Inventory control is a vital component of hospital pharmacy management. It ensures that medicines and medical supplies are available when needed while preventing wastage, stock-outs, and financial loss. Optimal inventory control contributes to patient safety, cost-effective healthcare delivery, and smooth functioning of the pharmacy’s supply chain. Because drugs form one of the highest expenditure areas in hospitals, scientific inventory management is essential.
What Is Inventory Control?
Inventory control refers to the systematic process of planning, monitoring, and managing the availability, storage, and flow of pharmaceuticals to maintain adequate supply without excessive stock. It includes forecasting demand, setting stock levels, selecting ordering methods, and monitoring consumption trends.
Objectives of Inventory Control
- Ensure uninterrupted supply of essential medicines.
- Reduce wastage due to expiry, damage, or overstocking.
- Improve utilization of hospital financial resources.
- Maintain optimum stock levels at all times.
- Prevent shortages and treatment delays.
- Streamline purchasing and warehousing activities.
Importance of Inventory Control in Hospitals
- Hospitals handle thousands of medicines with varying shelf-lives and costs.
- Proper inventory management ensures clinical departments receive drugs promptly.
- Reduces emergency procurement, which is often expensive and risky.
- Improves accountability and transparency in drug distribution.
- Supports financial planning through accurate consumption reports.
Stock Levels in Inventory Control
To maintain continuous availability, hospitals define specific stock levels. These include:
1. Minimum Stock Level
The lowest quantity of a drug that must always be available. Falling below this level triggers emergency replenishment.
2. Maximum Stock Level
The upper limit beyond which stock should not be stored to avoid wastage, expiry, and over-investment.
3. Buffer or Safety Stock
Extra stock maintained to meet unexpected increases in demand or delays in supply.
4. Re-order Level
The level at which a new order should be placed. It depends on consumption rate and lead time.
5. Lead Time
The time gap between placing an order and receiving the supply.
Techniques of Inventory Control
Various analytical techniques help pharmacy managers prioritize and monitor inventory based on cost, criticality, and usage patterns.
1. ABC Analysis (Always Better Control)
This method classifies drugs based on annual consumption value:
- A Items: 10% of items, account for ~70% of expenditure. Require strict control.
- B Items: 20% of items, account for ~20% of expenditure.
- C Items: 70% of items, account for ~10% of expenditure.
Advantages
- Helps focus on high-cost, critical medicines.
- Reduces overall procurement costs.
- Improves budgeting and planning.
2. VED Analysis (Vital, Essential, Desirable)
Classifies medicines based on therapeutic importance:
- V – Vital: Life-saving drugs; must always be available.
- E – Essential: Needed for effective care; shortages affect treatment.
- D – Desirable: Non-essential; lower priority.
3. FSN Analysis (Fast-moving, Slow-moving, Non-moving)
Classification based on consumption frequency:
- Fast-moving: High turnover items.
- Slow-moving: Used infrequently.
- Non-moving: No use in a specified period; may require disposal.
4. XYZ Analysis
Based on stock value at a given point:
- X Items: High-value items needing strict monitoring.
- Y Items: Moderate-value items.
- Z Items: Low-value items with minimal control required.
5. SDE Analysis
Classification based on availability in the market:
- S – Scarce
- D – Difficult to obtain
- E – Easily available
Economic Order Quantity (EOQ)
EOQ determines the most economical quantity of drugs to order at a time, minimizing total inventory cost.
Assumptions of EOQ
- Demand is constant and known.
- Lead time is fixed.
- No stockouts are allowed.
- Ordering and holding costs are the only variables.
Benefits
- Reduces carrying cost.
- Prevents overstocking and understocking.
- Standardizes ordering quantities.
Inventory Control Systems
1. Two-Bin System
Stock is divided into two bins—one for current use and one for backup. When the first bin is empty, a new order is placed.
2. Perpetual Inventory System
Real-time tracking through stock cards or computerized systems.
3. Periodic Review System
Stock checked at regular intervals; orders placed based on total requirement.
Documentation in Inventory Control
- Stock registers
- Bin cards and ledger cards
- Issue vouchers and purchase orders
- Expiry and near-expiry reports
- Slow-moving and non-moving stock reports
Common Problems in Inventory Management
- Overstocking leading to expiry and wastage.
- Stock-outs affecting treatment decisions.
- Inaccurate stock records.
- Poor forecasting or consumption analysis.
- Lack of coordination between procurement and pharmacy staff.
Role of Pharmacists in Inventory Control
- Forecast drug requirements accurately.
- Monitor inventory movement using analytical tools.
- Maintain proper documentation and computerized records.
- Prevent pilferage, expiry, and overstocking.
- Coordinate with suppliers and procurement teams.
- Ensure availability of vital and essential medicines.
Detailed Notes:
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