Inventory Control and Management. Pharmacy Technician III Lisa Lowry R.Ph.
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1 Inventory Control and Management Pharmacy Technician III Lisa Lowry R.Ph.
2 Inventory Control Vital importance to all types of pharmacies Inventory is largest asset Effects return on investment Properly serve patients Lose sales Lose patients
3 Two goals of inventory control Minimize total inventory investment Carry right mix of products for patient demand
4 Inventory Inventory is a list of articles in stock, with a description and quantity of each
5 Why is it important to pharmacists? Assures medications are accounted for and used legitimately Adequate stock available when needed Costs of large inventory avoided
6 Important questions How much inventory should be maintained? When should inventory levels be adjusted? Where should inventory be stored?
7 Inventory Turnover Inventory turnover rate determines effectiveness Number of times the average inventory is replaced over a period of time (usually annually) Target figure of times per year
8 Inventory Turnover Inventory Turnover rate = Purchases over a period of time divided by the average inventory for the period Example: A pharmacy purchased 550 products over a period of 3 months. If their average inventory was 235 products in a 3 month period, what is the inventory rate
9 Inventory turnover Purchases (550 over 3 months) divided by Average inventory (235 over 3 months) = 2.34 The formula for calculating average inventory is: beginning inventory + ending inventory 2
10 Inventory Turnover Example: For the period of January through June, a pharmacy had a beginning inventory of 312 products and an ending inventory or 336 products. What is the average inventory for this period?
11 Inventory Management Order book system Economic order quantity/economic order value system Computerized inventory system Minimum/maximum level system Inventory record card system Inventory of controlled substances
12 Management errors Miscounting final inventory Labels not easily read Poorly marked or unmarked locations for storage Poor lighting Data input errors Not documenting when used Bad handwriting Computer malfunctions Insufficient space
13 Order Book Simplest and widely used want book List of items that need to be ordered
14 EOQ/EOV Constant ordering costs, rate of demand and purchase prices Fixed lead times Complete orders delivered at one time Goal is to order as many units as possible to control delivery costs.
15 Computerized Inventory System Increase accuracy, generate more data and require less time Maintain perpetual control of inventories Updated constantly with sales and purchases All purchases and sales entered into computer Helps identify low turnover products and generates orders Time savings
16 Min/Max Level System Ordering product when a specified minimum level is reach not to exceed a maximum amount Reorder point (ROP) system Utilizes anticipated demand for product over time Flawed because it assumes demand is the same most of the time
17 Inventory Record Card System Card or paper system Requires staff time Historical use and frequency of ordering
18 Inventory of Controlled Substances Controlled Substance Act requires biennial Exact count of CII and estimate of others May be more frequent
19 Perpetual Inventory System Review drug use monthly Better monitoring (budget) CII every 10 days must be reconciled Only effective is input is accurate
20 Point of Sale System POS master Most suitable, flexible and open-ended system on the market Control stock accurately Handle significant volume of customers and transactions, credits, interstore transfers and returns Easy to use Best systems and support for business
21 Ordering Computer Manual or automatically Verify automatic orders Confirmations should be printed so pharmacy has hard copy Out of stock, back order or discontinued
22 Receiving Important part of operation Checked and verified individual with printed copy Contact supplier immediately with errors Look for incorrect, outdated, damaged or missing items Controlled substances shipped separately Received by pharmacist
23 Receiving Bar coding is helpful but lack of universal bar coding Reduces medication errors Saves dollars, times and lives
24 Stocking Bulk stock bottles unit-dose packaging Specific storage requirements Room temp, refrigeration, light Stock by manufacturer name Generic name Trade name Verify expiration dates Ample space
25 Expired Stock Expired, deteriorated, contaminated or nonusable products should be immediately removed Container labeled with Expired drugs DO NOT USE Document disposal
26 Drug Recalls FDA can request if manufacturer not willing Class I Class II Class III
27 Drug Formulary Lists or catalogs of drugs approved for use with in a hospital or for reimbursement by a third-party payer Closed formulary: only a limited number of products in each drug classification are covered Open formulary: includes all pharmaceutical products Restricted formulary: is a mixture of both
28 Drug Formulary Eliminate therapeutic duplication Best drug at lowest cost Controls inventory Hospitals can make request to Pharmacy and Therapeutics Committee (P&T) Managed care organizations and pharmacybenefit management companies Ethical questions
29 Repackaging Repackage bulk containers to patient-specific containers Unit-of-use packaging Batch repackaging
30 Automated Dispensing System Small space requirements Fast and accurate counting Minimal renovations
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