What is inventory management in a pharmacy? Inventory control in pharmacy
Every pharmacy has a dynamic and vast supply-chain network to manage, irrespective of whether it is an independent shop or a part of a medical facility. The supply costs of the pharmacy are vulnerable to certain influences which contribute to increasing cost and impacts profitability. The projection of stocking inventory also needs to be assessed well. While most pharmaceutical products have a mid-term shelf life, overstocking can still lead to loss of value. Understocking leads to loss of opportunity to sell. Furthermore, a pharmacist may have to address important aspects such as proper storage, expiration dates, etc. It is therefore important for a pharmacist to manage inventory effectively.
What is Pharmacy inventory management: An overview
Pharmacy inventory management is the science and art of managing the inventory of pharmacy effectively whereby the process or system helps the manager/owner reduce cost, improve operational efficiency, and minimize overstocking and opportunity loss. For a person to effectively manage the inventory, he or she should have complete visibility of the current stock, have estimates of the stock on hold, and have future demand projections.
Why pharmacy inventory management is important?
Pharmacy inventory management is fundamentally required to make the system profitable. By enhancing inventory management, we safeguard the system from becoming disorganized, we are able to understand the market trends better, and employ cost-minimizing strategies. Identifying key trends is essential because for a pharmacy the trend is usually local which may not be the same as that of larger geography.
Furthermore, it helps in making accurate projections of what could be the demand for in the times to come. If historical inventory data is recorded and analyzed for a few years, the pharmacy could end up having a sales trend. It can give crucial insights into what will be sold in the future. A robust system of managing inventory helps to maintain accurate shelved stocks and prices.
Pharmacy inventory management methods
Poor inventory management systems fail to timely alert and replenish inventory. Therefore it is important that inventories are managed well. Pharmacy inventory can be managed by various methods, some of which are as follows.
The visual method
In this way of managing a pharmacy inventory, the pharmacist or the designated person takes a visual survey of the inventory and counts in-hand stock against the product list and quantity. A purchasing order is raised when the stock number falls below the desired listed amount.
The periodic method
When pharmacists count the stock and compare it against the product list and quality in regular periods of time. When the need comes, a purchase order is raised by the pharmacist.
The perpetual inventory management method
This method is very commonly followed, as it is one of the more efficient ways of managing the pharmacy. A computer system is employed which helps in monitoring and recording the change in inventory. The inventory records are digitally stored in a computer, which is connected to other systems. Once the stock is entered, any paid order that is processed reduces the amount from the inventory.
The hybrid method
This method includes integrating all three methods. It employs the annual physical count while maintaining a computerized system (perpetual method). With this method, a pharmacist compares the product quantity on shelves against the computer. This method helps in correcting the fluctuations in supply and demand as well as in verifying the accounts of the inventory.
Factors affecting pharmacy inventory management
There are several factors that impact the inventory management process, and they should be considered before finalizing a method to manage the inventory. The factors range from the type of product (generic, brand), the size of inventory, policies such as return or replacement of products, inventory shrinkage, unclaimed prescriptions, and so on. The acquisition cost of generic products is lower than counterpart brands. Mostly, smaller pharmacy has smaller inventory size and exclude complete product lines. The inventory has to account for the product return policy of manufacturers, vendors, and even the pharmacy itself. Inventory shrinkage causes a significant loss in sales, which should be accounted for. Employee theft or mishandling of medicine stocks contribute to shrinkage and hence it should be checked against through various security measures. Therefore, pharmacies whether big or small should adopt a strong pharmacy inventory management system.
Technology shaping pharmacy inventory management
The advance digital technologies are helping make inventory management more secure, cost-effective, and efficient. Many pharmacies today are employing a pharmacy inventory management system, which is a digital technology solution that helps a pharmacy owner manage the inventory and operations in a cost-effective way.
Available in the software-as-a-service format, pharmacy inventory management today is AI-driven and is backed by cloud technologies, making it a highly scalable and agile solution with exceptional features, data analytical capabilities, and so on. Today, as the world of pharmaceutical medicine is getting increasingly diverse and complex, with new medicines hitting the markets, every pharmacy needs an inventory management system to plug leakages, wastage, and loss of products or sale opportunities.
Then there are other technologies such as certain scanning devices which strengthen the periodic inventory control methods by scanning barcode labels on packages and shelves. The system helps in facilitating the electronic purchase of orders at a household level and e-procurement at a larger scale.
An effective pharmacy management software is crucial to make inventory efficient and plug the losses from mismanagement or accidents. It is advisable that pharmacy owners and pharmacists leverage the benefits of new-age technologies in providing them with a digital solution that is suited to their enterprise. The more agile and multifaceted the solution would be the better support it would be offering to the owners or managers of pharmacies.