Optimizing drug availability and reducing wastage through ABC-XYZ inventory management: Insights from a public tertiary cancer hospital in Northern India

Abstract: OBJECTIVES: This study assesses the ABC-XYZ analysis technique in reducing stockouts and maximizing the management of high-cost medications to improve accessibility and minimize expiry. METHODS: It is a retrospective analysis of records from a tertiary cancer hospital in northern India. The ABC-XYZ analysis technique was applied to 286 medications, which is approximately 90% of the yearly drug expenditure. A 6-month pilot intervention from March to August 2024 was carried out. Procurement strategies such as scheduled orders for stable, high-cost medications, and consumption-based forecasting for volatile medications were implemented based on the ABC-XYZ classification. Outcomes, including stock-out frequency and wastage costs, were compared before the intervention (September 2023 to February 2024) and after the intervention (September 2024 to February 2025). RESULTS: An ABC analysis of 286 medications showed that 10.1% (29) were in Category A, consuming 70% of the total annual cost, thus emphasizing the need for strict and controlled monitoring of these. XYZ analysis categorized 286 medications grouping 22.7% (65) as X (stable), 39.2% (112) as Y (moderately stable), and 37.8% (108) as Z (unpredictable). A 6-month pilot intervention from March to August 2024 was conducted. As a result, the average monthly stock-out frequency decreased by 88.5%, which was statistically significant ( P < 0.001). In addition, monthly wastage costs reduced by 76.5%, showing a strong clinical trend though not statistically significant. CONCLUSIONS: The ABC-XYZ integration is an effective, evidence-based tool for optimizing drug inventory in a resource-constrained cancer hospital, drastically improving availability and reducing wastage.