Drive Pharmacy Revenue With Inventory Manager

Five Critical Data Points for Intelligent Pharmacy Inventory

A recent SureCost webinar described how pharmacies can “listen” to their inventory. This means managing inventory so that it delivers data that guides key decisions on a daily basis, helps pharmacies make the right purchases at the right time and shapes overall business strategy.

These capabilities hinge on inventory’s ability to easily track and furnish accurate data in real time. To that end, here are five essential “answers” a successful pharmacy’s inventory management system should provide.

Inventory is more than what is physically on-hand. It’s important to calculate knowing which products have been ordered, if any items need to be returned, whether any items are nearing their expiration date and other information that’s not literally in front of pharmacy staff’s eyes. Otherwise, pharmacies may order unnecessary products or fail to replenish on time, which often leads to costly, stressful last-minute reorders.

Even if “inventory” only consisted of what is on a pharmacy’s shelves, it can be difficult to be certain how much of every item is there at any time. Pharmacy staff are more overworked than ever. Updating stock counts with every dispense throughout the day is a job in itself. That’s on top of counseling patients, administering vaccines, making purchases and fulfilling other responsibilities.

Pharmacies will always want to conduct physical counts, but an integrated inventory management system optimizes physical inventory. It allows pharmacies to manage, evaluate and summarize inventory on their own terms, in-house. The best inventory manager solutions allow a granular level of data, for example, counting by unit or package with “snapshots” at the corporate, regional or departmental levels or by location.

Because pharmacy inventory is not a static resource, pharmacies can’t rely solely on physical inventory. Yesterday’s count may not reflect today’s stock, so last month’s inventory is almost certainly inaccurate! When pharmacies rely on static inventory data and try to keep it manually updated, they risk failing to realize:

Instead of only seeing snapshots, pharmacies also need a perpetual inventory system: a dynamic, regularly updated count that shows accurate usage in real time.

A data-driven inventory management system should work with flexible reporting capabilities, a wide range of reports and dashboards (e.g., excess inventory, purchased not dispensed) and convenient tools. This will ensure pharmacies can make better decisions with improved data without losing time configuring queries or searching for information.

Once pharmacies can track accurate, regularly updated usage with sophisticated data, they can make better purchasing and replenishment decisions in real time. If they notice trends and usage spikes at regular intervals, they may use automation to support their product strategy. For example, with their inventory and purchasing management in a single solution, a pharmacy may automatically set min/max values based on usage and days-supply requirements. They can then program the solution to automatically reorder a product based on different replenishment methods (i.e., days-of, on-demand, just-in-time). This frees them up from micromanaging predictable product patterns and gives them business intelligence to guide other decisions.

Any pharmacy professional knows that their inventory is not just a collection of identical, interchangeable items. There are staple items every pharmacy always needs in stock based on market demand and their individual patients’ needs. There are also high-impact items: inventory that makes a disproportionate impact (relative to other items) on a pharmacy’s margins, purchasing strategy or other areas of patient service or business.

These two variables may correlate differently (e.g., generics with a low price that sell in high volumes based on SKU).

For many pharmacies, shrinkage (the loss of inventory due to theft, damage or administrative errors) isn’t a consideration. Even so, pharmacies are subject to numerous regulations as well as ethical responsibilities for these prescription drug products and their chain of custody.

With these requirements, and given the value of these products outside of authorized vendors, pharmacies need a way to evaluate potential inventory shrinkage—even if it ultimately leads to showing there is none. They may rely on blind spot checks, but the surest way to spot shrinkage and demonstrate due diligence is by reviewing utilization data.

Obviously, pharmacies must be mindful of a product’s expiration date. They can’t dispense expired products, meaning an expired product is also a financial loss. But excess inventory also means lost dollars. Stock that just sits on shelves is another cost expenditure that the pharmacy is not making back. It may sound odd, but every item on a pharmacy’s shelves has a history and a future. Pharmacies need an inventory manager solution that records the item’s “past” while empowering them to effectively decide where it belongs.

By identifying excess stock, stale drugs, slow-moving items, products about to expire and other categories early and regularly, pharmacies stop losing money on spoilage and excess. Instead, they may be able to return items to the manufacturer or transfer them to other locations. That’s because an integrated inventory management and purchasing solution tracks a product’s entire life cycle.

This level of transparency allows pharmacies to harness their existing inventory to its full potential. Inventory becomes a resource to manage and leverage (instead of remaining a static number or task that gets attention as time permits).

The right technology integrates inventory and purchasing data and streamlines these functions. For example, it may be as simple as running a report for excess or items that are “purchased-not-dispensed.” These management systems don’t eliminate the need for physical inventories but enhance them so you have this information available at any point.

Smarter Pharmacy Inventory Means Enhanced Patient Service and Better Business Sense

Inventory management is a pharmacy’s method for understanding the life cycle and value of their products: the items their patients rely on for health and their business depends on to stay solvent. Inventory management affects whether patients can get the medications they need and the effectiveness of that pharmacy’s purchases.

By optimizing how they manage inventory, pharmacies:

While data-driven inventory management can be a powerful resource, too many pharmacies are left using manual processes, outdated technology or “repurposed” solutions that aren’t designed to handle pharmacy inventory. These cumbersome approaches are tedious, time-consuming and inaccurate. Along with the right approach to inventory management, pharmacies should find the right solution to implement that approach.