Pharmacy inventory management is a critical component of the healthcare industry. From medicine manufacturing to delivery, the entire supply chain is handled by the industry’s top stakeholders. It is a brainer that efficient pharmacy inventory management allows pharmacists to keep track of expenses, sale trends, storage space, and timely deliveries.
However, the supply chain can be faced with many challenges. In a recent report by McKinsey, around 25 percent of the respondents felt that there’s still a lack of visibility in the supply chain. So, what can be done to make inventory and supply chain management better?
Well, for starters, implementing a robust pharmacy inventory management system in the pharmaceutical industries, pharmacies, and hospitals can facilitate better inventory management. A pharmacy inventory management system has everything from handling e-prescriptions to offering a centralized database.
This article will highlight the importance, essential features, and methods of pharmacy inventory management systems.
Methods of Pharmacy Inventory Management
How pharmacy inventory is managed and controlled depends on location, type of pharmacy, business, and more. But what really matters is how to manage pharmacy inventory. Here are the top methods to go about doing it:
1. Perpetual Method
The perpetual inventory method continuously updates the available quantity of medications after prescriptions are filed. After every prescription is dispensed, the amount of medicines is deducted from the inventory, so the quantity on hand is always on par with what’s available. Federal law requires the use of perpetual method for schedule II controlled substances.
2. Periodic Method
With the periodic method, pharmacies count the inventory at the end of certain period to check what’s left and what’s the cost of the medicines sold. It can be done monthly, quarterly, or annually, depending on the stock. With an inventory management system, pharmacies can import stock details into the software, get physician reviews of medicines, and then import the data back into the system to reconcile.
3. Visual Method
The visual inventory method is where pharmacist conduct photo-based verification of the products on hand along with a listing amount of the medicines that must be carried. The pharmacist places an order when the number falls below the required. The visual method helps to identify items with greater speed and accuracy.
4. Just-in-Time (JIT)
JIT is an inventory strategy in which products are ordered and received only as needed and not before. This process minimizes tying up funds for a long time and helps to curb the expiry of items before they’re sold. Just-in-time method prevents out-of-stock and overstock scenarios. This system is best suited when supplies are readily available and patient needs can be easily predicted.
Importance of Pharmacy Inventory Management System
Accurate inventory management is the key to running a successful pharmacy business. Here are the top reasons why every pharmacist needs an inventory management system:
1. Keep Track of Stocks
Pharmacy inventory management system helps pharma stores to keep track of their stocks in real-time. For example, the system tells the pharmacists the location of the medicine, sale percentage, demand, and so on.
The inventory management system eliminates the need to keep a spreadsheet, instead, it automatically prepares one, and pharmacist simply has to update it. This eliminates human errors, which can potentially result in financial losses. Furthermore, syncing the pharmacy inventory management system with EPOS can automatically update inventory levels as medicines leave the shelves.
2. E-prescription Tracking
Integration of e-prescribing software with inventory management allows pharmacists to automatically check the availability of medications and order them from the manufacturer if out-of-stock.
E-prescriptions are a great way to know which medications are in demand and track sales trends. For instance, the sale of flu medicines may be higher during the winter season, so pharmacies can stock up beforehand.
3. Detect and Reduce Expired Items
A large stock of expired items affects sales, increases liability, and takes up space. So, an inventory management system can automatically send alerts or flag expired products to the pharmacist. Once detected they can start removing them.
Just-in-time may be one of the recommended methods to prevent overstocking of drugs, thus minimizing expired items.
4. Identify and Flag High-Risk Drugs
Detecting high-risk medications is one of the essential functions of a pharmacy inventory management system. It is not advisable to keep large stocks of high-risk drugs that are costly, low in demand, and have a short lifespan. Instead, use the inventory management system to monitor such medicines and refill them in small quantities.
5. Keep Pace with Sales Trends
In which season was the medication sale the highest? Which drug was most in demand in the last couple of years? How are finances going? Data reporting and analytical tools of pharmacy inventory management are a great asset in understanding these sales trends.
Based on historical reports, pharmacists can restock drugs for the upcoming flu season, or a possible epidemic.
Features of Pharmacy Inventory Management Software
1. Automated Alerts
Automated alerts are set by the pharmacists to send SMS to patients when their medicines run out, so they can request a refill without having to go to a physician for another prescription. Alerts also remind pharmacists to restock, check on the costs, and remove expired items.
2. E-prescriptions
When the e-prescriptions come in from the healthcare provider, pharmacists can easily check for medication availability via the pharmacy inventory management system. If the medicine is unavailable then it can be restocked before the patient arrives to collect the order. E-prescriptions also help pharmacists to track demand and sale, based on which drugs can be stocked up if they feel there’s a rise in demand.
3. Centralized Database and Backup
A central repository or a healthcare data warehouse, organizes patient information, so it is easy to retrieve it when needed. Additionally, the inventory management schedules automated data backup to avert sudden data losses. Additionally, with a centralized database, data can be easily stored, collected, and secured to preserve data integrity.
Information can be accessed from multiple devices, thus allowing pharmacies to update, check, and keep record relevance and validity at all times. It is also a way to get real-time updates when there’s a purchase, shipment, or payment.
4. Stock Replenishment
Stock replenishment ensures that the correct inventory is available for sale at the right time. It ascertains that medications flow through the supply chain efficiently. For drug manufacturers, a well-planned stock strategy equates to preventing costly delays in manufacturing, reordering of items with a substantial lead time, and ensuring a cost-effective inventory level.
5. Data Reporting and Analytics
Data reporting and analytics play a crucial role in pharmacy inventory management systems. It helps to generate data-driven reports about drug inventory such as sales, ROI, demand, debts, revenue, etc. It also gives a complete picture of marketing insights, future sale patterns, and budgeting roadmaps. Pharmacists can easily track re-orders, expired items, product categories, and more on the inventory management system.
6. Compliance
Data privacy and security is a number one priority when it comes to healthcare systems. So, in order to maintain it, implement HIPAA compliance standards, FHIR, and even HITRUST. These standards and regulations help to protect data from unwanted data breaches and ransomware attacks. It ensures smooth handling of pharmacy businesses.
7. Medication Re-Order
So, the key here is to strike a balance between supply levels and stock re-ordering. Pharmacists can start by setting a clear picture on how medications are sold – those in low or high demand will be out of stock soon. Based on this speculation, pharmacies can consider when to re-order medications. Order minimum stock level first, then go on building. Also, create a time space to place new orders.
8. Detect Expired Items
One of the critical challenges faced by pharmacies is to keep track of expired items. With expiry control feature, pharmacies no longer have to shoulder huge losses from expired medical products and medicines. This feature can monitor expiry dates and aid pharmacists to sell products based on first-in and first-out strategy.
9. Billing and Pricing
Everything takes a backseat when it comes to money. Pharmacy inventory management system has a feature to handle billing and pricing of medical products. Pharmacies can set up digital payment options, along with automated invoice for smooth billing processes.
10. Customer Support
Integrate a customer management system (CMS) with pharmacy inventory management system to elevate customer satisfaction and experience. This feature can manage user responses, feedback, and answer queries. Pharmacies can further enhance customer support with chatbots as it offers 24/7 customer services.
Looking to implement a robust pharmacy inventory management system? Just connect with Arkenea, a healthcare software development company, known to create HIPAA compliant software that suits the needs of the client. We’ve got you covered.