August 2021

What Does It Mean to Manage Inventory With Purpose?

August 24, 2021/in All, Pharmacy Operations/by pdsmarketing

Inventory management has a huge financial impact on your independent pharmacy. When your inventory isn’t being managed in an optimal way, it means cash is sitting on your shelves instead of in your pocket. This significantly restricts your cash flow and the ability to settle everyday expenses.

Today, we are going to crack the code on inventory for your independent pharmacy. We’ll do this by highlighting common mistakes, exploring best inventory management practices, and setting attainable goals for inventory turns.

The PDS benchmark is 16 inventory turns per year. To us, this indicates that inventory is being optimally managed. Some of our members have even exceeded this goal.

To achieve this goal, you need to know the ‘why’ behind your inventory levels. For many independent pharmacy owners, the reason is simply that they need to have the right products in at the right time. If you don’t have the right product in, you can’t dispense it. However, if you have too much of a product, it’s sitting on the shelf tying up your dollars. Taking control of your inventory means establishing best practices for satisfying your ‘why’ without overcompensating.

Some of the most common reasons for low inventory turns are a lack of proper policy and procedure, improper medical synchronization program, and a lack of team education.

The Impact of Inventory Control

In an ideal world, you would order your inventory and close up at the end of the day with nothing on your shelves and have no out of stocks. You would open the next day and have the same result. Although this isn’t a realistic goal for most pharmacies, it’s an important image to keep in mind when managing your inventory. When you optimize your inventory management with this in mind, you’ll experience greater operational efficiency, improved cash flow, and enhanced employee and patient satisfaction.

Creating a clear and straightforward process around inventory management unlocks operational efficiencies. Providing standardization of processes and reducing duplication of work allows you to reassign pharmacy duties and tasks to improve workflow.

Unnecessary inventory sitting on your shelf means fewer dollars in your pocket. When you manage your inventory with purpose and intention, reduce overstock, and increase inventory turns, you will generate greater cash flow for your pharmacy. This also means you will lose less money on outdated stock.

Employees and patients alike will experience greater satisfaction when you take control of your inventory. Staff will be less anxious and patients will deem your pharmacy more reliable when there are fewer out-of-stock products. Watch your pharmacy team thrive when you give them the opportunity to take ownership of this process.

Inventory Considerations

As you dive into optimizing the management of your independent pharmacy’s inventory, be sure to consider each of these three areas separately: your medication inventory, your OTC inventory, and your supplies inventory.

Medication inventory is your main area of consideration because it has the highest value, meaning it has the greatest impact on your cash flow and your bottom line. In a poorly managed inventory, employees will allow your medication inventory to grow out of control to avoid out-of-stock concerns. In an optimal inventory management system, you have calculated the required number of each item to have on hand and your team simply needs to respond to the plan you have in place.

OTC inventory is important to your pharmacy’s financial health, but it can be easy to forget about. Use the same approach to your OTC inventory management as you do with your medication inventory and don’t hesitate to remove items that don’t sell. You can also take this opportunity to add higher margin OTC items. Think about what your customers are looking for and what you can offer to make your pharmacy stand out.

When it comes to supplies, your needs will vary based on the nature of your pharmacy. Assess your pharmacy’s unique needs and consider ways to increase efficiency in your supply chain. In your office, this may mean investing in a more energy-efficient printer that takes a less expensive toner. For packaging, you may explore a more cost-effective option for vials and labels.

Take Control With PDS

Your inventory metrics and goal setting should not be left to guesswork or trial and error. In fact, when you work with a PDS coach, you’ll have access to calculations and members-only documents to take control of your inventory management. Our worksheets include an inventory control worksheet, an inventory reduction worksheet, and an inventory calendar that will all help you optimize your inventory management and free up much-needed cash resources. Book a free consultation with us today to get started.

See How This PDS Member Pharmacy Slashed Their Inventory By Half

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Even Pharmacists Should Take Their Vitamins in 2021

August 12, 2021/in Pharmacy Growth Strategies/by pdsmarketing

Every year it’s the same story – January 1st rolls around, and vitamins fly off the shelves as everyone vows to eat healthier, live better, and take care of themselves in the new year. But about halfway through those vitamin bottles, they are forgotten, to be guiltily looked upon whenever you need a cup or something from the spice cabinet.

What if there was a way for you, the pharmacist, to forge a different path in New Year’s Resolutions? We don’t need to be afraid of failed promises past. That’s if you can leverage the technology of today to help your patients stick to their vitamins.

The Booming Nutraceutical Industry

Wellness is on the rise. Every other commercial on TV is about how to feel good inside and out, with numerous new companies popping up to service this exact need. Vitamin delivery services that offer daily pre-packaged and customized doses are popping up everywhere. Fortunately, this industry is big enough for you to still get involved. According to a recent report, the nutraceutical market is estimated to reach $722.49 billion by 2027.

While vitamin makers were previously responsible for marketing and distributing their products, the pharmacist can help fill this gap and provide additional services to their patients. Instead of having to select from rows of bottles on the shelf, your customers can have a curated experience like those of mail-order services. They also get the added benefit of simpler daily management. Offering home delivery on nutraceuticals can provide convenience for your patients and help your pharmacy stay competitive. With pouch packaging, you can combine these vitamins in the same pouches as any prescription medications, making it easy for patients stay adherent to both.

