There are many pharmacies of varying sizes throughout the United States competing for the pharmacy spend. With constant and growing competition, many independent pharmacies struggle. Besides being in a competitive field, many factors influence and drive independent pharmacies’ success, many of which tie back to pharmacy inventory management.
Avoid These Common Pitfalls for For Successful Pharmacy Inventory Management
These four significant pitfalls hinder the successful management of pharmacy inventory. If your pharmacy has fallen victim to one, several, or all of these pitfalls, Datarithm® can help.
Pitfall 1: Lack of technology
Some pharmacies may be hesitant to deploy new, updated technology solutions because they fear change, worry about the financial commitment, and question the level of complication and impact the technology could have on current workflows. That said, change itself is a constant, and technological advancement is a cornerstone to staying with or advancing competitors. Technology is proven to streamline pharmacy tasks and deliver financial and operating efficiencies.
Of the various ways pharmacy inventory is managed, perpetual inventory management provides the most profound and comprehensive benefits. Perpetual inventory provides constant on-hand accuracy, precise financial reporting, ease and speed of ordering, more appropriate inventory levels, and stronger fill rates. While perpetual inventory management has long been available through the various pharmacy management systems (PMS), ultimately, managing the required replenishment points across any formulary relies on pharmacy staff and not the pharmacy system. That is where the root of the problem lies; it’s an impossible job without proper technology to adjust reorder points based on ever-changing demand and supply.
The Datarithm® Solution
Datarithm’s® cloud-based software interfaces seamlessly with major PMS’s, thus providing a technological substitute for managing replenishment points. Every month forecasted demand is then paired with customizable, flexible system settings to determine optimal reorder points for each item/group for automatic upload to your PMS via a bi-directional interface. There is no need to upgrade or alter your current PMS. Datarithm’s® system is simple, fast, easy to use, cost-effective, and addresses all your pharmacy’s needs for today and the future while staying on the cusp of technology.
Pitfall 2: Failure to recognize and act upon changes in demand
Dispensing patterns are in constant flux. Failure to recognize such changes and reset reorder points appropriately and timely fashion leaves pharmacies exposed to costly overstocking and stockout risk.
The Datarithm® Solution
Our proprietary forecasting tool enables inventory management to be more efficient and on top of supply and demand changes and reordering. Advanced analytics provide insights into inventory trends, movement, opportunities, costs, customer service, and task completion. Moreover, Datarithm’s® system allows your pharmacy to continue to support your community’s growing demands by easing your already busy pharmacists’ workload and reducing overall financial stress.
Pitfall 3: Overstocked, dead, short-dated, and expired inventory
Certainly, pharmacies must carry inventory to meet the demand of their customers. Stocking the right inventory in the appropriate amount is crucial. Overstocked inventory results in unnecessary carry costs. Deadstock, while also impacting carry costs, presents additional risk to pharmacies in the form of potential expired returns, while short-dated and expired inventory will ultimately force financial write-downs. Proper inventory stocking presents every pharmacy with a catch-22, which is not easy to avoid.
The Datarithm® Solution
Every month for each inventory item, Datarithm® adjusts reorder point positions in reaction to changes in dispensing patterns and preferences of management/owners. There is no lag in recognition of demand changes. If dispensing is increasing or decreasing, reorder points adjust automatically via a bi-directional interface with PMS’s. This will enhance service levels via a reduction in stockouts and avoid overstocking as demand falls away. Additional pressure on costly overstocking through automatic return and transfer recommendations (multiple locations) assure that, should you have surplus inventory, levels will be as low as possible. In the long run, the incidents of expired returns will decline.
Pitfall 4: Spending too much time on inventory tasks
If your pharmacy technician is spending a good portion of their time managing inventory, it makes them less available for customer care. The core function of a pharmacy is to provide care for those who need it. Taking away that function from a pharmacist is taking away the opportunity for them to interact, answer any questions or concerns, and build a patient relationship, which is detrimental to the reputation of your pharmacy.
The Datarithm® Solution
Datarithm® is designed for simplicity, ease of use, and fast completion of critical inventory-related tasks. The task of replenishment point management is removed from the plate of technicians and pharmacists. Time spent placing nightly inventory orders is sharply reduced. Automated return and transfer recommendations (multiple locations) alleviate time spent searching inventory shelves for such opportunities. A simple cycle count function assures inventory precision and reduces both overstocking and stockouts. Datarithm’s® system frees up pharmacy staff to spend more time with customers.
For more ways on how Datarithm® can help your pharmacy make money, check out this blog post or schedule your free demo today.
