Friday, February 8, 2019

Purchasing and Inventory Management

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Purchasing and Inventory Management
Purchasing and Inventory Management

The purchase and inventory control of pharmaceuticals is a special and important phase of the operation of a successful hospital pharmacy. A portion of the purchases, controlled drugs, and alcohol, is rigidly controlled by Federal regulations which in reality provide the means for accurate purchase and inventory control. These two classes of products, however, constitute a relatively small portion of the overall purchases of an institutional pharmacy.

Therefore, the purchase and control of the largest segment of the inventory are left to the administrative staff of the hospital or its duly authorized delegates.


The word purchase, as defined in the dictionary, has numerous meanings, the most appropriate being—"to obtain by paying money or its equivalent; to buy for a price."


The hospital literature is replete with articles dealing with the question, "Should pharmaceutical and related products be purchased b the purchasing agent or the pharmacist?' One school believes that all institutional purchasing should be centralized under the aegis of the purchasing agent. According to this system the pharmacist, like all other department heads, requests, on a special form, the item to be purchased.

The selection of the brand and vendor is thereby left to the discretion of the purchasing agent unless the pharmacist has prepared a list of specifications which may or may not restrict the selection to the product of a particular manufacturer. This system has certain control and economic merits and can function within the hospital. It must, however, depend upon the close cooperation between the pharmacist and the purchasing agent. Each must be aware of the definite contribution which he can make to such a specialized purchase.

The other school believes that pharmaceuticals and related items constitute specialties that require the technical skills of a formally trained individual for their proper selection and purchase.' A leading advocate of this school was Dr. Malcolm T. MacEachern who stated:
•. the purchase of drugs and pharmaceuticals is a specialty that can b carried out to the best advantage by a pharmacist trained in managing a hospital pharmacy. ... This is the only department in the hospital in which it is usually not advisable to have purchasing done by a general purchasing agent."


The role of the purchasing agent in drug procurement may vary markedly from small to large hospitals. In the small hospital, the purchasing function may be a part-time one and may be handled by the administrator, all administrative assistant, or the storekeeper. This, therefore, means that lack of time or pressure from other duties will cause the Individual to restrict his activities in this function to a minimum. In a large hospital, where the purchasing function is of such magnitude that it is a full-time position for one or more individuals the purchasing agent may assume the following duties in relation to drug purchases:

1. issues purchase orders 

2. maintains purchase records 

3, follows-up on delayed orders 

4, initiates competitive bidding procedures 

5. obtains quotations front specified sources


Many administrators attempt to exercise a power of control over the volume of purchases by the pharmacist by placing a dollar limitation on the purchase order. This method is archaic and is easily circumvented by the issuance of multiple small orders which in the long run is more costly for the hospital. A more modern and reliable moan is the compulsion of inventory turnover: Inventory turnover is computed by dividing the cost of goods sold during the fiscal period by the average of opening and closing inventories. This gives the number of times the inventory has been turned during the fiscal period.' Low turnover indicates:

1. duplication of stock 

2. large purchases of slow-moving items 

3. dead inventory


Vendor Load Time (VLTJ

Safety Factor 
0 to 2 weeks ............ 
1.0 2 to 5 weeks ............ 
1.5 5 to 8 weeks ............ 
2.0 8 to 11 weeks ............ 
2.5 11 to 15 weeks ............ 

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