The document provides a comprehensive overview of hospital and clinical pharmacy supply chain management, focusing on inventory control techniques such as ABC analysis, VED analysis, and various inventory management methods like FIFO and FEFO. It discusses the classification of drugs based on cost and importance to optimize drug supply, storage, and minimize wastage. Furthermore, it outlines the disposal methods for expired pharmaceuticals to prevent public health risks and environmental contamination.

1. HOSPITALAND CLINICAL PHARMACY
SUPPLY CHAIN AND INVENTORY CONTROL
PART –II
D. Pharm 2nd year
E.R.20
PRESENTED BY
PRAGATI K. MAHAJAN
PREPARATION DATE
SEPTEMBER -2023

2. Continuation Of Part -I

3. INVENTORY CONTROL
DEFINITION :- It is the balance between not ordering too much and
avoiding stockout situation of material
OBJECTIVES
 To supply drugs in time
 Efforts are made to procure drugs at minimum price without
bargaining the quality.
 To avoid stock out situation
 Wastages are avoided.

4. Techniques Of Inventory Control
1. ABC analysis
2. VED analysis
3. ABC-VED Matrix
Analysis
4. Inventory turnover
5. FEFO, FIFO method
6. Periodic inventory control
7. Perpetual inventory control
8. EOQ
9. Reorder quantity
10. Lead time
11. Buffer stock

5. ABC Analysis
 It is an inventory categorization method based on the cost of drug, quantity
and consumption of drug.
 According to this analysis, inventory is classified into, i. A class ii. B class
iii. C
 class "A" class:-
 These items are about 10% of the total items in number but form nearly
70% of the total cost of the items.
 A-items need tight inventory control which require more experienced
management.
 Re-orders should be more frequent

6. ABC Analysis
 "B" class:-
 These items are about 20% of the total items in number but form
nearly 20% of the total cost of the items.
 B-items require moderate attention for control
 "C" class:-
 These items are about 70% of the total items in number but form
nearly 10% of the total cost of the items.
 C-items need less attention and may be kept under simple
observation. Re-ordering is less frequent.

7. ABC Analysis
Category Cost Quantity Consumption
Type-A High 10% 70%
Type-B Neither high cost nor cheap 20% 20%
Type-c Cheap 70% 10%

8. ABC Analysis
 Advantages of ABC Analysis
1.It helps in strict control on such items, which are having a big investment.
2. Helps to point out outdated stocks easily.
3. It helps in the maintenance of high inventory turnover rate.
4. It reduces the inventory carrying cost.
 Disadvantages of ABC Analysis
1.Considers only cost of items & neglects the importance of items.
2. It does not categorize the items based on their critical needs, hence sometimes the
purpose of ABC categorization may be defeated.

9. VED Analysis
 It is based on the importance of the item and its effect on the functioning and
efficiency of a hospital.
 In VED analysis of drug. V-Vital drugs E- Essential drugs D-Desirable drugs
 Vital (V): The medicines that are basically required for the survival of the patients,
which must be available in the hospital all the times.
 Essential (E): Essential drugs whose shortage or non-availability managed for a short
time and if their shortage continues for anything more than the shortest time, the
working would be affected seriously.
 Desirable (D): Desirable drugs whose shortage would not influence the routine
functioning of an organisation even if the shortage is for a long.

10. ABC-VED matrix.
 VED analysis to the ideal control technique for the vital or essential category drugs.
But desirable category drugs are also contained in class "A" of ABC classification. So,
it cannot b ignoring the desirable category totally.
 Hence a matrix is framed by combining ABC and VED analysis known as ABC-VED
matrix.
 In ABC-VED matrix, ABC analysis (based on cost) is combined with VED analysis
(depend a the importance of an item) to reduce the group of medicines requiring
greater managerial supervision.

11. ABC-VED matrix.
 Category I (AV, BV, CV, AE, AD) is high priority group, requires greatest
consideration. It contains all the vital and expensive items, whose shortage may
adversely affect the functioning of the hospital or whose over stocking may lead to
financial loss to the hospital.
 Category II (BE, CE, BD) is under moderate management and moderate
consideration is devoted. Here items are essential but are less costly and can have
lesser stringent controls.
 Category III (CD) is under simple management and gets loose attention. Here things
are the stores and medicines which are desirable but would not affect the functioning
of the hospital even if they are not available for a long time

12. ABC-VED matrix.
V E D Based on ABC-VED matrix,
inventories can be
categorized into 3 groups
A AV AE AD Category I
B BV BE BD Category II
C CV CE CD Category III

13. Inventory Turnover
 Inventory turnover is the rate at which a hospital replaces inventory in a given period
due to sales .
 The inventory turnover ratio equation is the cost of goods sold divided by the average
inventory for the similar period.
Inventory Turnover = Cost of Goods Sold / Average Inventories
 The department expects to maximize the inventory turnover ratio as it will deduct the
storage cost, holding cost, and increase sales.

