Managing Inventory Well Is a Critical Function
A new year is a great time to take on this task, which helps maximize cash flow and contributes to overall patient safety.
It is January and there is no better time than the beginning of a new year to organize pharmacy inventory.
Managing inventory well is critical to the overall success of a pharmacy, not only to maximize cash flow but also to promote the overall safety of patients. If properly motivated and trained, pharmacy technicians can carry out this critical function, contributing invaluably to the overall success of day-to-day functions.
For some, organizing inventory may be viewed as an arduous task that does not contribute significantly to the overall function of a pharmacy, but following best practices daily will ensure a pharmacy’s inventory is accurate, maximizing inventory turnover rate and maintaining a high level of patient safety. Additionally, performing various inventory duties can be a great learning tool for techs to improve familiarity with medications.
When I began my career as a tech many years ago, keeping inventory organized and shelving medication orders was how I learned brand and generic equivalents. Many pharmacies now shelve medications strictly alphabetically. I worked in a pharmacy that shelved medications in alphabetical order by brand name, with the generic shelved next to its brandname counterpart. Although initially more challenging, committing to memory that trazodone was located with the D’s helped me identify its brand name as Desyrel, and reminded me that nefazodone belonged with the S’s next to its brand name, Serzone. This way of shelving medications is not commonly used these days, but techs can still benefit by focusing on attention to detail and improving their familiarity with the medications they dispense.
When it comes to inventory, there are tasks that should be done daily, weekly, monthly, and annually. All pharmacy personnel should be in the habit of comparing the actual on-hand inventory against the on-hand inventory reported in the dispensing software, paying attention to any large discrepancies. The shelves should be combed monthly to look for and pull medications set to expire during the month. January is the perfect time to label, by marker or sticker, any medications with an expiration date in the current year, making obvious which month any medications should be pulled to ensure the pharmacy does not dispense any that are expired or will expire before a dispensed prescription can be used entirely by a patient. To maximize inventory use and minimize the need to send expired products to a reverse distributor, all medications should be shelved following the “first-in, first-out” (FIFO) methodology. FIFO simply means that the medication set to expire the soonest should be in the front, with all other bottles of the medication placed behind it by order of expiration.
Although minimizing on-hand inventory can maximize cash flow and turnover rates and cash flow, it is also important for techs to understand how much inventory is needed on hand to fill prescriptions without running out of stock. Out-of-stock situations are inevitable but using a method like tracking reorder points (ROP) and reorder quantities (ROQ) for commonly dispensed medications will better allow for just-in-time ordering. Managing ROP and ROQ involves determining at which point, based on current on-hand inventory, a particular medication should be reordered and what quantity should be ordered to mitigate the risk of not having enough on hand to fill patient prescriptions. A medication’s ROP and ROQ depend upon the frequency with which the pharmacy receives medication orders and the volume of the medication dispensed between orders.
Finally, running reports to examine the most commonly dispensed medications at a pharmacy can help adjust or set up fast-mover shelves. Typically, pharmacies have shelves near the fill station set up to house their most commonly dispensed medications, or fast movers. The intent of doing so is to make it easier and faster to grab those bottles when filling. It is a good idea to review these fast movers and make any necessary adjustments on, at minimum, an annual basis. Although there may not be significant changes in the pharmacy’s high-volume medications year over year, new generics and medications are hitting the market all the time, so the next blockbuster brand or highly anticipated generic could displace other medications that were once high volume.
Successful inventory management takes practice, training, and, often, patience. Using best practices to ensure accurate on-hand counts, manage expired products, and minimize on-hand quantity while still serving patients is a responsibility shared by all in the pharmacy, but it can certainly be spearheaded by motivated and well-trained techs, proving once again the invaluable contribution that techs bring to the overall success of pharmacies everywhere.
JEREMY SASSER is a pharmacy content strategist at the National Healthcareer Association.