Solutions to Streamline Inventory Management

Independent pharmacists can use various tools to manage their front-end inventory, including point-of-sale (POS) systems, inventory management software, and barcode scanners. Inventory solutions software should include features such as real-time inventory tracking, automated ordering and restocking, and reporting on inventory metrics such as turnover and gross margin.

West Marin Pharmacy, a rural pharmacy in Port Reyes Station, California, provides customers with a wide range of front-end inventory, with owner Zsuzsanna Biran, RPh, buying from a number of different wholesalers.

The pharmacy uses Liberty and Vend software for front-end inventory management, and has found that the most important feature is being able to order from different vendors, generating lists for all based on how much was sold in a given timeframe.

“We do have some automated robotics built in, so when we’re down to 3 of an item, it will automatically order 5 more,” Biran said. “The difference between the front-end and prescription inventory is, it’s much easier to make a visual estimation on the prescription side.”

West Marin Pharmacy also has an auto-fill program where it automatically fills prescriptions, which helps Biran keep a tight inventory.

Bob Lomenick, RPh, owner and CEO of Tyson Drugs, a pharmacy in Holly Springs, Mississippi, utilizes an all-in-one software solution that helps him manage both his front-end inventory and behind-the-counter inventory.

“Not only do we use our dispensing software to keep up with our inventory and we have reorder points for daily usage that generates an order every day, but we also utilize our wholesaler’s app, where we can go and scan empty spaces on the shelves and that makes things easier,” he said. “A challenge between retail and Rx inventory is with retail, you want to keep a good selection of product on the shelves that are going to move, but it’s really hard to judge. Generally, you just have to keep a good eye on that.”

Thankfully, Lomenick’s pharmacy wholesaler provides him with good reports and planograms that helps them set a front-end strategy each year.

Anthony Caracci, PharmD, chief operations officer of Kex Rx Pharmacy & Home Care in Falls City, Nebraska, noted that front-end can be tough, but there are several tools within most pharmacy management systems designed to help. He points to Electronic Data Interchange (EDI) as one of the best.

“This tool works with the PMS’s perpetual inventory so when the store closes, an order is generated based on items that fell below their ROP,” he said. “Some PMS allow you to generate orders based on items sold through a certain time period. Either way, with an EDI connection, your PMS can submit the entire order directly to your wholesaler with the click of a button.”

Without EDI, a pharmacist would have to generate the report, log on to the wholesalers’ websites, and manually enter each item.

“It also provides for 2-way communication,” Caracci said. “Once an order is submitted and delivered, the EDI connection can add the inventory into your PMS automatically so you aren’t stuck scanning every item you received into your perpetual inventory. What’s more, EDI keeps the pricing of your OTC items current.”

Tim Lucas, RPh, owner of DownHome Pharmacy in Roanoke Virgina, explained that point of sale registers have the ability to help manage the front end inventory similar to any pharmacy software managing the prescription inventory and orders.

“Many try to predict anticipated needs for each season, however, many independents have smaller front ends and may not warrant these tools,” he said. “Setting your own reorder points by hand, avoid stocking items that don’t sell or go out of date, or even minimizing product options by not keeping ever stock size or style can go a long way to managing your front-end turnover.”

Most of the same challenges occur in both the front end and prescription inventory, with pharmacists needing to find that line between having enough to meet the needs of patients and not wasting money by leaving products sitting on the shelves.

“In both cases, you will need to always make adjustments and be flexible,” Lucas said. “Rely on your technicians to tell you what is selling and if customers were looking for something that you didn’t have in stock. Make sure that someone addresses any customer that seems to linger looking for a product, to see if they need help. Many times, you can replace an item with what you have that will work just as well and the customer is grateful for your service to them.”