CAREFUL INVENTORY MANAGEMENT TO INCREASE THE PROFITABILITY OF A PHARMACY

Inventory is usually a pharmacy’s largest asset, therefore, how much inventory to keep in hand is one of the key decisions in a retail pharmacy. Once inventory levels are established, they become a vital input to the financial aspect of the pharmacy business, as they drive cash flow and profitability.

Experts say that most of the times too much inventory translates in to too little cash and, often times, to less profitability. However, little inventory too means little sales as in that case patients go to another pharmacy to fill their prescriptions. So, as a pharmacy owner, there are a variety of facets to consider when managing your inventory, and certain best practices can drastically improve your bottom line.

The inventory management comprises a large portion of the pharmacy technician’s responsibilities to ensure that there is an adequate stock of medications and supplies to cater the requirements of each and every patient.

 

Why Inventory Management Is Essential?

Ensuring the adequate stock of medications is one of the main reasons of inventory management in retail pharmacies, but there are many other reasons as well that include:

·         Minimizing the occurrence of unexpected out-of-stocks to decrease the impact on patient care.

·         Decreasing the carrying cost of maintaining an inventory.

·         Lowering costs of ordering medications from wholesalers.

·         Ensuring minimal time is spent ordering medications and purchasing tasks.

·         Preventing costs associated with damage and expiration of inventory.

·    Decreasing total costs to the pharmacy and overall health care organization by focusing on purchasing products with the lowest cost

There are two main goals to keep in mind when managing an inventory for a pharmacy. The first is to ensure that medications are available when patients need them. The products that are regularly kept in stock are based on the needs of the pharmacy and its customers. While some rarely used, extremely expensive or cumbersome products may be ordered in as needed, efforts should be made to keep the medications used regularly in stock and available for use – not outdated or damaged.

The second goal of retail inventory management is to keep medication costs at a minimum. Many pharmacies have preferred wholesalers to order from or contract pricing with specific drug companies to decrease the cost of purchasing medications. The pharmacy technician should make an effort to use preferred delivery systems to try to keep acquisition costs as low as reasonably possible. Preventing profit loss is also a contributing factor to controlling medication costs. Properly managing stock by using medications before they expire and processing returns regularly can help keep medication costs down.

How Inventories Are Managed In Modern Days?

Computer systems are used nowadays in retail and LTC pharmacies to assist with the maintenance of inventory as well as processing prescription orders and maintaining patient files. Wholesalers often have computer programs that allow pharmacies to access information in the wholesaler’s computer system.

Most pharmacies use a computerized perpetual inventory system to maintain the stock of medications in the pharmacy, in which the quantity of a particular medication gets recorded as prescriptions are filled. After each prescription is filled and dispensed to the patient, the amount of medication used for the prescription is removed from the inventory to ensure the quantity on hand in the computer is always current.

There are several other tools used in the management of a perpetual inventory system. The inventory is generally managed through a computerized inventory management pharmacy system. The computer system is designed to automatically update on-hand quantities as prescriptions are filled and generate automated and manual reports to allow pharmacy staff to analyze and monitor the inventory.

In general, the computer system can often track turnover rates, predict future drug needs, notify pharmacy staff when possible errors are detected, and even order more medication based on set reorder points.

So, if you are looking to invest in an inventory management software then plan it properly and take a judicious decision while buying any POS software for pharmacy.