development company with extensive experience in your specific industry. Make sure they list down healthtech as a major offering. This is the only way you can ensure they have a deep understanding of your needs and are able to meet your requirements.

Technical Expertise

Take a look at the people that make up the software outsourcing company’s team and advisors. Do they have the experience and technical skills needed to get the job done? Hiring an inexperienced team can lead to faulty products and drawn-out project durations that inflate costs. When building software, cheap does not always mean low-cost. 

The right team must include experts not only in software development but also in healthcare and hospital systems. A robust experience in project management is also crucial. They must be able to provide an estimate for a minimum viable product or MVP and deliver within a predictable and reasonable timeframe.

The right team for developing medical inventory management software must include experts in engineering hospital systems.


As explained above, the cheapest services may not be your best option. But you should also steer clear of overpriced solutions that might not even meet your needs. Having a clear picture of the features you want will help you find the ideal hospital asset management software development services. 

The right team will be able to deliver an elegant product that functions as required. And they should assist you as your system gains traction.

Security and Quality Assurance

Security and quality assurance are vital in ensuring your inventory management system for healthcare is reliable. Make sure you choose a software development company that prioritizes them. The team should demonstrate just how they incorporate these key components as they create an inventory management system for healthcare facilities.


You may have to work with the team for a significant amount of time, so it’s best to look into the company’s culture. It helps if they share your work ethics and values. In any case, you want a team that’s dedicated to innovation, excellence, and effective communication. These values will help make the process seamless.

Summing Up

The modern times have brought new challenges that are way beyond the capacity of current systems. The only way medical institutions can adapt to the changing times is by fast-tracking their technological advancements. It’s the only way they can continue to meet the needs of their patients, staff, and stakeholders. 

A medical inventory management system is one such technological advancement, which can help streamline processes and improve institutional capacities. Building your medical inventory system starts with gaining a clear understanding of your institution’s specific needs and the solutions or features that can address them. You can then search for a technology partner that can help you turn your vision into reality.

Demigos upholds innovation, collaboration, and security. We work with clients from the research stage and idea generation to product launch, maintenance, and promotion. Our team includes experts not only in software engineering and development but also in project management, hospital systems, and business development.
Contact Demigos to learn more about how we can help you implement a hospital supply management system that will enhance your operations and bottom line.

Ivan Dunskiy
Ivan has been working in the tech industry for more than 10 years as a Quality Assurance Engineer, Mobile Software Developer, and Product Manager. Co-founder of 2 startups.