There are five pivotal Inventory management principles. In this short article, we will give a concise explanation of each so that you can ensure a smooth and well-run pharmacy.
The Five Principles
1. Demand Forecasting
2. Warehouse Flow
3. Stock Rotation
4. Cycle Counting
5. Process Auditing
When these five principles are executed with precision, you can expect high efficiency and possibly even savings on cost.
1. Demand Forecasting
Your Pharmacy Inventory System would be incomplete without this essential feature.
Over supplying of non-essential inventory and undersupply of in-demand inventory can damage the overall cost and profit. Having access to accurate demand forecasts is essential for any business.
Whether you outsource this or rely on your own system for demand forecasting, it should be accurate. You need to have a crystal clear picture of what stock flies off the shelves, and what stock moves slowly but surely. Be prepared for constant changes in the market too, as certain stock can be favorable one moment and die down in excitement the next.
2. Warehouse Flow
When you picture your warehouse, does it ignite a vision of dirt and disorganization?
Your warehouse should not be an outdated stereotype. Get rid of dusty disorganization and introduce clean standardization and order. Developing a system for your warehouse to operate on will assist inconsistency and at the end of the day, shaving unnecessary cost and increasing profit.
3. Stock Rotation
Manage your inventory and stock in lot numbers. This can assist in viewing how fast certain stock is moving, which can further assist with demand forecasts. What’s more, managing inventory with lot numbers could end up reducing costs.
4. Cycle Counting
Do you want to keep up an accurate inventory? If you want to manage a successful business then your answer should be yes. By making use of cycle counting, you can gauge how successful your business is and also use it to identify where errors are being made. Certain companies have strict cycle counting procedures. If you are in a position to implement this for a pharmacy, you could choose to either maintain periodic counts of 100% of the stock, or you could opt for full-building counts. Whatever you choose, ensure that it is enforced responsibly and consistently.
5. Process Auditing
Process auditing will assist in identifying and localizing errors. In every business, there will be errors made, some smaller than others. The main purpose of process auditing is identifying these errors in a positive way, and provide a foundation for proactivity in the management of these errors. Each step of the transaction should be audited. Furthermore, process auditing will prove most beneficial when implemented early on in the beginning of the process and should be implemented consistently.
If you are looking to. Reduce the running costs for your pharmacy and increase both the efficiency and profit (let’s face it, these two go hand in hand) then careful attention and consistent focus on these core principles will prove to be a great assistance.