14. FEFO (First Expiry First Out) and FIFO
(First In First Out) method
 This technique is utilized for stock management. In order to avoid accumulation of
expired and old stock items should be stores and issued in FEFO or FIFO basis.
 The stock control system records the expiry date and date of receipt.
 Stock must be stored so that earliest expiring or first delivered batches can be
selected and issued.
 FEFO, is an inventory management technique that permits for products with
the earliest expiration date to be distributed first.
 FIFO principle generally have an arrangement of showing and selling older stock
prior to selling recently obtained stock.

15. FEFO And FIFO Method
 By rotating stock in this way, less inventory waste. Recently received stock at the back of the
shelf or behind the existing stock.
 For items that come in later but will expire first, usually the FEFO system is used.
 Recently arrived inventory sometimes has an earlier expiry date than a previously received
batch of same item. This adjustment is important with item that have short shelf life like
vaccines.
 Importance of FEFO and FIFO:
1.Enable effective traceability procedures
2. Minimize risk for expired drug
3. Plan for systematic recall measures
4. Monitor the whole supply chain

16. Periodic Inventory Control
 Inventory levels are manually checked.
 Pharmacist should review the stock and remove the articles which
have not moved since the last inventory
 Remove stock which has been purchased during year but has not
moved noticeably during the three preceding months.
 These items should be removed and returned for receiving credit if
possible.
 Once this is achieved, inventory recorded on the inventory sheet.

17. Perpetual Inventory Control
 Pharmacist maintains the running balance of the entire drugs in stock.
 It is an ideal method, provided the record keeping can be maintained up to
date.
 At the end of each day, pharmacist summarizes all the drugs charge slips and
makes the appropriate postings in the perpetual inventory file.
 This will occur whenever the drug order of the patient is processed. The
quantities of all drugs leaving the pharmacy are subtracted from the inventory
balance.
 Once stock reached up to the reorder level, purchase procedure started for the
items to be purchased

19. Economic Order Quantity (EOQ)
 It is the quantity of item at which ordering or manufactured cost & carrying cost
will be minimum.
 The ordering cost is the cost of paper work involved in the placing order,
telephoning and labour cost.
 The carrying cost is the cost of carrying and holding the items like transportation
cost, rent of storage, insurance cost, taxes, salaries of store keeper, losses in store
etc.
 This technique is used to find out how much quantity is to be manufactured or
purchases.

20. Economic Order Quantity (EOQ)
 EOQ can be determined by following formula
EOQ = √2ab/cs
where, a annul consumption
b=buying cost
c=cost per unit
s-storage &carrying cost

21. Devices Used For Cold Storage
 Refrigerator
 ILR ( Ice-Lined refrigerators)
 Walk in cold Room

22. Lead time, Buffer stock
Re-order level quantity
 Lead time:- It is the time taken between placing order and receipt of drugs to the
department. Longer lead time requires larger storage of drugs stock in hospital.
 Buffer stock :-It is the minimum quantity of a specific item which must be kept in the
stores at all times.
 Re-order quantity :- It is the quantity at which additional stock purchase or manufacture
for consumption. It maintains buffer stock otherwise there will be stock out situation.
 It has to consider time between placing order & receiving goods.
 For re-ordering attention must be given to unavoidable large consumption & expiry date
of product.

23. Refrigerator
o It is the equipment to assure
specific medicines are safely
kept within a narrow
temperature efficiency is
maintained.
o It comprising of a thermally
protected compartment.
o The range ally between -2°C
and -8°C
o Medicines stored in refrigerator
include vaccines, insulin
chemotherapy drugs, topical
preparations, eye drops, insulin,
glucagon etc.

