Inside this Blog:
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Community and independent pharmacies continue to struggle filling staff positions
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This creates a ripple effect where workload volume piles up even more for remaining staff, and pulls pharmacists away from patient care
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Pharmacies are increasingly turning to technology as a solution: not to replace people, but to automate administrative work and carve out time savings
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Relying on manual methods for pharmacy inventory management is time-consuming. Introducing pharmacy inventory automation makes inventory work faster, easier, and more accurate.
The pharmacy staffing shortage continues to grow, with little sign of stopping. The 2024 NCPA Digest found that 67 percent of community pharmacists reported having a hard time filling positions, with 76 percent reporting that the most difficult position to fill was pharmacy technician. As a recent Pharmacy Technician workforce study uncovered, technicians continue to leave the field, citing pay, lack of career opportunities, and feeling overwhelmed by workload and volume.
This creates a cycle where remaining staff feels even more overloaded, and pharmacists are forced to shift away from clinical responsibilities and take on operational tasks. As one pharmacy leader put it, “pharmacists want to provide clinical services,” but without reliable pharmacy technician support, many are pulled into duties like order entry, payment handling, and inventory management.
As this happens, pharmacists feel overwhelmed and stretched beyond capacity, and disheartened that all the time they’re spending isn’t on patient care, but on admin work.
While staffing shortages remain a larger issue, there is something independent and community pharmacies can do to lessen the load of administrative work for all staff members. A study published in the Journal of American Pharmacists Association found that implementing automation technologies significantly reduced the time pharmacists spent on routine tasks, allowing them to focus more on clinical activities and patient care.
Inventory automation technology also streamlines workflows for pharmacy technicians, making their tasks easier and more efficient, with no guesswork or wandering the shelves.
The High Cost of Manual Inventory Management
When a system or process is working well enough, it can be tough for pharmacy owners to want to make a big change—particularly if you’ve relied on that system for a long time. Yet the problems with these systems often remain hidden, as they’re easy to miss when you don’t have clear visibility.
If you’re still tracking stock with spreadsheets, clipboards, or a patchwork of outdated tools, you’re likely spending several hours per week on inventory. Pharmacists report spending, on average, at least one hour each day managing inventory: searching for needed items, price shopping, manually placing orders, verifying received orders, and restocking shelves. Then there’s the time your technicians and support staff are spending too.
This time costs money; the average hourly rate for pharmacists is $61.60 per hour. Time spent on inventory means time pulled away from patient care and other priority work.
You’re also likely bleeding revenue. Manual systems often lead to:
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Inaccurate counts that cause stockouts or overstocks
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Slow reordering processes that miss sales opportunities
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Lack of real-time visibility which hampers decision-making
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Employee frustration which contributes to burnout and turnover
Stockouts frustrate patients and can even endanger them. They can also drive away loyal patients who rely on the medication they need being in stock.
Conversely, overstocks and surplus leaves your cash flow tied up on your shelves, not turning over revenue, and making operations harder to sustain. In the worst-case scenario, surplus stock sits there, depreciating in value.
On top of that, the more your business grows, the more complex inventory management becomes. What worked at ten SKUs breaks at 1,000. What took an hour now takes far longer.
The Perpetual Method: Precise, Accurate, and Efficient
The next step up from a fully Manual Method for inventory management is the Periodic Method. With this method, staff use basic technology like barcode scanning to inspect inventory at specific time intervals. This could be weekly, monthly, quarterly, or even annually.
While this method is more systematic in nature, it still mostly relies on staff to make decisions based on their observations and experience. This makes it subjective and still error prone with staff hunting the shelves for products.
The most precise, accurate, and efficient method to date is the Perpetual Method, which measures inventory continuously in real-time through a computer system that automatically updates on-hand quantities upon delivery and dispensing.
This method also incorporates an automatic replenishment system that ensures drugs are identified for reorder once the stock level reaches or falls below a calculated replenishment point.
Because a perpetual inventory system can track all movement of products in and out of the pharmacy including sales, returns, and transfers, it dramatically increases accuracy and visibility.
How a Perpetual Inventory System Works
Perpetual inventory systems are used in many industries, but they are particularly transformative for pharmacies for two reasons: the high value of the drugs you sell and the risks of shortages and stockouts if inventory isn’t managed properly. They also help ensure you maintain accurate records of drug inventory levels at all times to comply with state and federal regulations.
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The first step in using a pharmacy perpetual inventory system is to input data about each drug into the system. This includies the drug’s name, manufacturer, strength, dosage form, and quantity of on-hands. The system will then use this information to track the drug’s inventory level and cost of goods sold.
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When a pharmacy receives a shipment of drugs, staff can either automatically receive the invoice from the wholesaler via Electronic Data Interchange (EDI), which will update their on-hands in the Pharmacy Management System (PSM), or scan product barcodes into the system. Either option allows for automatic updates to inventory levels and reorder point adjustments.
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If inventory levels for a particular drug fall below the reorder point, the system will generate a purchase order for that drug. The purchase order will be sent to the wholesaler or manufacturer, who will then ship the needed supplies to the pharmacy. Staff can also place orders via EDI or through the wholesalers’ ordering platform.
By automating the process of tracking inventory levels and generating purchase orders, perpetual inventory systems help to ensure that pharmacies always have the drugs you need on hand, while reducing surplus.
Automation Ups the Ante
Automation is what really drives perpetual inventory. Without it, it would be nearly impossible to maintain reorder points for thousands of drugs with fluctuating demands.
But when you also add in automation technology from a system like Datarithm, you can maintain accurate inventory with a high degree of precision. This is because it tracks your pharmacy’s inventory continuously and in real-time, so you maintain a dynamic picture of stock levels, replenishment schedules, and turn rates.
The level of precision that automation provides helps pharmacies avoid stock-outs, over-stocking, and elevated expired returns, while providing a stronger basis for inventory reports and decision-making.
When you always know where inventory is, you can make informed financial decisions, while also freeing up yourself, your pharmacists, and front-line techs to dedicate more time to serving patients’ needs.
Streamlined Workflows Make Technicians’ Jobs Easier and Faster
A pharmacy inventory system will also automate daily tasks and workflows for staff and technicians, so that when they log on in the morning, they see exactly what they need to do. This can include transfers and returns that help keep your inventory balanced and your cash flow freed up. It shortens the order cycle, simplifies ordering, and gives them time back in their day. This is valuable at any time of day, but it’s particularly valued by staff at the end of the day, when it’s time to place orders.
While you can still use your automated PO to place orders manually, you can also implement EDI to fully maximize your time savings. And if you, or anyone on your team is nervous about learning a new technology, partnering with Datarithm who provides hands-on, in-depth training and truly responsive support will help. By encouraging members of your technician team to lead the technology adoption, you also help them feel more engaged in their work, with an opportunity for growth.
As a result, your inventory is more accurate and balanced, the risk of stockouts is dramatically reduced, administrative inventory work is automated, streamlined, and more efficient, and your team has more time to breathe and to focus on critical patient care.
Get a Deeper Look
Download our full guide, Automate to Elevate: How Pharmacies are Using Technology to Overcome Staffing Shortages and Take Back Time, to explore the benefits in-depth. This guide includes practical steps to get started, and real-world examples of how pharmacies like yours are transforming their operations without burning out their teams.
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