Solid inventory management practices are critical in virtually every business and across all industries. That said, implementing a strong perpetual inventory system in a pharmaceutical setting is of the utmost importance. After all, while many organizations benefit from having good inventory management practices, those in the pharmaceutical industry are bound to such practices by regulatory boards and local, state, and federal laws. And, even more importantly, the safety and satisfaction of their customers depend upon it.
In this article, we will explain why inventory management is essential for pharmacies, explain the role of perpetual inventory in pharmacy settings, and touch on some of the most beneficial pharmacy inventory management best practices.
Why is inventory management so essential for pharmacies?
From optimized patient safety and care to regulatory compliance to better data and demand forecasting, there is no shortage of reasons why inventory management is crucial for pharmacies. Here are four of the top reasons to implement an solid inventory management system for your pharmacy:
1. Improved care and safety for customers
First and foremost, an optimized inventory management system can ensure your pharmacy’s customers get the swift and safe care they need. With the right perpetual inventory system in place, your pharmacy will always know what medications are in stock, allowing your customers and their doctors to treat patients without delay.
This also leads to improved customer satisfaction. After all, if customers cannot get the medications they need in a timely fashion from your pharmacy, they’ll seek out a pharmacy that can provide those same medications sooner. This is a particular concern for smaller and independently owned pharmacies that compete with big-box pharmacies that have access to medications across a network of stores.
2. Optimized and accurate regulatory compliance
Unlike most other businesses, pharmacies must adhere to specific standards set by regulatory boards, health authorities, and legislators. This is especially true when it comes to controlled substances. The right inventory management strategy ensures that inventory is tracked correctly and that there are airtight records of that inventory history available at a moment’s notice.
3. Improved inventory control
Inventory control is the balancing act of maintaining enough inventory to swiftly meet customer demand without tying up your pharmacy’s resources on medications you won’t need to dispense soon. Maintaining perpetual inventory lets your business know exactly what it has on hand at any given moment and completely understand how its inventory was used in the past.
This knowledge empowers your team to make thoughtful and confident decisions about what medications to stock based not only on previous customer usage but also on the lead times and supply delays of your providers and manufacturers.
Such efforts can not only improve cash flow through smarter, leaner stocking but can also reduce inventory wastage, which usually occurs when medications expire or become obsolete. (For example, a flu shot from a previous season.)
4. Improved operational efficiency
Another benefit of optimizing perpetual inventory in pharmacies is that such a practice improves operational efficiency.
In other words, by implementing a pharmacy inventory strategy that allows your team to quickly track the comings and goings of all inventory along with its expiration date and other vital details, your team can streamline virtually every other task on its inventory to-do list. Such tasks include re-ordering, stocking, physically organizing, dispensing, and auditing medications and pharmaceutical supplies.
Additionally, implementing a perpetual inventory management system for your pharmacy should significantly reduce the time your pharmaceutical team needs to spend on inventory-related tasks. This can reduce the labor required to run your pharmacy or enable your business to shift those minutes and hours to faster, more personalized patient care.
Understanding perpetual inventory in pharmacy settings
Perpetual inventory lets pharmacies know exactly what medications and pharmaceutical supplies they have on hand at any time. Additionally, if your pharmaceutical business includes a network of pharmacies, perpetual inventory will allow you to look live into all your pharmacy’s inventories in a single place.
A perpetual inventory system, by definition, refers to an inventory tracking strategy in which the inventory system is updated every time a single medication, supply, or other item arrives at the pharmacy, is transferred, sold, or otherwise discarded.
While many industries utilize perpetual inventory systems, such a strategy is essential in the pharmaceutical setting. This is true for various reasons, including the speed at which patients need to receive their medications and the inventory management and reporting standards to which regulatory boards and federal auditors hold pharmacies.
The easiest way to implement a perpetual inventory system in a pharmacy setting is by selecting inventory management software that enables fast and easy barcode and QR code scanning.
Pharmacy inventory management best practices
For pharmacies looking to optimize their inventory management strategies, especially if they are ready to implement a perpetual inventory system using barcodes and QR codes, the following best practices can set up the pharmacy for success.
