Pharmaceutical Software for Inventory Management: Why It’s Crucial?
In 2010, a prominent pharma company had to recall over 136 million bottles of its medicine due to contamination issues. The contamination was linked to poor inventory management practices, including inadequate storage conditions and lack of proper oversight. This recall cost the company hundreds of millions of dollars, and severely damaged its reputation.
In 2013, another pharmaceutical company faced severe consequences due to poor inventory management and quality control practices. In 2013, the U.S. Food and Drug Administration (FDA) banned the import of drugs from several of the company’s plants due to violations of good manufacturing practices.
The company had issues with maintaining proper inventory records, which led to the production and distribution of substandard medications. This resulted in significant financial losses and a major hit to the company’s credibility.
These examples highlight the critical importance of effective inventory management in the pharmaceutical industry to ensure product quality, regulatory compliance, and customer satisfaction.
But the question arises how to ensure error free inventory management? How to make sure that inventory is consumed before expiry, and there is no overstocking or dearth of stocks?
The answer lies in an inventory management software .
But wait! Not every inventory management software can do the job for pharma industry. Only some specific features and attributes make an inventory management software fit for the role.
Let us discuss key attributes and why those features are must have in an inventory management software for pharmaceutical industry.
Supplier management- Pharma companies must receive quality raw materials at minimum cost and in shortest lead-times. Therefore, they must have a pool of suppliers, their details, certifications, delivery performances, quality of materials, etc. stored for ready access.
An inventory management software must be capable enough to store these data and produce them with minimum efforts. It should even alert when a supplier certification is nearing expiry or has expired.
Multiple UOM- Pharmaceutical deals with numerous units of measure. Thus, the software must facilitate multiple Unit of Measure (UOM) in weight, volume and discrete. A formula might have combination of these.
The material might be stored in one unit and issued to production in another. So, the inventory management software even must facilitate their quick conversion from one unit to another without all the complex calculations.
Inventory movement- Whether inter-warehouse or intra-warehouse the inventory management software should have ability to track and make these movements smoother. There should be auto-update of inventory at both the ends to settle overall inventory levels. This facility of the software is necessary to keep inventory and their associated financial records clean and error -free.?
Visibility till bin location- A pharmaceutical inventory management software must provide visibility into warehouse down to its lot location. This facility enables organization to control inventory till the last corner, helping to utilize it fully and in time.?
Expiry/shelf-life management- The implications of pharmaceutical malfunctions extend beyond financial and reputational damage—they can pose serious risks to human life. This is why effective expiry and shelf-life management is critical.
The software must be intelligent enough to monitor and track the shelf life and expirations of materials as well as should send alerts for same to prevent any potential hazards.
Inventory classification- Inventory classification is crucial for an inventory management software.? It facilitates easy identification and grouping of materials for their better management and tracking. There are multiple classification types like ABC classification, item type classification, hazardous, allergen, etc.
Quality Control- Quality is a non-negotiable aspect of any business and when it comes to pharmaceutical business, it is above all.
The inventory management software must have facility to embed user defined QC on inventory through its journey along the supply chain. So, by applying quality checks on inward inventory, businesses can ensure that only the QC passed raw material enters production line.
Likewise, by applying QC on in-process and outbound inventory ensures that customers receive only the quality products at their end.
This ascertains efficacy of the product too.
Physical & Cycle Count- Inventory auditing is an essential part and a mandate too of inventory management. It updates the records of available inventory and clears the gap between system records and physical records.
Inventory management software must facilitate physical and cycle count. This process helps identifying issues such as theft, damage, or otherwise, early before any commitment.
Cycle count also helps keeping the organization external audit ready because in highly regulated industries like pharmaceuticals, physical count helps ensure that inventory records meet compliance mandates.? ?
Integration- Physical counting and registering the inventory on spreadsheets or paper pen method is tiresome and time consuming. Handheld RFID gadgets are a smart alternative to this error prone method. Inventory management software must be able to easily and seamlessly integrate with these devices to make the workflow smoother.
Inventory management software if integrated seamlessly with order management software or an ERP, can make the whole workflow faster. At any given time, salesperson would know available to promise stock, directly improving its commitment in the market.
An integration of the inventory management software with formula management software or a pharma ERP will help to calculate formula costs, helping organizations to perform what-if analysis, determine market viable cost of the product and find out profit/loss.
Reporting- Reporting, as in any other industry or department, is vital for making timely decisions or strategizing for future. Right information at the right time can be a game changer. Inventory manager can decide or propose new methodology, or future requirements based on these reports.
Inventory software, therefore, must be capable enough to provide various reports like stock level reports, batch tracking and lot traceability report, expiration date report, reorder point report, inventory valuation report, cycle count report and so on.
Besides proving a foundation to various key decisions, these reports are mandatory for various compliance also. Hence, reporting is a non-negotiable feature of any inventory management software for pharmaceutical industry.
Scalability- A pharmaceutical inventory management software must be able to scale up and provide shoulder-to-shoulder support to growing businesses. Scalability leverages the base data and eliminates the necessity of data transfer and saves time resources.
At the end:
The pharmaceutical sector is highly sensitive, making it essential to choose its technological partner with great care and precision. An inventory management software for pharmaceutical industry is a great tool, but an ERP software for Phama industry is better.
The later centralizes data of the whole organization and therefore there is no need of integration of various isolated software. The response time of whole system is very less, and accuracy is higher than the system of integrated software.
In this league, BatchMaster ERP for pharmaceutical is a prominent name. The software not only has a legacy of 40 years, but has an excellent implementation and service record.
It can easily integrate with modern technology and various financials like Tally, SAP Business One, Sage, QuickBooks etc. ?You can choose from on web, cloud and on-premises platfirms based on your business and financial needs.?
To explore other features and capabilities of BatchMaster ERP for Pharmaceutical Industry, visit BatchMaster or write us on [email protected] .