Owning and running a pharmacy can be a lucrative business, but at the same time, it is also a very responsible business to run. There are several aspects, mainly concerning the inventory that goes into managing a pharmacy. While inventory management is a challenge, it is also the most important part of a pharmacy’s successful operation. This is because it has a major impact on profit margins and bottom-line costs. As your inventory sitting on the shelf is probably your largest investment and an outgoing expense, managing it properly can positively impact your business.
So if you were daydreaming about a successful pharmacy where work flows seamlessly, cash flow is abundant, and you never run out of important medicines, ensuring a drug order that reaches accurately on time, then it’s time you wake up from the dream and act on it to make it a reality. In a highly competitive industry of pharmacy, with huge supply costs, managing inventory effectively is vital.
However, if all of these are getting difficult for you to relate and work with because of the truckload of questions, we have you covered with our simple 5-step guide for easy pharmacy inventory management.
1. A POS system is your savior
A pharmacy point of sale or POS system in today’s date is an extremely useful solution for your pharmacy store. The interface works efficiently with your pharmacy’s prescription process. One of the useful features of a POS system is that the detailed information of the medicine, its usage, side effects, and other valuable details can be seen on the POS system screen.
You can facilitate several other patient care programs and make your customer aware of the benefits and side effects of the medicine they will use by sharing this information. This will eventually increase your customers’ interest in your pharmacy, directly affecting your sales.
Other than this, a POS system helps you in managing other important information about medicines like their expiry date, composition, and the stock available in your inventory.
Having a POS system will give a detailed real-time report about your sales, which gives you an idea about the products that are selling well and the products that need more push or replacement. A POS system will also provide your customers with the ease of transacting payments while giving you clarity and transparency of these payments.
The POS software works like magic when it comes to providing the best customer services and inventory management as the transactions get accurate and faster. It streamlines your business while eliminating the risks of unavailability of items.
2. Understanding your inventory
As a business with fast-moving products, some believe that in a pharmacy one must buy stock in bulk as it is cost-effective, while some consider buying stock in small quantities as more profitable. Do not remain stuck in a fix as this can be solved if you understand your inventory, the locality in which you run your pharmacy, and the behavior of your customers.
Buying medicines in large quantities can decrease the cost per unit. Purchasing medicines for common chronic diseases like diabetes, hypertension, or common flu and cold, which is sold fast and easily can be bought in bulk. Through continuous monitoring, you can make changes in your way of ordering medicines that can optimize cash flow and workflow.
However, at the same time, expensive and less-selling medicines like those for Hepatitis or Cancer curing drugs can be sold on pre-order or such medicines can be ordered in very few numbers.
3. Monitor the inventory levels
A POS-based inventory system lets you automatically place orders for products to ensure a stable supply of medications. Nevertheless, sometimes you might need to make regular adjustments and updates to your daily management of stock.
This is important because the demand for a certain brand and interest of your customer might shift and you need to keep up with it. A quick comparison between your present inventories versus the prevailing demand in the market can make sure you are selling the right products and not the ones that have waning demand.
Beyond all this, one important way to keep a count and accurately monitor the inventory system is by using the manual process. Knowing exactly the number of stock available and how much more is needed helps you bridge the gap between you and your customers’ demand. For this, teamwork can play an important role.
Empower your employees by dividing up responsibilities to perform daily on-hand verification of quantities. This makes the process of verifying medicines regularly much more manageable and accurate as well.
4. Save products from being expired
No matter how accurately and judiciously you order and maintain your stock, few medicines are bound to be expired, leading to dead stock. There can be many reasons for this. For example, people discontinue therapies, heal from diseases, or change their dosage.
If your stock has not expired and is just sitting on the shelf for months, then you can ask your supplier about their return policies for a full or partial refund. As unmoving products lead to zero revenue and tied-up cash flow, even a partial refund is not a bad deal.
If you have good connections and tie-ups with other local pharmacies that have good sales of that particular product, you can send your products there, which can be a win-win situation for both. Therefore, it is a very important task to keep track of your products to remain updated about their expiry dates.
5. Take a physical stock count
Even though your POS system greatly helps you in keeping a track of your current inventory, its important at the same time for you as a pharmacist to know your inventory well and keep a note of it.
Making your employees aware of the medicines and where they are kept, what amount are they available in, and how to manage it is equally vital. An annual or semi-annual physical inventory check can provide you with the important details needed to fine-tune your orders, keep products fresh, and avoid issues of shrinkage or expiry.
Inventory management is an important step to keep your medical shop running smoothly and seamlessly. It would not be wrong to consider the inventory as the blood of your chemist shop. While at first the prospects of making major improvements to your inventory management can come as an overwhelming step, getting started with incremental steps is what matters. You, as a pharmacist, can take one step at a time and then keep moving towards an efficient direction.
As you are now aware of the objective of inventory management and its benefits, investing in good inventory management software is a profitable idea. The above-mentioned points guide you to various methods to incorporate in your pharmacy to increase your inventory turnover ratio and burgeon in your business.