1. Organize your pharmacy
Most pharmacies are already quite organized. After all, physically organizing and separating medications—both unfilled and filled—is an essential part of maintaining a safe and compliant pharmacy.
That said, if you are just now beginning to implement a perpetual inventory strategy that utilizes barcodes, you may have some additional organizing to do, including turning boxes, cartons, and storage bins “barcode out” and ensuring the physical organization of your pharmacy matches the perpetual inventory management strategy you’ve designed.
2. Select the right software
Again, as you reorganize your pharmacy’s physical space, consider how this organization will work alongside your new inventory management software. Don’t be afraid to do a few walkthroughs outside of business hours to ensure you’re setting forth the best strategy for quick and effective scanning on the job.
Many modern inventory solutions are designed to be flexible and intuitive. Sortly, for example, allows users to create their own hierarchy of folders and tags, making it easy for pharmacies to create an organizational structure that matches the physical organization of their stores and shelves.
Related: Sortly Inventory Software for Medical Businesses
3. Insist on fast and easy barcoding
Once again, to properly maintain your pharmacy’s perpetual inventory, you’ll need to use barcodes and QR codes. After all, it’s virtually impossible to manually check items in and out in a fast-paced pharmaceutical setting. Besides, manual inventory management is prone to human error, especially when items look and sound alike, and because lines of data can (and do) get jumbled by tired eyes.
Fortunately, barcodes and QR codes cannot make the same mistakes. They are completely unique codes connected to the right item. For peace of mind, software solutions like Sortly make adding notes, item details, and high-resolution images easy so your team will always know they’re checking the correct item in or out.
4. Maintain accurate records—and articulate your standard operating procedure
Your pharmacy should create a standard operating procedure for its new perpetual inventory management strategy. This SOP should articulate exactly how inventory is managed and tracked within your pharmacy on an hourly, daily, weekly, quarterly, and even annual basis.
This includes denoting exactly how medication is stored, ordered, put back onto the shelves, and more.
Additionally, the SOP should indicate how your team can calculate its pharmacy inventory turnover rate. The pharmacy inventory turnover rate can help your business understand whether it’s ordering too much or too little inventory and how quickly it’s moving off the shelves. Discover the sweet spot for this ratio, and try adjusting how you order certain medications and supplies to stay within range of it.
You’ll also want your SOP to indicate precisely how inventory usage and history data is stored and for how long. Ensure that these directions match the most stringent rules and regulations your pharmacy is held to and that records are kept precisely as those regulatory boards insist.
Your standard operating procedure should also explain how internal audits are performed so that your pharmacy is completely prepared in the event of an external audit.
Pharmacy inventory template download
Whether your business just wants a pharmacy inventory checklist or is looking for a template to get started, Sortly’s free pharmact inventory spreadsheet is a great place to start. To help you get organized, we’ve pre-populated some of the most popular pharmacy supplies right onto the template.
Free Download: Pharmacy Inventory Template
Download our free pharmacy inventory template today! The template is pre-populated with common pharmacy inventory but is totally customizable–feel free to add your items along with custom details, rows, and columns specific to your pharmacy’s inventory.
Feel free to customize and add to this pharmacy inventory list template to account for your practice’s unique inventory. If you decide to upgrade to Sortly’s inventory app in the future, you’ll be able to bulk import this data directly into Sortly.
About Sortly
Sortly is an inventory management solution that helps you track, manage, and organize your inventory from any device, in any location. We’re an easy-to-use inventory software that’s perfect for large or small businesses. Sortly builds inventory tracking seamlessly into your workday so you can save time and money, satisfy your customers, and help your business succeed.
With Sortly, you can track inventory, supplies, parts, tools, assets like equipment and machinery, and anything else that matters to your business. It comes equipped with smart features like barcoding & QR coding, low stock alerts, customizable folders, data-rich reporting, and much more. Best of all, you can update inventory right from your smartphone, whether you’re on the job, in the warehouse, or on the go.
Whether you’re just getting started with inventory management or you’re an expert looking for a more efficient solution, we can transform how your company manages inventory—so you can focus on building your business. That’s why over 15,000 businesses globally trust us as their inventory management solution.
Start your two-week free trial of Sortly today.
