Preventing Out Of Stock With Purchasing Policy And Inventory Control

Good purchasing policy and inventory control are the bedrock of community and hospital pharmacy. For community or hospital pharmacy to survive, it must have stock at all times. Failure on this area alone can hinder the success of the pharmacy.

Having stock at all times is one thing, having the right stock at the right quantities is the bottom line. Any pharmacist that wants to survive must develop a simple purchasing policy and inventory control. They all achieve one goal which is to increase sales and reduce cost.

Read Also: Steps it took to revive a dead community pharmacy

Purchasing policy involves knowing the right quantity and quality to buy, when to order, at what price and from what source. Inventory control is the result of this buying.

Benefits Of Purchasing Policy And Inventory Control

A good purchasing policy and inventory control system help to achieve the following goals;

• Sales: when a product is out of stock, the profit is lost to another community pharmacy when a customer make a demand for it.
• Customers: a community pharmacy that runs out of stock risk losing a potential customer or eevn an old customer to another pharmacy. This is very common when the customer gets better and satisfied service in the other pharmacy because they went there to get a product that is out is stock. And remember that competitors are doing everything to retain and get new customers.
• Life: the primary objective of every healthcare personnel is to save life. Running out of essential life saving medication can cause a customer morbidity or mortality.
• Cost: drug cost account for about 68 % of community pharmacy expenses. Stocking a wrong drug that is not sold out and not having the right stock can lead to waste of money.

Strategies Of Purchasing Policy And Inventory Control

Now that we know the importance of having adequate stock in the pharmacy, what and how can it be done? Let's us take a look at good some simple strategies.

For a new community pharmacy, a word of advice will be to make adequate enquiry. Contact community pharmacy around. Investigate the nature of the products they sell and where they make their purchases. The most effective way to do this is to work for free in the place for some time. The duration should be based on the data that is necessary. However the information that is needed is the prevailing disease in the area and drug of choice. 

Stocking community pharmacy

A look into the purchasing power of the locality is very important. Figure out how many branded products they can afford and how well they accept generics. With this information, a new community pharmacy can be born.

Wholesaler And Sales Representative

Buying from one place has its advantages and disadvantages. It open opportunity for discount. It also create a friendly atmosphere between the community pharmacist and the seller to give future credit. However, it is not always possible for one wholesaler to supply all products. That is why it is advisable to have more than one wholesaler. Another advantage is that it gives a level of insurance in case the main supplier goes out of business without prior notice, as one can fall back to the other suppliers.

When buying from wholesalers outlet, it is good to buy many items. This help to spread delivery and logistics cost in every item. For example, buying just one item with delivery cost of 10000 naira will increase the selling price as the selling price will be adjusted to cover for delivery cost. However, in a situation whereby the delivery cost is shared among many items bought, it reduces the selling cost and help to increase sales.

Strike deals with wholesaler. Most of them give huge discount when products are paid cash unlike credit. Others can give incentives depending on buying pattern.

Characteristics Of A Good Wholesaler

1. Reliable
2. Good price
3. Quality products
4. Short processing time
5. Incentives

Stocking

After initial stock of the community pharmacy, it is vital to study sales. Very important to look out for fast moving items and their rate. There are some formulas for calculating moving items. Some are discussed below.

The number of drugs sold per period. For example, the number of an item sold in a week for the next four weeks. If the four weeks total sales of the product is 100, a weekly average sales will be 25 items. However, a close look at the sales output will show that some weeks had more than 25 while others had less than 25. That small change is used to calculate the time new order can be made.

Some community pharmacy go to the market at a particular time in a period. What they do is to calculate the average quantity sales between each market day. It is this result they use to make order. For example, if a community pharmacy goes to market every 15 days and a product average sales in a week is 25 ± 5 and about 25 is remaining, the buying will be to order about 25 more times. The remaining 25 will last the first week and the new supply will last the second week. What if the order time and supply time is in weeks? That should be put into consideration too.

If 25 item is remaining and it will take a week for the order to arrive, the extra one week must be put into consideration. That is the order quantity will rise to 50 items to cover for the extra week.

A community pharmacy should classify it's products into three categories based on how fast, slow and in between. The fast moving drugs must never be out of stock. Those ones must have a minimum number in the pharmacy in excess before making order. Quantity ordered should be much. Slow moving ones may not need to have extra. In some cases, the last product must be sold before making a new order. The products in between fast and slow moving should be stock in small amount but should not be out of stock.

Read Also: How to stock new supply in community pharmacy

There are times wholesaler may include new and or expensive products. It is best to return such. This is because new products don't have market share yet. It will require a lot of talking to convince customers to buy. It becomes worse if the product is expensive. Such items can be ordered on customers request. And order should not be more than some few quantities.

No matter how well a community pharmacy work on purchasing policy and inventory control, some products will still be out of stock. Although, it will limit it. In such a case, the customers medical doctor can be contacted for a swap to alternative.

There are times some products get close to the day they are to expire. Such products should be returned on time depending on agreed return policy. If the product could not be returned, it is the duty of all and the pharmacist to see how such products will benefit customers and prescribed depending on existing laws.

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