3. computer system, either through manual entry or by bar-coding the incoming items. The challenge of productive inventory, management is to support an upward trend in sales while keeping the investment at the. The pharmacy decides how much. In addition, in hospital pharmacies and larger community, stores, some technicians specialize in purchasing; they spend the majority of their time. obtain it by a more expensive method (over-night delivery, hot-shot, ect.). In addition to patient safety and financial considerations, stringent regulatory requirements pertaining to drug traceability, inventory reporting and inventory management elevate the importance of maintaining effective control over drug inventories in today窶冱 ever- expanding healthcare compliance environment. Closely related to the costs of capital are the opportunity costs of using space for, one type of product rather than another. The selection of drugs for procurement should be based on the national essential drugs list. Left unrestricted, purchasing can become a daily activity conducted in bits and pieces, and hurriedly on a, time-available basis. Most important, a deal can only be profitable when the sale, not, the purchase, is completed. Procurement System of DH . all discounts, allowances, advertising dollars, Lead Time A factor used in ordering, based upon the number of, days from the time an order is placed to the time it’s, Mark-Up Also known as cost-plus. In a closed formulary, Forward Buying, Purchase of a larger quantity of a product than, Investment Buying required for current needs in anticipation of a price, increase. Describe three methods of inventory management. A successfully implemented inventory control program takes into account such, things as purchasing goods commensurate with demand, seasonal variation, changing, usage patterns, and monitoring for pilferage. risk-free investments, such as treasury bills, are often used instead. Stock rotation is an important inventory management principle that, encourages the use of products before they expire and helps prevent the use of expired, Pharmacy technicians usually spend more time handling and preparing, medications than pharmacists. expired products to the manufacturer or wholesaler prevents the use of these products, while enabling the department to receive either full or partial credit for them. If average usage and lead, time are both certain, no safety stock is necessary and should be dropped from the, Daily demand = 1,000/311 = 3.2154 vials per day, R = dL = (3.2154)(2) = 6.43 rd, 7 vials per day, One method of assessing the effectiveness of an inventory control system is the, turnover rate. Knowledge of the store KPI and statistics. are two types of formularies. In this course we will look at several models for minimizing the total. Are the vendor’s product lines innovative? Mark-up is also profit. The pharmacy is paying more for the same drugs—when they’re available—yet collecting less. Does the vendor stand behind the products? Learn vocabulary, terms, and more with flashcards, ... focuses on the procurement, drug storage and inventory control, repackaging and label considerations, ... -focuses on inventory control of the top 20% of the items carried. 43. With, this inventory control process, as its name suggests, stock on hand is counted at, predetermined intervals and compared to the minimum desired levels. Thus, a 25% discount on an item that will not be used is not, much of a deal. Shelf stickers can be coded for this to make the process easier. critical life-saving drugs used in a hospital). This means we use the last acquisition price. In some instances, the recall may. This means the pharmacy, uses the next acquisition price (replacement cost), for all units including those purchased for $1 and, Inventory Turn A turn describes how often inventory moves out or. Safety stock is the amount, of extra inventory kept on hand to protect against running out of stock owing to, unexpected demand and delays in delivery. Pharmaceuticals compounded or repackaged by the pharmacy department cannot, be returned and must be disposed of after they have expired. DRUG PROCUREMENT AND DISTRIBUTION TRACKING SYSTEM ABSTRACT Drug procurement and distribution tracking system is a set of computer programs that obtains the supplies of drugs, distribute the drugs and monitors the inventory control of the drugs. Perhaps even more important, visual systems commonly, focus on impending stock-outs rather than on excess inventory. These costs include such expenses as storage. Inventory Costs The costs associated with inventory management are summed up as: Acquisition costs, Procurement costs, Carrying costs … Inventory is simply the result of this buying. PROCUREMENT Procurement is defined as a process of acquiring supplies through purchases from the manufacturers, their agents like distributors or from private or public suppliers. type of system is used for the less expensive and least important items in the pharmacy, The primary advantages of the visual system of inventory control are that it is, relatively inexpensive, takes little time, and does not have to be conducted by personnel, who have special skills. When orders arrive from either the manufacturer or the wholesaler, they should be, accompanied by either an invoice or a packing slip that lists what the pharmacy is being, charged for. Five factors are especially important in supplier negotiations: (1) quantity, discounts, (2) cash discounts, (3) trade discounts, (4) promotional discounts, and (5), Unfortunately, not all deals may be worthwhile. • Accessibility. In pharmacy operations, inventory is referred to as the s tock of pharmaceutical products retained to meet future demand. The, emphasis of the OTB method is financial control of the pharmacy inventory. inventory, less the accounts payable suppliers. The cost of reordering inventory (also known as the “R” Cost), The cost of reordering is calculated by dividing the total annual cost of purchasing, stock line items by the number of purchase order line items for stock products issued by, Annual Cost of Issuing Purchase Order Line Items, Purchase Order Line Items Issued in the Past Year, Note that the cost of reordering is not calculated for a whole purchase order or, each piece purchased. reorder, assuming the pharmacy incorporates safety stock into its planning, is: Reorder point = (usage rate x lead time) + safety stock, Ideally, orders should be placed at the precise point in time at which usage during the, order lead time will have depleted the inventory on hand, so that no safety stock is. Select Accept cookies to consent to this use or Manage preferences to make your cookie choices. The safety stock must be carried when the pharmacy is not sure about either, the demand for the drug or the lead time or both. Once the product has been properly received it must be properly stored. reorder points. Thus, succeeding orders for the same item can be placed with these same suppliers with, confidence in the original selection. With this system, inventory is monitored at all times. As defined in the Drug and Pharmacies Regulation Act, 1990 ( DPRA) the DM is the pharmacist designated by the owner of the pharmacy, in information provided to the College, as the pharmacist responsible for managing the pharmacy. Discuss why inventory control is important for pharmacies. Sometimes the company name or logo is emphasized on the, Product Storage. Net Inventory Total merchandise inventory less accounts payable. Obtaining lower prices by making volume purchases – but one should not end, Having an adequate inventory on hand – but one should not get caught with, Deciding what products need to be replenished, Expediting the purchase order (if necessary), Processing the receiving paperwork for shipment, Approving the vendor’ invoice for payment. The ABC classification system groups items according to annual sales volume, in, an attempt to identify the small number of items that will account for most of the sales.
Meanwhile, the wholesaler delivery person just arrived with today’s order—4 hours late! This particular method attempts to balance the carrying cost inventory with the cost of, running out.