How Technology Can Help

While big vitamin shops like GNC and Vitamin Shoppe are running towards packaging technology to compete with other mail-order brands, you already have a leg up. This technology has been used in the pharmacy industry for decades to help patients manage their medications. Even if you have not used it before, the infrastructure and training is in place for you to quickly implement this technology. By choosing scalable packaging technology, you can start with a solution that fits your current needs and volume and seamlessly builds as your business grows.

In a retail setting, incorporating packaging technology for nutraceuticals also allows you to reach a larger segment of your community. That includes those not taking maintenance medications. By catering to their wellness needs, you are building customer retention and loyalty to your pharmacy.

For long-term care, your patients may already be looking elsewhere for vitamins and supplements. By offering these in-house, you have better oversight of their complete medication and supplement regimen and can capture the revenue associated with these services.

Healthy Patients, Healthy Business

Just as with prescription medications, adherence is key with any vitamin regimen to see benefits. By incorporating the two into one pouch, you can also have better inventory control over how many – if any – vitamins you stock on your shelves. And in the instance of an LTC facility, you can capture the additional revenue from these additions without risking the loss of that business to a competitor.

About Parata

Parata offers the most comprehensive pharmacy automation portfolio to support improved patient outcomes, improve medication adherence, and provide more time for pharmacist-led value-based care. Comprising medication adherence packaging, dispensing technologies, inventory management, and workflow solutions, Parata’s solutions help people lead healthier lives. Scale and stay out in front on parata.com.

Extending the Patient Lifecycle in Your Pharmacy

August 2, 2021/in Pharmacy Growth Strategies/by pdsmarketing

As an independent pharmacy, your goal is to become a healthcare destination in your community. That means going far beyond dispensing. It means attracting patients that will stay with your pharmacy for the long-term. And don’t forget that a great number of referrals can come from physicians and other members of the community. Being involved in the entire patient lifecycle will get you closer to this goal.

Your Patient Lifecycle

Your patient lifecycle comprises the process of attracting, engaging, and delighting the patients you serve. In a thriving pharmacy, your patient lifecycle should progress indefinitely as you meet the changing needs of your patients.

Attract

Attracting patients to your pharmacy is divided into two parts: reach and acquisition. You reach patients through a marketing strategy that gets their attention, keeps your pharmacy top of mind, and drives traffic to your store. If you’re not already utilizing social media to attract new patients into your pharmacy, start by using one of these 20 social media prompts. Once you’ve reached potential patients, you can help them understand their options.

Engage

Engaging your patients is also divided into two parts. Once you’ve acquired a patient, you engage them through a conversion followed by a retention strategy. You’ve converted a patient when they purchase a product or service from your pharmacy, but the relationship should not stop there. Using an effective retention strategy, you can reactivate these patients to engage with your services again and again.

Delight

Delighting your patients is an important and often forgotten step in the patient lifecycle. When you set your pharmacy apart and delight your patients, they are more likely to return. They are also more likely to refer their friends and family to your pharmacy, bringing you new business without the added marketing dollars. You can go that extra mile through thank you cards, follow up phone calls, and leveraging data to predict their upcoming needs. You should also consider executing a loyalty program for returning patients.

The Power of Referrals

JD Power, a global leader in consumer insights, determined that 80% of patients will utilize a service if it’s recommended by their physician and 75% will utilize a service if it’s recommended by their friends and family. This means referrals have a lot of pull on your pharmacy’s reputation, profitability, and your role in the community.

If your pharmacy is not offering a service being actively recommended by physicians and other members of the community, then you are in a position to lose patients to your competition. This doesn’t mean you should offer every service available, but it does mean you need to consistently adapt your products and services to respond to the changing needs of your patient population.

Profitability

It is five times more expensive to acquire new patients than it is to retain existing ones and have them do the marketing legwork for you through referrals. You’ll also notice a higher success rate of 60 to 70% when selling to and through existing patients. Overall, extending your patient lifecycle can increase your profits anywhere from 25 to 95% while simultaneously expanding your client base.

Rate Your Pharmacy

Before you dive in to extending your patient lifecycle, you need to assess where your pharmacy is now. To do this, we use the traditional stoplight approach.

If your pharmacy is in the red, you are providing an inconsistent patient experience, your workflow is reactive or non-existent, your team is unaware of ancillary products or services, and you have little integration between departments. Don’t feel embarrassed or ashamed if your pharmacy is currently sitting in the red zone. In fact, our Chief Pharmacy Officer, Elaine Ladd, at one point started there too.

A pharmacy in the yellow has moved up from the red zone, but still has work to do. A yellow pharmacy has identified clear opportunities for improvement and implemented a manual process for follow-up and upselling. However, there is still limited integration between departments and workflow inefficiencies that continue to impact service delivery.

Your pharmacy has entered the green when you are leveraging data to inform and/or upsell patients and you provide a personalized and interactive level of patient care. Green pharmacies have a highly integrated workflow and consistently evaluate data to identify new opportunities and changes in the marketplace. This creates an excellent experience for your patients and gives them reason to keep coming back. Remember that even if you are in the green today, a lack of proper monitoring and tracking could put you in the red tomorrow, so be vigilant.

Get in the Green

If you suspect our pharmacy is in the red or yellow zones, we encourage you to reach out to us to perform a full assessment. We’ll connect you with a coach who can help you with goal-setting, developing effective strategies, and bringing your pharmacy into the green.