Pharmaceutical Inventory Problems and Solutions

Inventory is the biggest asset of a pharmacy. How you handle inventory decides whether you maximize revenue or yield losses. Before the pandemic, there are already challenges in pharmacy management, and when the virus spread, even the uncommon problems now add up and became frequent. One of these challenges is shrinkage

Shrinkage

Because of the strong demand for pandemic-related commodities and the limited supply, most pharmacies may have attempted to buy in bulk. If this is the case, inventory managers must strengthen their monitoring of those items because people may act inappropriately in pandemic scenarios, resulting in shrinkage. What’s worse, unrecorded losses are frequently detected only during routine audits or, even worse, after the item has already been declared as out of stock (when it shouldn’t have been).

Shrinkage concerns can now be resolved with the help of modern technology. Pharmacy inventory management systems keep track of everything from purchase through repackaging, storage, and putting items on shelves for sale. Every product movement is recorded, including who last touched it, when it happened, and where it was located. Aside from that, it provides centralized data management, allowing you to check if inventory is still at its optimal level and that you can alert the distributor quickly if it isn’t. Shrinkages and shortages are less likely to occur when everything is accounted for in a system like this.

Other Challenges and Solutions

Although the pandemic has been with us for a few years now, it will eventually be gone due to ongoing vaccine and pharmaceutical development. But even if the pandemic ends, there are other challenges that already exist so we continue to search for the best solution.

Problems and solutions in the pharmaceutical industry vary based on location, demand, and budget. Hospital pharmacies, for example, are funded by the hospital so they have a close list of drugs to keep track of and determine what has to be purchased.  On the other hand, retail pharmacies serve almost everyone who needs medication. They usually have everything that the vast majority of people require. They maintain an open list to meet whatever demand arises.

To achieve streamlined inventory management, you must first address the following questions:

Every question above has answers that fall onto areas supposedly covered by inventory visibility and control. If some of the questions are not answered, problems might pile up in the long run.  

If you can confidently answer all of the above questions, you’re probably doing well with your inventory. If you’re having trouble doing so, you may need to review your inventory management system and protocols.

Pharmacy Inventory Management Solution

Most pharmacies these days rely on a rudimentary system that solves only the basics and often missed other inventory challenges. 

The following are some of the most typical challenges inventory technicians face on a daily basis, as well as the answers provided by inventory management solutions:

Inaccessibility to the operations

Thousands of medications and multiple locations (shelves, drawers, cabinets, etc.) must be managed in a pharmacy. It’s easy when you have a bird’s eye view of the entire process in this situation. Today’s technology allows everyone to view the status of each location, whether to evaluate the need for replenishment or to just do some routine auditing.

Tracking movements and inventory levels

Inventory power levels are the thresholds set by a pharmacy that the minimum quantity that should be available at any time for a drug item to be dispensed.  When an item falls below the threshold, your system will alert the manager, prompting them to place an immediate order for replenishment.

This seems like a basic principle, but with a manual inventory system, having a faultless system like this involves significant time investment. However, with automated inventory management systems, you can easily keep track of everything you take out and even the items that are moved from one location to another.

Update pricing and put proper costing information

When updating pricing manually in an excel sheet is very time-consuming and prone to human error. Inventory management solutions offer search fields where you can search for the specific drugs and update not only the pricing but also other product information. This boosts tracking revenue to expense variance by properly getting expense data.

Manually adjusting pricing on an excel sheet takes a long time and is prone to human mistakes. Inventory management software has search fields where you may look up certain drugs and adjust pricing as well as other product details. Properly recording expense data improves revenue to expense variance tracking.

Expiration dates

Expired items lead to huge capital losses.  The common strategy is to rotate stock on the shelves. The sooner the product expiration dates should be rotated to the front and the later the expiry date should be put to the rear. 

Even though it’s a straightforward procedure, human error can cause it to fail. Most inventory management software has a function that allows you to adjust each product’s expiration date and receive a signal when that date approaches. This way, you’ll know which things to distribute first.

Everything is manual

It’s great when a pharmacy distributor provides an inventory system as a reward for purchasing from them, but other distributors do not, and pharmacies must figure out how to manage their inventory as efficiently as possible on their own. Many pharmacy managers spend weeks or even months experimenting with inventory solutions to see if they can help them with even the most basic issues. Worse, they have to manage manually while waiting for the optimal solution, which means they end up roaming around, manually counting items, and checking their status.

Even simple tasks like moving items from one location to another sometimes require a long process just to keep track of every change made. But with automated inventory management solutions, you may effortlessly drag and drop things between places, use barcode scanners to search for items and locations, and update quantity and pricing information.  You won’t have to worry about losing track of every item because everything is recorded, including who moved them, when they were moved, and where they went.

Conclusion

Each pharmacy is unique. They are comparable only because of the common processes they use to optimize management. What keeps the business running is knowing what your minimum/maximum order is, what the suggested order is, what you actually ordered, what you have on hand, what to place on the shelf, and how much they cost. It is critical that all these are answered based on accurate data. 

The ideal inventory visibility doesn’t stop with knowing what and how much inventory you have. It should extend to knowing where everything is located at any given moment.

Inventory control guarantees that the proper amount of inventory is on hand. The most significant features are demand planning and shrinkage minimization. To make the best business decisions possible, inventory control requires reliable data all of the time.

The bottom line is that whatever the issue is, it usually boils down to visibility and control challenges, so if you’re having trouble optimizing your stocks and demand planning, you might want to dig a little deeper into these two critical areas and see if your current inventory practices or solutions address these two important aspects of inventory management.

Published by Claude.Rivera

I have a passion for new things. It excites and challenges me. Reading and writing take me to different worlds. Literally, escape. I'm a dancer wannabe and a not-so-pro gamer.

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