PHAR 746PHAR 746Pharmacy ManagementPharmacy Management

Stacy Ramirez, Pharm.D.Stacy Ramirez, Pharm.D.

Clinical Assistant ProfessorClinical Assistant Professor

Department of Pharmacy Department of Pharmacy PracticePractice

GoalGoal

Explore the importance of Explore the importance of effective inventory management effective inventory management and outline tools to achieve this and outline tools to achieve this goalgoal

InventoryInventory

ProductProduct Single largest expenseSingle largest expense Least liquid assetLeast liquid asset Poor management negatively Poor management negatively

effectseffects– ProfitabilityProfitability– ServiceService– MoraleMorale– Patient livesPatient lives

Inventory ManagementInventory Management

Minimizing investment

Supply

and demand

Inventory ManagementInventory Management

PurchasingPurchasing– Right productRight product– Right vendorRight vendor– Right time and Right time and

amountamount– Right priceRight price

Inventory ManagementInventory Management

Target Markets

Industry Information

Formularies

Seasonal Factors

Past Sales

Space

Right Product

Inventory ManagementInventory Management

Right vendorRight vendor– ReliabilityReliability– Delivery optionsDelivery options– AccessAccess– Management Management

toolstools– ExtrasExtras– PricePrice

Inventory ManagementInventory Management

Right time and Right time and amountamount– Cycle stockCycle stock– Safety stockSafety stock– Anticipatory stockAnticipatory stock

Inventory ManagementInventory Management

Right PriceRight Price– Actual costActual cost– Up-chargesUp-charges– RebatesRebates– DiscountsDiscounts

PaymentPayment BulkBulk Exclusive agreementExclusive agreement

Inventory ManagementInventory Management

Ordering ProcessOrdering Process– Manual or visualManual or visual– Perpetual inventoryPerpetual inventory– CombinationCombination

Inventory ManagementInventory Management

EvaluationEvaluation– Inventory turnover ration (turns)Inventory turnover ration (turns)

ITOR=cost of goods sold/ITOR=cost of goods sold/

average inventoryaverage inventory ServiceService

– Out of stocksOut of stocks

Inventory ManagementInventory Management

Return processReturn process– Vendor or Vendor or

wholesalerwholesaler– ManufacturerManufacturer– Controlled Controlled

substancessubstances– Return to stockReturn to stock– Patient returnsPatient returns

Product in

Unable to Sell

RecoverCapital

Inventory ManagementInventory Management

TechnologyTechnology– Computer trackingComputer tracking– Web-based orderingWeb-based ordering– RoboticsRobotics– RFIDRFID

340B 340B

Allows eligible entities or Allows eligible entities or designee to purchase products designee to purchase products significantly below AWPsignificantly below AWP

Prime vendor programPrime vendor program Must be managed separately Must be managed separately

from other stockfrom other stock Safety net programSafety net program