Operations guide

Consignment and trunk stock: controlling inventory you do not own

In the operating room, much of the high value supply does not belong to the hospital until the moment it is used. That model solves the capital problem but shifts the control problem. This guide explains how it works, why control breaks down and what it takes to fix it.

Updated August 2026 · 9 min read

What consignment inventory is

Under consignment, the supplier places stock physically inside the hospital but retains ownership. The hospital has not bought it: it has it available. The sale happens only at the moment the item is used on a patient, and the supplier invoices against that consumption.

The model exists because operating room supplies are expensive, come in many variants and cannot be predicted precisely. An angioplasty may require any stent diameter and any length. Buying the full assortment in advance would tie up capital no hospital wants to tie up.

The result is inventory that sits in the hospital, is used by the clinical team, is replenished by the supplier and appears in neither party's books with sufficient precision.

Trunk stock and loaners: the other forms of inventory you do not own

Trunk stock is the stock a supplier representative carries and brings to the procedure. The name comes from its usual location: the boot of the car. It is not in the warehouse, it is not in the system and it shows up in the OR on the day of surgery.

A loaner is the instrument set delivered for one specific case and returned afterwards. It is common in orthopaedics, where a single surgery may require several trays of sizes that go back to the supplier almost complete.

Consignment: supplier stock, stored in the hospital, permanently available
Trunk stock: supplier stock, carried by the representative, present only during the case
Loaner: instruments or sets delivered for one procedure and returned afterwards
Direct purchase: hospital stock, bought in advance

The first three share the same blind spot: the hospital uses a product that is not in its inventory, and the supplier cannot see what happens to a product that is still theirs.

Why control breaks down

The loss of control does not come from bad faith, it comes from the moment of recording. The item is opened in the middle of a procedure, when the team's priority is the patient. The record is made later, on paper, from memory or on a spreadsheet someone fills in at the end of the shift.

From there, every party builds its own version of the truth. The hospital records what it believes it used. The representative counts what they find on their visit. The supplier system reflects what was invoiced. The three figures rarely match.

Consumption is recorded late and incompletely
Counting depends on the representative's visit, which happens every few weeks
Nobody watches expiry dates, because the stock belongs to nobody until it is used
Discrepancies surface at reconciliation, once they can no longer be reconstructed
Replenishment is triggered by perception rather than by real consumption

What it costs each party

For the hospital, the cost is operational and clinical before it is financial. An item believed to be available and missing forces a change of technique or a cancellation. Consumption recorded badly is billed badly or not at all. And the space consignment stock occupies is operating room space.

For the supplier, the cost is direct. Every consigned unit is capital immobilised where it cannot be seen. Every expired unit is a full loss, not a discount. And every hour a representative spends counting boxes is an hour not spent selling.

How to bring it under control

The principle is simple and hard to implement: consumption must be recorded at the point of use, at the moment of use, without adding a task for the clinical team.

Once recording is automatic, everything else falls into place. Replenishment stops being estimated and starts being triggered by consumption. Reconciliation stops being archaeology and becomes a query. And expiry is anticipated, because the system knows which lot is there and when it lapses.

Identify by unit, not by reference: lot, serial and expiry for every piece
Capture the withdrawal at the point of use, with the cabinet or the reader, not with a form
Give shared visibility: the supplier should see their own stock without having to come and count it
Trigger replenishment from real consumption rather than from the visit schedule
Close the loop with the ERP: the same event that depletes stock generates the billing evidence

Metrics worth tracking

A well run consignment programme is recognisable by a handful of numbers. If they are not being measured, control is most likely still declarative.

Inventory accuracy: the gap between what the system says and what a count finds
Days of consignment inventory by service and by supplier
Expired units and their value, separated from damage write offs
Time between consumption and invoicing
Turnover by reference, to surface stock that is never used

Frequently asked questions

Who owns consignment inventory?

The supplier, until the moment of consumption. The hospital holds and uses it, but ownership transfers only when the item is applied to a patient, which is also the moment the payment obligation arises.

Who absorbs the loss when a product expires?

In most contracts the supplier, because the product was still theirs. That makes expiry control a direct supplier interest and not only a hospital one, and it is the easiest argument for shared visibility.

What is the difference between consignment and trunk stock?

Location and permanence. Consignment is stored in the hospital on a stable basis. Trunk stock travels with the representative and is only present during the procedure, which makes it harder to record and easier to lose.

How is consignment consumption invoiced?

Against use. The supplier issues the invoice from the hospital consumption report, so the quality of that invoice depends entirely on the quality of the record. Badly captured consumption becomes a commercial dispute weeks later.

Can it be controlled without the supplier entering the operating room?

Yes, and that is precisely the goal. Once withdrawals are recorded automatically, the supplier reaches the state of their stock remotely and the visit is reserved for what genuinely needs presence, instead of being spent on counting.