Inventory Management

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Inventory Management

• A Snapshot in Time

• Cindy Jeter

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Presentation

• Timing
• Any omissions
• Every situation is different
• What is the right way?
• Facility differences

• Warning
• This presentation may contain some graphic
  materials that may not be suitable for all
  audience members.

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(No Transcript)
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To Manage Inventory

• You have to have a plan
• Inventory is ever changing
• You have to know your starting point

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Physical Inventory

• Common misconceptions
• 1. I will get in trouble if my inventory is too
  large.
• 2. If I do not buy but a bare minimum for the 4
  or 5 days leading up to the inventory, it will
  look better.
• 3. I will place a big order the day after
  inventory.
• 4. If I run the inventory down, there will not
  be as much to count and it will save time.
• 5. If I forget a few thingsit is really not a
  big dealthe inventory is just a guess anyway.
• 6. We have an inventory company come in so I
  really do not have to do anything.

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Why It Is So Important?

• Insurance purposes
• DEA, Joint Commission and State Regulatory
  Agencies
• Money sitting on the shelves
• This is your baby

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Hurricane Katrina

• Lessons learned
• 4 sites entire inventory lost
• DEA records lost
• Documentation lost
• All automation along with the ability to dial in
  to retrieve data lost
• All supplies, computers, hoods, everything else
  lost

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Physical Inventory

• Priceless

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Difficulties Post Katrina

• Insurance verification
• Drug Enforcement Agency (DEA) loss reports
• State regulations
• Disposal and waste

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Purpose of Physical Inventory

• One true count that can be referred to in order
  to verify the items you have in stock on a
  specific date.

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Debate

• Conducting your own inventory
• vs.
• An outside company

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Staff Count or Outside Company

• Considerations
• Outside Company
• 1. Count by NDC numbers, not names
• 2. Only aware of what they see
• 3. Very experienced
• 4. Cost
• Staff Count
• 1. Get everyone on same page
• 2. Test counts will be important
• 3. Less experience
• 4. Paying overtime
• Either way---they will look to you for guidance

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Time

• A little time now will save you hours later.
• Anything worth doing is worth doing right.
• It takes less time to do things right the first
  time than have to correct the mistakes later.

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Preparation

• One month prior
• Keep an inventory notebook (templates)
• Updates/verificationsReview sections
• Automation equipment
• Code carts
• Outside areas or clinics
• Open/Closed units
• Anesthesia trays all OR stock
• Brand to generic conversions
• Walk the floors

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Soap Box

• Joint Commission
• DEA
• State Board of Pharmacy
• are coming

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Prep Work

• Notification to staff cart pulls, IV batches,
  any areas that will be affected.
• Tidy up
• Verify that all outdates have been pulled
• Settle up all transactions
• Make section markers
• Clear your responsibilities to be able to
  concentrate on inventory.
• Credits returned to wholesaler

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The Correct Information

• Stock sheets
• 1. Most current sheet
• 2. Any item changes
• 3. Additions/Deletions
• 4. Correct count
• 5. Correct NDC numbers
• 6. Any items that have been changed
• from the original package size
  

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NDC Numbers

• Transposed digits
• NDC numbers reflecting full container
• Brand NDC numbers
• Compounded products

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Inventory Day

• Today is all about the counting!!

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Inventory Day

• Section marking
• Tour of sections
• Responsible party
• Arrive early
• Run reports
• Staff cooperation
• Test counts
• Not our inventory
• Already billed
• Todays order

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Test Counts

• Count as the inventory team does.
• Only count item in one section.
• Is it all one NDC number?
• Is it the same NDC number?
• Is it all in the same place?
• Am I missing overstock?
• Timing of test count.

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Test Count Sheet Sample
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Are We Done Yet?

• Final walk through with inventory leader
• Section by section recap
• Todays order not placed into inventory
• Any possibility of double counting

• All areas accounted for
• Special pricing and paperwork completed.

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Post Inventory

• Verification
• Correct counts
• Correct sections
• Everything included
• Package size
• Explanation
• Section variances
• Total variances

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A Time for Reflection

• Next inventory
• Corrections
• Obsolete inventory
• Obsolete supplies
• Recommendations to DOP/Clinical Manager

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Inventory Turns

• Definition- Inventory turns are the rate at which
  inventory is used. You can also describe
  inventory turns as the number of days it takes
  for the complete stock to be used. (Days Supply
  on Hand)
• How long the drug sits on your shelf.

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Calculating Inventory Turns

• Inventory Turn Rate
• Actual 12 month Pharmacy Purchases
• divided by
• Current Physical Inventory

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Obsolete Inventory

• Reasons for obsolete inventory
• Formulary osmosis
• Replacement-a-tosis
• Combination-a-tosis
• Out-date-it is
• Maybe-it is
• Used-to-be itis

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• Financial
• Management

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Purchase Logs

• Invoices from wholesaler
• Direct purchase invoices
• Track departmental charges or central
  supplies invoices
• Pending invoices
• Pending credits
• Monthly budget
• Patient day data

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What is Your Goal

• Plan of Action
• Realistic
• Baby steps
• Bite size pieces

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Automated Dispensing Cabinets

• Inventory addition
• Obese shelves
• Rotating stockoutdates never used
• Were OUT!!!

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Inventory Control Methods

• 80/20 reports
• Velocity indicators
• Par levels
• Min/Max orders
• Specific order days
• Walking the shelves
• Perpetual inventory

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Answers

• Who knows the answer
• Spending trends?
• What happened to the budget?
• Where did that number come from?
• How much was spent on non-formulary items?
• National shortage additional expenses

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Buyer Development Process

• Part of the management team
• Show initiative
• Dr Phil says, You show people how to
• treat you.
• Clinical Managers best friend
• Present your plando not wait for the DOP to
  present the plan to you.

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Questions