Managing any retail assortment can be complex but managing prescription medication inventory presents a unique challenge. Not only are prescription medications highly regulated, but they’re regulated differently in each country where a pharmacy operates.
That’s according to Alessandro Sciacco, senior manager of solution consulting EMEA South, and Johan Strömberg, senior solution consultant at Relex Solutions.
“No matter where pharmacies operate, prescription medications pose inventory management challenges that most other retailers don’t have to tackle,” says Sciacco. “The prescription medications category is extremely complex and includes a combination of fast and slow-moving products that expire or require temperature control.
“As pharmacies worldwide move to an omnichannel model, new layers of complexity are being added, affecting how and where medications are stocked and delivered,” he continued. “Fortunately, modern planning solutions are well-equipped to support pharmacies as they face these challenges. Pharmacies should not overly rely on one-off orders for medications that aren’t in stock, as this approach can lead to lost sales and dissatisfied customers. There is also the issue of overstock and spoilage, which can hurt already tight margins.”
Fast-moving prescription medications are typically inexpensive to stock, meaning pharmacies can ensure high availability to match the high demand for these items without risking a hit to their bottom line. Slow-moving prescriptions typically don’t have a lot of sales data available, so accurate demand forecasting is difficult.
“To successfully manage demand for fast and slow-moving prescriptions, pharmacies need a very flexible planning system,” says Stromberg. “Supply chain planners should be able to configure their solution to automate replenishment orders for fast movers. For slow-moving, rare, or expensive drugs, pharmacists should be able to submit information about local demand so the system can determine if these medications should be added to their location’s assortment.
“While every pharmacy wants to optimise its prescription drug inventory, what’s optimal for one location is unlikely to be optimal for another,” he said. “Busy locations with high turnover and a small back room face different challenges than locations with less foot traffic but plenty of storage space or locations that must fulfil both in-person and online orders.”
With increased amounts of input data, advanced inventory management systems can automate many replenishment tasks. To effectively meet variable local demand, the systems must be flexible enough to allow users to customise the replenishment strategies for select locations.
While fast-moving prescription medications can be replenished, like many other items in retail, planners can configure systems to manage slow movers to avoid lost sales resulting from customers repeatedly finding products unavailable.
For pharmacies to successfully manage prescription medication inventory, planners must have a tool that can automate chainwide forecasting and replenishment. At the same time, the system should allow pharmacists to share local trends and easily make localised modifications as needed.
By using an automated system to handle the most common medications, local teams are free to focus on exceptions and manually modify orders based on local demand.