The objective of this study were two-fold: (i) to document the current inventory management and control system as prastised by representative retail drug stores in Lahore, and (ii) to identify problems faced by retailer in utilizing modren technology in inventory management and control system. The research methodology involved in-depht interviews with leading retail pharmacies in Lahore. INVENTORY MANAGEMENT What is Inventory? “The goods bought by a dealer in order to resell them on profit. For the period that the dealer holds the goods in inventory, he or she is bearing the risk related to the goods, which may change in price. What is “Inventory Management” “Involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check”. Inventory management software (Distiller, Donor Perfect, Engineer Toolset) helps create invoices, purchase orders, receiving lists, payment receipts and can print bar coded labels.
An inventory management software system configured to your warehouse, retail or product line will help to create revenue for your company The area of inventory management include following • Inventory Management Definition Inventory Management Terms • Inventory Management Purposes • Definition and Objectives for Inventory Management • Organizational Hierarchy of Inventory Management • Inventory Management Planning • Inventory Management Controls for Inventory • Determining Inventory Management Stock Levels INVENTORY MANAGEMENT AT RETAIL LEVEL DRUG STORE Introduction: Inventory management has been computerized in most drug stores. All computers are direclty connected with the head office main server. Virtually wholesalers provide inventory control assistance through computerized product movement reports.
Drug stores provide the same information on products ordered through the warehouse. Inventory Reordering & Recording: Inventory management is decentralized. One person is responsible for one shelf each. Pharmacy technician is responsible deciding what to reorder, when to reorder, and how much to reorder. Decisions are taken based on experience. Inventory is reordered daily through telephone calls. Drugs are mostly delivered by head office or their authorized dealers at the store. Items are generally delivered within 2-3 days. Deliveries are checked against invoices.
When the order is received the pharmacy technician record the stock in software with the sale price, expiry date, batch number and receiving date also this information is automatically saved in head office sever. Inventory maintenance: Ordering and maintenance of stock levels is often the responsibility of the pharmacy technician. Many inventory management systems are available for use within the pharmacy. Regardless of the system used the technician must ensure that stock levles are appropriate to allow the pharmacy to operate efficiently without having to borrow stock or order stock at high prices.
When stock is delivered, it must be checked and verified against the order. Receipt of the order must be clearly marked on the invoice and feed in the computer. All orders must be stored within the pharmacy. Any damaged goods or expired drugs must be returned or properly disposed of. Inventory checking: In order for a retailer to stay in business, it must have the products that the customer wants on hand when the customer wants them. If not, the retailer will have to back-order the product. Inventory ckecking takes 20 to 30 minutes on computer and is checked daily by 3 or 4 employees.
The process is fairly casual, and the individuals are not permanently designatd for this job. There is no fromal annual store-wide stock taking. Monitoring shrinkage: Inventory shrinkage is losses due to shoplifting, employee theft, and robbery. Pharmacists should be observant, say hello to customer, keep displys neat, install security mirrors, and remove high fixture to minimize shoplifting. Some pharmacies use technologies such as inventory control bars to prevent loss of product from theft. It is equally important to recruit honest personnel and monitor their activities as well.
Inventory Control: The pharmacy technician is responsible for drug management in pharmacy, including purchasing and inventory control. Once the formulary status of a drug is determined, the decision regarding the brand of product made by branch manager. Factors such as quality of manyfacturer, cost and dosage forms available all play a role in this decision. Research issues and findings The Researchers have three major pharmacitical outlets in Lahore Fazal Din, Servaid and Guardian pharmacy and they are find the some issues which researchers are going to discuss below… Inventory management method:
There are three inventory management methods (1) visual method, (2) periodic method, and perpetual method. But now in modern age almost 80% pharmaceuticals outlets use perpetual inventory control method. Fazal Din, Servaid and Guardian pharmacy also use perpetual inventory management method. As the name implies, perpetual inventory control methods monitor inventory constantly through the use of technology (e. g. , computer). The precision of a perpetual system can generate a report at any moment to reveal precisely the amount and quantity of inventory that should be on hand for any product in the system.
Inventory shrinkage: This is a common problem in drugs inventory. In Servaid pharmacy lost, theft, wear and tear of inventory is charged to the employee’s salary. But in Fazal Din and Guardian pharmacy lose in invetory is beared by the company. Shortage of medicine: When a pharmacitical company do not produce a specific medicine like “Panadol Tablet” due to any reason then supply will be short in the market . The branch managers of these pharmacies told to research group it is very difficult to control this situtation because the pharmacitical companies do not inform us before shortage.
In such situtation we offer subtitute with same formula otherwise we lose our customer and it decreases our goodwill. Use of software: All these pharmacies use computer software for inventory management these are very benefical and time consuming exercise. This softwear directly connected with the head office server. One person can check all stock of inventory within 20 to 30 minutes in front of computer. The software also creates automatic printed sales bills on the sale of drugs and also creat automatic invoice to ordering stock. Treatment of expiry:
When the specific batch of drugs is reaching near expiry the software alerted and branch manager inform to their head office. In such case the pharmaciticals company sent a person who collects the medicine on the behalf of the company. If the employees of the pharmacy are unable to provide expiry drugs on time then the lose of expiry drugs is beared by the pharmacy. Temperature sensitive inventory: Drugs are kept in light temperature or moisture-free storage conditions. All drugs should be stored according to conditions described on the label. When specified on the label, controls for humidity, light, etc. hould be in place. Temperatures should be controlled and monitored using calibrated monitoring devices and records of temperature and alarms, were applicable, should be maintained.
Monitoring is conducted at points representing the extremes of the temperature range based on temperature mapping. These pharmacies used refrigerator to store Temperature sensitive drugs. Floor temperature: 59-86 F and refigeration: 40-42 Change of weather: Changes in weather are also effect on inventory. These pharmaceutical outlets change their order according to the requirement. Like he sale of brufen syrup and zyrtec tablets is increase in winter season that’s why pharmacy technician store more quantity of these medicines other then routine in winter season. Human error: When researcher visit these pharmacies they found that some time pharmacy technician make mistake for recording inventory of any medicine like actual inventory is 101 pieces and pharmacy technician record 110 pieces of inventory in computer software. There is always possibility of human error so there is need of verification of each unit with order invoice Inventory Types:
These Pharmacies provide different kinds of medicines to it’s customers like injections, tablets, syrup, capsule, syringe and drips etc… When the research group visits Servaid and Fazal Din Pharmacy they found that these pharmacies also provide other retail products like cosmetics and some other general store products.
References: Fazal Din Pharmacy, Guardian Pharmacy, Servaid Pharmacy, Pharmacy Managenet By: Shane P. Desselle and David P. Zgarrick Financial Management for Pharmacists By: Andrew L. Wilson The Pharmacy Informatics Primer By: Doina Dumitru http://www. referenceforbusiness. com/management/Int-Loc/Inventory-Management. html