Current through all regulations passed and filed through September 16, 2024
(A)
Policy
statement
The university of Toledo medical center
("UTMC") will enter into a supplier-owned inventory (consignment) agreement in
which UTMC will set forth the terms and conditions under which products will be
consigned to the hospital. All consignment agreements must be contracted and
signed off by UTMC's purchasing department.
(B)
Purpose of
policy
To ensure UTMC maximizes its financial
position as effectively as possible, the hospital will consider consignment
options when acquiring medical supplies. This policy sets forth the terms and
conditions under which a supplier will provide consignment inventory of certain
products in the quantities mutually agreed upon for the purpose of minimizing
UTMC's investment in inventory, and to ensure that products are readily
available when required to meet patient needs. UTMC will not accept liability
for products or equipment unless specifically stated and agreed
upon.
(C)
Definitions
Consignment inventory - a product or
group of products provided by a supplier, stored on UTMC property but not paid
for by UTMC until actual use. These products typically have a shelf life and
may represent high dollar values.
Supplier - any representative of a
manufacturer or company who visits UTMC for the purpose of soliciting,
marketing, or distributing products or information regarding use of products,
equipment and/or services.
Zero cost purchase order ("PO") -
written document the supplier will use to ship the initial consignment
inventory quantities to UTMC.
Period automatic replenishment ("PAR")
level - the maximum inventory level of consignment product, mutually agreed
upon, to be held by UTMC and to which the supplier and inventory control
department will insure quantities of stock will never exceed.
Periodic inventory review ("PIR")- the
process of evaluating inventory levels on a regular basis to determine if
correct level of inventory is accurate, if current product is still required,
if new or improved product should be added, or replacement of existing product
near to or past expiration date.
(D)
Procedure/requirements
The following procedures and
requirements apply to consignment inventories:
(1)
Consignment
agreement - requests for consigned products will be initiated by the requesting
department in which the products will be placed. All agreements will be
reviewed, approved and managed by the purchasing department. All agreements
will follow UTMC's contract approval routing process.
(2)
Initial
consignment inventory - all products to be consigned must have a completed and
signed consignment agreement on file in the purchasing department. Supplier
agrees to provide UTMC consignment inventory consisting of specific products as
listed in the consignment agreement. The consignment inventory is placed by the
supplier at no charge to UTMC with the use of a zero cost purchase order.
Shipping or hand delivery instructions will be provided on the purchase order.
The delivery of the consigned products should take place at an agreed upon time
with the inventory control department. Upon receipt and validation of consigned
quantities, inventory control will notify the purchasing contract manager for
item build in enterprise resource planning ("ERP") system.
(3)
Consignment
inventory levels - consignment inventory will be limited to the mutually agreed
upon levels between supplier representatives, the requesting department and
purchasing based on current usage of similar products. The supplier may not use
UTMC as a storage facility for products not represented on the consignment
agreement.
(4)
Ownership and inspection - UTMC recognizes that
consignment inventory is the property of the supplier. As such, it is the
responsibility of the supplier to conduct a periodic inventory review on a
quarterly basis for expiring and outdated products, and to replace any such
products in a timely manner with like-for-like product at the then contracted
price. Under no circumstances will UTMC be responsible to pay for supplier
owned, expired product.
(5)
Periodic inventory review - on a quarterly basis, an
inventory review is to be conducted and documented. The inspection report must
be signed by a supplier representative and a person from UTMC's inventory
control team. With reasonable notice, UTMC agrees to provide supplier's
escorted access to its inventory to conduct inspections of consignment levels,
verify quantities and condition of the inventory. All adjustments to the
inventory are to be documented on the PIR form.
(6)
Modifications to
consignment inventory - any additions, deletions or changes to the consigned
products must be in writing and presented to the purchasing department prior to
modification being made. Substantial changes to products (i.e., changes to
product itself, packaging, pricing, catalog number) will require approval from
purchasing prior to its deletion or addition to the consignment
inventory.
(7)
Pricing- purchasing is responsible for negotiating
pricing for consigned inventories. Pricing must be agreed to in writing prior
to any product being delivered. Pricing should be held firm for a minimum
period of at least one year from the date the agreement is
signed.
(8)
Return of inventory - UTMC can, at any time, return
unused or expired items from consignment inventory to supplier. "Unused" is
defined as any unopened package, regardless of package condition. For sterile
products, "unused" is defined as product whose sterility has not been
compromised.
(9)
Reductions in inventory levels - upon completion of
periodic inventory reviews, if an item has not been utilized in a reasonable
time period, the need for that item to be consigned will be reassessed.
Supplier retains the right to have an item removed from UTMC upon their
discretion after providing UTMC with a thirty day notice.
(10)
Inventory
replacement - upon use of a consigned item, UTMC will issue a purchase order
for the replacement of consumed item. The supplier will bill UTMC for the
replacement item referencing the purchase order number. Failure to submit
invoice with proper PO number will delay payment.
(11)
Product recalls
- supplier shall notify UTMC inventory control and purchasing departments
immediately of any product recall or alert, voluntarily or otherwise. Supplier
agrees to respond timely to any UTMC generated recall, or
alert.
(12)
Term and termination - An agreement shall have an
initial term of one year from the signing date, and may be renewed for
successive one year terms upon the mutual written consent of supplier and UTMC.
An agreement may be terminated, without cause, upon thirty days advance written
notice by either party.
