PHAR 746 Pharmacy Management Stacy Ramirez, Pharm.D. Clinical Assistant Professor Department of Pharmacy Practice

Goal Explore the importance of effective inventory management and outline tools to achieve this goal Explore the importance of effective inventory management and outline tools to achieve this goal

Inventory Product Product Single largest expense Single largest expense Least liquid asset Least liquid asset Poor management negatively effects Poor management negatively effects –Profitability –Service –Morale –Patient lives

Inventory Management Minimizing investment Supply and demand

Inventory Management Purchasing Purchasing –Right product –Right vendor –Right time and amount –Right price

Inventory Management Right Product SpacePast Sales Seasonal Factors Formularies Industry Information Target Markets

Inventory Management Right vendor Right vendor –Reliability –Delivery options –Access –Management tools –Extras –Price

Inventory Management Right time and amount Right time and amount –Cycle stock –Safety stock –Anticipatory stock

Inventory Management Right Price Right Price –Actual cost –Up-charges –Rebates –Discounts Payment Payment Bulk Bulk Exclusive agreement Exclusive agreement

Inventory Management Ordering Process Ordering Process –Manual or visual –Perpetual inventory –Combination

Inventory Management Evaluation Evaluation –Inventory turnover ration (turns) ITOR=cost of goods sold/ average inventory average inventory Service Service –Out of stocks

Inventory Management Return process Return process –Vendor or wholesaler –Manufacturer –Controlled substances –Return to stock –Patient returns Product in Unable to Sell Recover Capital

Inventory Management Technology Technology –Computer tracking –Web-based ordering –Robotics –RFID

340B Allows eligible entities or designee to purchase products significantly below AWP Allows eligible entities or designee to purchase products significantly below AWP Prime vendor program Prime vendor program Must be managed separately from other stock Must be managed separately from other stock Safety net program Safety net program