How to nail inventory management software in the pharmaceutical industry?

How to nail inventory management software in the pharmaceutical industry?

For many Pharma companies, inventory represents the largest single investment of their total assets. Here’s why:

Inventory itself is expensive. To hold inventory, companies need to pay for storage, security, picking and handling, insurance, and so on and so forth. Thus, measuring and controlling investment in your inventory is of the utmost importance for achieving profitable operations.

Pharmaceutical companies, and particularly bio-pharmaceutical companies, have much higher inventories than companies in other industries. Financial analysts track inventory turnover to assess company health and they found that Pharma companies’ yearly inventory turnover is often below 2, and can fall as low as 1 (which means that the company holds a year’s worth of sales in its stock). This is both highly expensive and inefficient.

The main reasons for low turnover in the Pharma industry are:

  • Demand growth predictions are often inaccurate
  • Lack of education of patients and physicians: sometimes they just don’t know much about new treatments.
  • Patent expiration: patent protection ends after 20 years so pharmaceutical companies need to maximize sales in that time. If the fill rate falls below 100%, lost sales are incurred which the company can’t get back.
  • Manufacturing regulations and complexity: Bio-pharmaceutical manufacturing processes are extremely complex and fragile. Small variations, interruptions, and alterations in the process can affect the production results to the point where a whole batch might become useless. To buffer against the possible impacts from manufacturing variations, additional inventory is held.

Inventory management software which means you can easily manage your products, whether you have one Stock Keeping Unit (SKU) or thousands. Clearing your inventory doesn’t have to be the headache it once was.

Cloud based inventory management software allow Pharma manufacturers to gather accurate data from their vendors and marketers, hence increasing their understanding of what’s going on in the channel.

Using this kind of data-informed technological infrastructure, pharmaceutical companies gain important market wisdom which empower them as strategists, enabling them to determine the products, campaigns, rewards and communication methods that truly drive engagement and ROI.

Inventory management software also means that your manufacturing company can clear inventories of generic and patented drugs by incentivizing marketer and store-based promotions. Inventory management software automates the inventory control process, making clearance less of a drag and more of a pleasure, for you and your channel partners. You gain insights and visibility into channel activity, reduce excess inventory and increase sales, while your partners gain rewards and improve their commercial condition.