How You Manage Your Inventory Can Make (or Break) Your Pharmacy

It’s no secret that a large portion of your pharmacy expenses are tied to your inventory. That’s why managing your inventory is so important. When it’s done well, it can improve your cash flow and profitability. Alternatively, frequent stock issues can cost you not only the price of an expired item, but in lost sales and patient loyalty as well. Ultimately, how you manage your inventory can make – or break – your pharmacy. To maximize your shelf space and your bottom line, here are 5 tips to effectively manage your inventory.

1. Monitor product movement.

Keeping track of product movement allows you to set an appropriate on-hand quantity for each item. It’s important to find a balance between stockpiling and understocking your shelves.

• Stockpiling (or an overflow of product) is literally like letting money sit and, in some cases, collect dust on your shelves. Not only does this prevent you from investing in other areas of your pharmacy but if the inventory doesn’t move as expected, you could run into cash flow issues and complete losses if products expire.

• Understocking can also cost you. If your pharmacy is continuously out of stock when a patient tries to fill their prescription, they may take their business elsewhere. You’ll lose that specific sale and potentially the customer as well.

Tracking your sales can help you identify which medications move quickly and which don’t. It also helps you determine the amount of base and safety stock you’ll need for each product. Inventory management isn’t an annual, one-and-done event either. You should be checking your inventory at consistent intervals throughout the year. That way, you can identify and adapt to any changes or trends that may cause sales fluctuations during a particular season. Read more >