Perpetual Inventory

A pharmacy perpetual inventory system is a computerized inventory management system that helps pharmacies monitor stock levels, track sales and purchases, and generate reports. 

This type of system automatically updates on-hand quantities upon delivery and dispensing and incorporates an automatic replenishment system that ensures drugs are identified for reorder once the stock level reaches or falls below a calculated replenishment point. 

This can be done through real-time data entry or by scanning barcodes on products as they are sold. Perpetual inventory systems can also help pharmacies manage orders and reduce the risk of errors. If you manage a network of independent pharmacies, perpetual inventory will give you a live look at each pharmacy’s inventory in one place. 

A perpetual inventory system is designed to track inventory levels on a continual basis in real-time. This means that every time a product is sold, the inventory records are updated accordingly—enabling you to always know which medications and products are on-hand. Perpetual Inventory offers the most precise and accurate way for pharmacies to manage their stock levels, reducing time spent on ordering, making shrink easy to spot, ensuring financial conditions are readily available, and enabling easier strategic decision-making. 

A periodic inventory system, on the other hand, does not track inventory levels continuously. Instead, you use basic technology like barcode scanning to inspect inventory at specific time intervals—weekly, monthly, or annually. This data is then used to update the inventory records. While this method is more systematic in nature than the Visual Method, it still mostly relies on staff to make decisions based upon their observations and experience, which can be subjective and error prone. 

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 with Datarithm’s automation technology in play, 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 at, 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. 

There are a few steps to take to set yourself up for success with a perpetual inventory method. Start by conducting a physical inventory which will ensure your on-hands are accurate. Then, you will: 

• Set and maintain re-order points (Mins/OP’s) and reorder quantities (Max/OQ’s) for all items in the formulary, while recognizing generically equivalent groups and constant changes in dispense volume. Whether you are placing orders manually or leveraging EDI (Electronic Data Interchange) ordering, these order points are critical, as they determine how much product you should order and when you should order it.  

•  Establish “preferred” items in generic groups. 

• Adjust on-hands for all dispense and replenishment events. Place orders when on-hands are less than or equal to the Min/OP. This can be done manually, when notified through Datarithm’s automated alerts, or through EDI. 

When you partner with Datarithm, you’re not alone in figuring out PI on your own. Just like you, we believe that personalized support and care make a difference. We pair the power of our platform with a prescriptive process, daily insights, hands-on training, and personalized guidance—so from the moment you start, you have our support. 

One of the great benefits to using PI is that it streamlines and automates much of the inventory process for you, making it easier to maintain. That said, there are some key steps you should take to ensure the process is working effectively for your pharmacy over time and delivering the results you’re after.  

• Train staff well and make sure they follow the Daily Action Plan: With Datarithm, you benefit from taking the guesswork off your shelves. Your staff can simply log on each day and see the work that’s there for them to do. We take managers and staff through hands-on training, so everyone is crystal clear on how the system works and how to carry out their tasks, such as returns and transfers. These tasks keep the system running and your cash flow flowing. 

• Know your patients, monitor changes, and adjust regularly: Demand for different drugs changes for different reasons: if a new generic comes out that reduces demand for the name brand, or because of patient aging, or simply seasonality. Just as important as it is not to overstock, it’s crucial to ensure you always have the medications that your patients have come to rely on you for on-hand. Otherwise, you risk their health and their business. Datarithm®’s cloud-based software uses algorithms that forecast demand, recognize trends, and automatically resets reorder points accordingly, while customizable reports put real-time and historical data at your fingertips.  

A perpetual inventory system provides real-time medication and expiration date tracking, precise and accurate data, reports, records, and audit trails, which are all essential for ensuring compliance with a variety of pharmacy regulations.

Effectively using PI to manage pharmacy inventory can help make it simpler for pharmacies to meet requirements related to controlled substances, expiration management, stock accountability, and accurate reporting, ultimately reducing the risk of compliance violations. Datarithm’s software also streamlines documentation processes, ensuring users easily maintain and store accurate records, which is helpful during audits and regulatory inspections.  

When evaluating different software systems that implement a PI system, several important considerations must be remembered. First and foremost, you need to assess whether the system can meet the specific needs of your pharmacy. Every pharmacy is unique, so it's crucial that the software can be customized to fit your requirements. Security, reliability, and cost-effectiveness are important as well. That said, there are key features to look for when considering the best pharmacy inventory software. These include: 

• Automatic Reordering and Restocking 

• Customizable Reporting and Analytics 

• User-Friendly Interface and Training Support 

• Mobile Accessibility and Remote Management