Maintaining a seamless supply chain is critical for pharmaceutical companies. A responsibly managed supply chain ensures quality, safety, and efficacy of medicines. Not just this but these companies need to comply with norms and keep track of their inventory while making sure proper management of medical supplies.
Any disruption in the supply chain and/or improper management can lead to higher prices and lower quality, which directly affect patients. Inventory management in the pharmaceutical industry focuses on inventory control, production planning, and distribution planning.
By leveraging an inventory management system, you can take proactive action to ensure patients get the right quality products. The system helps you understand the quantity of products, exact product locations, discrepancies in products, and products approaching expiration dates.
This blog will guide you through everything that you need to know about inventory management in the pharmaceutical industry.
What is Pharma Inventory Management?
It would be unfair to expect medical staff to possess the required skills to manage pharmaceutical inventory. That’s why businesses leverage the pharma software to manage their operations, such as preventing medication theft, tracking medicine stocks, expired items, and drug delivery. The software helps you to make informed decisions about inventory and get the latest information in real-time.
The inventory software reduces the risk of overstocking, inventory shrinkage, and missed opportunities. This enables productivity and checks drug availability at every point of the supply chain, saving millions of dollars for your business.
You can leverage a pharmaceutical inventory system that can help you in various departments, such as finance, production and labor cost, supply chain, and inventory management.
What Are the Challenges in Implementing?
A pharmacy company invests a large chunk of money in the management of inventory. A business with mismanagement of inventory has a high chance of failure.
A retail business, in the absence of a pharmaceutical inventory system, often fails to answer, “What is a good inventory turnover ratio for the pharmaceutical industry?” Here are some of the challenges businesses can face:
- Overstocking: Inaccurate measurements can be the reason for overstocking, which can cost you money. You need to store inventory in a warehouse space, leading to storage costs and deadstock.
- Understocking: Improper management of inventory can also cause understocking. There’s a chance that this will drive away clients.
- Greater Lead Time: Without accurate sales trends, you might not adapt to changing markets. It is very likely that customers buy drugs from elsewhere.
- Wastage: Overstocking can cause deadstock. Drugs can expire or be destroyed due to improper management.
- Human Error: The manual approach is prone to error. It is likely possible that misinformation can be entered into the system.
Benefits of Implementing Pharma Inventory Management Software
The pharmaceutical industry is highly regulated because it directly impacts human health. For pharmacy, it becomes essential to keep current stocks and be up to date with them. Companies need to properly manage their business, and thus inventory management systems for pharmacies are popular. Let’s see some benefits of implementing this software:
Improve Productivity
Inaccurate and outdated information can hamper productivity, leading to a disrupted supply chain. Pharma inventory management software facilitates accurate and up-to-date information about stock, allowing you to analyze crucial data. By analyzing your business-related data, you can manage your inventory efficiently, improving productivity.
Maintain Optimum Inventory Level
By implementing this software, you can effectively manage your stocks across all sales channels. This allows you to maintain the optimum stock level for them by automating reordering points.
Additionally, this enables information access to professionals, helping them to make the right decisions about dead stock and repeated prescriptions. You can avoid overstocking or understocking by levering this software and moving out the inventory which is about to expire.
Automate Business Process
The pharmacy also sells high-risk medicine, and they need to accurately maintain them. Inventory management system brings automation to the pharma industry and reduces human labor.
Additionally, it ensures accuracy by identifying the drug in low-demand, costly, and less shelf-life. The system helps you set a reorder point rather than storing them in a large capacity. This system helps you calculate accurately, resulting in effective billing.
Leverage a pharmaceutical inventory management system to manage your inventory and orders.
Detailed Reports on Drug Consumption
Most pharma retailers rely on manual methods to track consumption, or they don’t track it. It leads to the probability of error, resulting in a loss in revenue. On the other hand, implementing an inventory management system provides you with in-depth details about consumption patterns on a monthly, quarterly, and annual basis.
This helps you understand the fastest-selling drug, and which category and products are in most demand. You can manage your inventory according to these reports.
Reduced Cost
With optimum inventory level, you can reduce holding, improving cash flow. This software offers real-time data and sales trends, allowing you to prevent stock outs and excess inventory.
Features of the Best Pharma Inventory Management
Various options are available in the market for pharmaceutical inventory management software. Choosing the best-suited option might be overwhelming. Look out for these features in a system before purchasing it:
- Expired medicine can put the pharmacy business at a huge loss. Look for expiry control features, so you can track expiry dates and sell the items accordingly.
- The software should have integration capability with third-party apps, such as POS, EHR/EMR systems, and more.
- An inventory management system is incomplete with the ability for real-time inventory tracking, better collaboration, seamless data access, and reports generating.
- Look for software that supports your business in scaling and remains affordable.
- Understocking can pose a real threat to your business. Choose software with a re-order management feature. It will strike a balance between re-order and supply.
- Your pharmacy should comply with regulations, such as PHIPA, CSA, etc. Choose a business that can help you ensure smooth business operation.
How to Implement a Pharmaceutical Inventory Management System?
Inventory management can be instrumental in your pharmaceutical business. Here are key steps that can help you implement the inventory system.
- Start with utilizing pharma inventory management software.
- Set reorder points to maintain the optimum level of pharmaceutical inventory. This par level should be the minimum quantity for each medication to prevent overstocking or understocking.
- Utilize the best inventory management techniques, such as JIT inventory management, inventory control, expiry management, and ABC analysis.
- Train your staff to be familiar with the best practices.
Conclusion
Inventory management in the pharmaceutical industry can be a great tool for businesses to become successful and increase profitability. The software can help businesses to deal with challenges and leverage several benefits. Its benefits ensure that you can operate your business efficiently and prevent human error.
Inventory management plays a pivotal role in supply chain management. If you want to ensure successful supply chain management, you should consider business solutions, like Microsoft Dynamics 365. It has a dedicated Supply Chain solution, which comes under D365 F&O. Get in touch with an authorized Dynamics 365 implementation partner to learn more and seek guidance.
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