Pharmacy Inventory Management

Five Ways Your Pharmacy Can Optimize Inventory Transfers

Transferring any product can lead to logistical difficulties and costly inefficiencies. For pharmacists, it's important your products get where they're needed when your patients need them.

5 Ways Your Pharmacy Can Optimize Inventory Transfers
Calvin Hunsicker

Calvin Hunsicker

Calvin is a former pharmacy owner who decided there needed to be a better way for pharmacies to purchase smarter. This led him to found SureCost and serve as the Chief Product Officer, guiding innovation at SureCost. With over three decades of pharmacy experience, Calvin is excited to share some key insights on the best way to save time and money through purchasing smarter. Calvin works with pharmacies across the country to set the vision at SureCost. Our mission is to ensure pharmacy teams save more, stay compliant and work smarter.

Even when the actual distance between points is small, transferring inventory can create huge logistical issues, costly inefficiencies and potential risks. 

Maybe your pharmacy has multiple locations. Or your healthcare organization distributes prescription drugs for different departments. Either way, you’re not just moving things. You’re taking responsibility for the secure transfer of regulated products that are essential to your patients’ health. That’s the case whether you’re transferring items between branches in the same town or across state lines. 

With that in mind, here are five best practices for managing inventory transfers. These tactics are aimed at going beyond just effectively handling your stock: they’ll help you harness its true value.

1. Leverage Excess Inventory

Managing excess inventory in a larger pharmacy or with multiple locations can be costly and time-consuming. You want an inventory system that provides awareness of excess inventory and if any other locations or departments can use that excess. The ideal scenario is to have the system automatically recommend requesting excess inventory for a location that is in need at the time of purchasing.  

Many pharmacies have to run multiple reports to find where the excess inventory is located and where that inventory should be sent. That second step requires notifying pharmacies that they have excess inventory and where to send it. After the notification process is done, you need to follow up to ensure that pharmacies actually transferred the inventory correctly. This practice is time-consuming, requiring many emails and phone calls, and it still doesn’t ensure inventory was pulled, sent and received to the correct location.

Your inventory system should allow for easy tracking and verification of inventory being transferred, whether that transfer is being “pushed” to another location or being “pulled” (i.e., requested). You will also want verification of what is being filled by whom and who is receiving what.

A best-in-class inventory management solution combines with purchasing so you know exactly what each location has in stock. It also checks for excess inventory at the point of ordering: when you place an order, the system examines your current stock across all pharmacies and gives you the option to automate when items should be transferred from another location. 

Regardless of the size of your pharmacy, knowing when to transfer excess inventory enables you to reduce unnecessary purchases, prevent spoilage and cut down on last-minute transfers.

2. Central Warehouses

At hospitals, chain pharmacies, LTC facilities and other large organizations, volume necessitates buying and dispensing products from a warehouse or other centralized inventory hub. It is challenging to get the pharmacies to plan and order products from the warehouse when their normal routine is to order from the wholesaler. Having a system that automatically determines which items should be acquired from the warehouse at the time of purchase ensures that warehouse-carried items are properly requested from the warehouse (and not the wholesaler). There may be times when items are needed from the wholesaler due to timing, but those should be exceptions—and you should track why the user is making that purchase.

To avoid unnecessary purchases and stock overages, large organizations need a tool that can easily analyze, update and transfer inventory at their hub or warehouse. They can then schedule transfers from the warehouse at set periods or as needed according to specific parameters. The system will then auto-create orders based on programmed amounts. Because it’s done electronically, you streamline the process and reduce manual errors. You can also prorate transfer amounts according to each location’s needs (rather than operating on a first-come-first-served model that may send too much to one location). 

3. Maximize Transfers 

Even a transfer between two nearby locations can still create issues. That’s why you want to ensure you’re conducting transfers as efficiently as possible only when they’re truly needed. 

An assured inventory—using what’s on your shelves before you have to order new products from a vendor—can save you money and time. In some cases, shipping costs, labor expenses and other factors may diminish the benefits of sticking to your own stock. A vendor may sometimes be able to get the product  it’s needed faster. 

You have to ensure that transfers are literally worth it. Find technology to help you eliminate transfers that aren’t cost-effective. The right inventory management solution empowers you to map your locations, configure different minimums for each location and set rules for transfers (like “no Schedule II drugs”) and when to recommend or restrict transfers. Integration with purchasing lets you split your replenishment: transfer enough to satisfy your immediate need and order the remainder from your wholesaler.

Establishing rules ensures that your team is following your company policies and allows for the efficient management of transfers.

4. Document Processes

As pharmacists, we know the importance of an accurate chain of custody. Beyond the legal requirements, it’s a matter of accountability within our business and safety for our patients. That’s why it’s crucial to track inventory through its entire life cycle: ordering, receiving, dispensing, adjustments and transfers. 

We can break transfers down into further stages:

  • Requesting to pull stock from a location or push stock where it could be better utilized
  • Filling the request by retrieving the product from a source and sending it out
  • Receiving that product at the destination with confirmation that the correct item arrived

This may sound simple, but each step has specific users, locations, and transactional timestamps. It’s important to track all of these variables. That granular record of your chain of custody lets you see exactly where an issue may have originated and allows you to comply in case of an audit. This depth of information is useful, but it gets intricate. An electronic tracking system can make capturing sophisticated data at each stage easier. 

The best solutions do more than just house data. The ideal solution will also streamline the transfer process for efficiency and documentation at each stage. For example, either the source or destination pharmacy can initiate the transfer request in either direction through a simple interface. They can then set up notifications to the receiving party that a request was made, track the fulfillment process and inform the originating staff when the products are received. Transfer history reports break down which transfers have been requested, filled and received at any given point.

The right solution should also adjust inventory levels at each stage. If a pharmacy is reviewing its stock, inventory counts should reflect products on their way to that location and then automatically update the actual “on-hand” inventory once they receive the item. Similarly, the pharmacy supplying the item should see it removed from their counts even if the bottle hasn’t been taken off their shelf yet. 

5. Set Controls 

Transfers must be executed within the context of industry regulations, federal and state laws and internal security protocols. User controls are obviously a huge factor in ensuring safe, compliant transfers. That's why pharmacies need a tool to monitor who can initiate transfers to which locations.  

For example, certain states prohibit which drugs can be brought into their region. Pharmacy staff may know about these restrictions, but human errors still occur that can lead to wasted delivery attempts (or more severe ramifications for not following laws and regulations). An inventory solution will help you compensate for these dynamics and eliminate unauthorized transfers. You can manage these relationships centrally and make decisions about which team members are authorized to request or process transfers.

Manual error, diversions in the chain of custody and counterfeit drugs are an unfortunate part of our industry. The more control you and your team can exercise over transferring products, the more you can reduce your potential liability and ensure safety and accountability—while also sleeping a little better!

If you are interested in learning how SureCost can help your pharmacy save more, work smarter and stay compliant, book a meeting today with one of our experts.

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