Developing Effective Pharmacy Inventory Management for Pattaya City Hospital

Abstract

Objective: To develop an effective pharmacy inventory management system for Pattaya City Hospital. Methods: This descriptive study focused on three distinct medication groups with three drug items in each group including 1) the group with high value of drug use (Group A in the ABC classification) and with high therapeutic importance (Group V in the VEN classification), also known as AV; 2) the group with high consumption rates; and 3) frequently stock-out medicines. The research involveก a simulation of management with minimum stock levels required to replenish the pharmacy inventory. Key parameters in the simulation were lead time, drug consumption forecasted from simple moving average of consumption in the past 3 months, and service level or the ability to dispense medicines in full amount as requested. The researcher collected drug cost, actual drug consumption, and the forecast value of the average monthly drug consumption using the data from the past 3 fiscal years. The evaluation of inventory management efficiency comprised three aspects including average monthly inventory value, inventory turnover rate, and service level. Results: Compared to the present practice of inventory management, the model with the application of the simple moving average forecasting technique, coupled with the set of minimum stock, a 0.5-month lead time and a 100% service level, proved most effective for all three medication groups. This strategy yielded optimal efficiency indicators across the three aspects. The average monthly inventory value witnessed a reduction of 8.6% to 24.5%, while the inventory turnover rate surged by 9.4% to 32.8% for all three drug groups. However, for frequently stock-out medicines, a 0.5-month lead time resulted in an inadequate minimum stock level, leading to the drop in service levels to 97.22%. Conclusion: Implementing a continuous review policy alongside the simple moving average with a lead time of 0.5 months was found to be suitable for AV medicines, high-volume medicines, and frequently stock-out medicines. This strategy significantly enhanced efficiency indicators for inventory management, reducing average inventory values and increasing inventory turnover rates, while guaranteeing a 100% service level for AV and high-volume drugs. Nevertheless, service level was lowered for frequently stock-out medicines, and pharmacists are encouraged to incorporate historical maximum demand data when determining appropriate minimum and maximum stock levels.