Inventory management is a big part of your pharmacy business. You don’t want to have too much cash tied up in inventory that is sitting on a shelf. On the other hand you don’t want to constantly be running out of stock and asking patients to wait an extra day until you can receive your next order.
You have to find that sweet spot in your inventory count, so you have enough to fill prescriptions but not so much that you have unused inventory that needs to be returned to your wholesaler. The key to finding that middle ground is knowing which drugs move the fastest, when you should order more, and the best ordering methods available to you.
Learn how using these three tools can help you stay on top of ordering pharmacy inventory.
Drug Usage Report
Your pharmacy software should offer some form of drug or inventory reporting to allow you to keep track of what is being used. A drug usage report works exactly as it sounds, allowing you to view the usage of your drug inventory over a period of time.
This report tracks which medications are fast movers and which are more likely to sit on your inventory shelf for months without being dispensed. Fast-moving medications need to be ordered more frequently, and it may be beneficial to have more than one bottle stocked at all times. On the other hand, you may not want to order slower moving medications until you’re completely out.
Pro tip: Another use of reports like this one allows you to compare prices of wholesalers in your pharmacy software, so you can get the best prices on medications. You might even be able to include rebates for a more accurate cost evaluation.
Another feature that should be available in your pharmacy software is the ability to set order points. Order points are limits in your inventory. When a medication drops below the order point your pharmacy software automatically adds that NDC to your next purchase order.
Once set up, this feature makes ordering a breeze. However, it takes some preparation, like adjusting the order points of each medication. You may want to start with giving all medications an order point of one less than the package size. This will ensure that you don’t run out of any medications when you’re getting started.
Once you run a drug usage report and have a better idea of the movement of your inventory, you can reset order points to better reflect medication usage.
Pro tip: Instead of setting each order point individually, you can sort and customize the drug usage report to include only the medications you want to change. Then, you can highlight those medications and change their order point all at once.
Your pharmacy software should be EDI capable, allowing you to interface with your wholesalers and order automatically. EDI ordering, like the usage report, allows you to compare wholesaler prices for medications without manually running a price update.
The EDI interface is a big part of what makes order points such an easy-to-use feature. Instead of logging into your wholesaler’s website and crafting an order from scratch, you will already have an order made up for you to review. You can add or eliminate items from your purchase order and send it off to your wholesale partner directly from your pharmacy software.
Pro tip: EDI ordering can also improve your inventory receiving process by automatically importing your inventory into your pharmacy software. This eliminates the possibility of receiving errors by you or your staff and makes the process much more efficient.
The world of pharmacy is unpredictable. Sometimes you run out of inventory or find yourself with some stock that needs to be returned to the wholesaler. However, if you use the methods discussed in this article effectively, these types of instances will occur less often. You will find yourself with less money tied up in inventory, and you will be able to better run your business without the hassle of constantly monitoring and managing inventory hanging over your head.