Need a pressure release valve for your pharmacy?
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by Dr. Alex Toth<br/>
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Dr. Alex Toth is the Owner of Plumsted Pharmacy in New Jersey and Co-Founder of InStockRx.<br/>
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If you are a Community Pharmacy Owner or Pharmacist in Charge looking for new strategies to improve your margins, this is for you.<br/>
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Your pharmacy is a busy place, and the pressure is on<br/>
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From the moment you walk into your pharmacy every morning, things start to happen… FAST. The phone starts ringing, patients begin asking questions, and meanwhile, you have dozens of prescriptions waiting to be checked. Even the very best pharmacy owners and operators view this controlled chaos as the norm. With the role of the pharmacist continuing to expand, and more services being offered at the pharmacy level (e.g., immunizations), the controlled chaos starts feeling more like a pressure cooker.<br/>
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The number one goal for every pharmacy owner is to safely serve their patients with the best care possible, while juggling these responsibilities. The reality is that this juggling act leaves very little time for pharmacy owners to focus on their business operations, including human resources, accounting, and inventory management. It should be no surprise then that only about 30% of independent pharmacies in the U.S. have the capabilities to run “perpetual” inventory systems.<br/>
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The pressure mounts: key constraints preventing pharmacies from achieving perpetual inventory management<br/>
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Inventory management is a daunting task for pharmacy managers. The typical independent pharmacy has over 2,600 individual “NDCs” on their shelves that they must keep track of for overstock and expirations. Additionally, there is little to no training for pharmacy staff that take on this responsibility. When I started as a pharmacy technician, I was simply assigned a bay in the prescription department, with the responsibility of policing the shelves and pulling expiring inventory.<br/>
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A very common practice that I see is pharmacy staff periodically running usage reports for every item they have to determine just how much they should keep on their shelves. This is an extremely manual and time-consuming process. Plus, this begins to create a slippery slope of trading time away from what matters most for your business – patient care and the customer experience.<br/>
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Another constraint is the lack of a central inventory management system for pharmacies. Often, inventory management at pharmacies is done by “feel”. It is hard to train new staff appropriately because it’s more like training by tribal knowledge vs. using a reliable platform for all employees to consistently monitor pharmacy inventory.<br/>
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Release the pressure with The ABCs of Inventory Management<br/>
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If you are short on time at the pharmacy (who isn’t these days?!), then focus on what really matters. How do you eat an elephant? One bite at a time.<br/>
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Start by dividing your inventory into 3 categories and then work through from there. <br/>
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Category “A”: 10% of inventory but 70% of sales<br/>
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Example: All fast-moving inventory <br/>
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Focus on tight inventory controls<br/>
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Optimize pricing on these items <br/>
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Maintain consistent stock of these items (some overstock is expected) <br/>
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Category “B”: 20% of inventory and 20% of sales<br/>
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Example: items that typically sit on shelf less than 30 days <br/>
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Key objective here is inventory optimization <br/>
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Only keep what you need on the shelf for patients who you know who consistently pick up <br/>
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Significant buying opportunities for this category <br/>
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Category “C”: 70% of inventory but 10% of sales<br/>
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Example: Seasonal items /items that you need to have for those occasional prescriptions. <br/>
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Monitor for dead stock and expiring stock as turnover is lower <br/>
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Keep the bare minimum of inventory on your shelf to meet patient demand <br/>
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Another pressure release valve: Inventory Management technology to improve the customer experience at your pharmacy<br/>
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How can more pharmacies continue to make progress on achieving perpetual inventory and still deliver great patient care? I’m so glad you asked. The answer is by leveraging new technology and automation to do the work for your pharmacy.<br/>
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Once you have started to understand and work through the ABCs of your pharmacy inventory, it becomes easier to use technology that helps streamline operations and take even more pressure off.<br/>
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At InStockRx, we provide a cloud-based inventory management platform to help pharmacies better understand their largest expense category and turn problem inventory into cashflow. We have found that pharmacy owners who use our platform are able to delegate inventory responsibilities to staff and technicians because of its easy-to-use informative tools. The platform also offers a marketplace with proactive inventory management suggestions. <br/>
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This is the next generation of pharmacy-to-pharmacy marketplaces that helps independent pharmacies work together to better serve patients and increase cash flow.<br/>
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Are you ready to release some of the pressure off your pharmacy, leverage technology and turn your problem inventory into cashflow? Click here to get started with InStockRx. <br/>
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by Dr. Alex Toth<br/>
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Dr. Alex Toth is the Owner of Plumsted Pharmacy in New Jersey and Co-Founder of InStockRx.