24. ILR (Ice-lined
refrigerators)
This device has a lining of ice packs hence the
name lce lined refrigerator.
They are mostly used in the vaccine cold chain
It has an internal lining of ice, cold water-filled
compartments. If the electricity supply fails.
then the ice lining keeps the inside temperature
of the refrigerator at a safe level for vaccines.
Temperature :-2°C to 8°C
Additionally, an ILR has a top-opening lid which
prevents loss of cold air during door opening.
Therefore, the temperature is kept up with in
ILR for much longer span than in deep freezers.

25. Walk in Cold Room
• Walk-In Cold Rooms ensure the
temperature is constant & within
range in all over the room.
• Walk in Cold Room and Cold
Storage are designed for exact
observing of temperature
conditions required for cold storage.
• Temperatures between 0°C to 25°C.
• It maintains precise temperature for
long term cold storage
• Storage up to 3 months

26. Expiry Drug Removal ,Handling And
Disposal Method
 Pharmaceutical waste:-Expired or unwanted medicines that should never be used
 Example:- all cold chain damaged unexpired medicines ,all expired medicines ,all
bulk or loose tablets and capsules ,all unsealed tubes of creams, ointments, etc.
(expired or unexpired),all unsealed syrups or eye drops (expired or unexpired)
 Most expired medicines become less effective and few might be poisonous, but
the defective disposal of them poses serious hazard to the public health.
 Following steps require to be taken when disposing of unwanted pharmaceuticals,
 1. Sorting of pharmaceuticals
 2. Disposal

27. Sorting Of Expired Pharmaceuticals
 The main purpose of sorting is to distribute the drugs into separate categories
for which different removal techniques are used. based on active ingredients or
based on dosage forms.
 Sorted by active ingredient :-antineoplastics, antiseptics and disinfectants, anti-
infective drugs controlled drugs e.g., narcotics, psychotropic substances
 Sorted by dosage form (all other pharmaceuticals);solids, semi-solids and
powders ,aerosol containers with propellant and inhalers, liquids, solutions,
suspensions, syrups etc. tablets, capsules, granules, powders for injection,
mixtures, creams, suppositories etc.

28. Disposal methods
RETURNING TO THE MANUFACTURER
LANDFILL
ENCAPSULATION
INERTISATION
BURNING IN OPEN CONTAINER
INCINERATION
CHEMICAL DECOMPOSITION

29. Returning To The Manufacturer, Landfill
 Returning To The Manufacturer:
 This should be the first choice because the manufacturer is likely to have
good disposal strategy available at its.
 Landfill:
 The waste substances are directly placed into a land discarding site without
prior treatment. This is the oldest and most accepted method for solid waste
disposal.
 Untreated waste must be rapidly covered with other municipal waste to
prevent scavenging.
 Care should also be taken to avoid contamination of ground water.

30. Waste Immobilisation (Encapsulation)
 Waste immobilisation (encapsulation):
 Encapsulation includes immobilizing the drugs in a solid block
inside a plastic or steel drum.
 They are entirely filled to 75% capacity with solid and semi-
solid drugs, and the additional space is filled by a medium such
as cement or cement & lime mixture, plastic foam or bituminous
sand.
 Once the drums are filled to 75% capacity, the mixture of
cement, lime and water in the proportions 15:15:5 is added and
the drum fully filled.
 The sealed drums should be keep at the bottom of a landfill and
covered with fresh municipal solid waste.

31. Waste Immobilisation (Inertisation)
 Waste immobilisation (inertisation):
 Inertisation method includes the drugs are
removed from the package like removing pills
from blister.
 The medicines are then ground and a mixture
of cement, lime and water added to form a
homogenous paste.
 The paste is transported in the liquid form by
truck to a landfill and emptied into the normal
urban waste.

32. Sewer, Burning In Open Containers
 Sewer:
 After dilution Some liquid drugs like syrups, I.V. fluids can be flushed into sewer .
 Small amounts of liquid medicines like antiseptics can be disposed of very much
diluted prior to flushing.
 Burning in open containers:
 Burning of medications in open containers at low temperature may cause release of
poisonous contamination to the environment.
 It is strongly recommended that very small quantities of waste drugs can be disposed
by this method.

33. Incineration, Chemical decomposition
 Incineration:
 Medium (800-1000°C) and high temperature above 1000°C incineration devices
require a capital investment, operation and maintenance budget.
 Large amount of medications can be disposed of within a short period of time but
incineration method is recommended only when unconditionally essential.
 Chemical decomposition:
 As the technique is tedious and time consuming, it is useful only for small
quantities of drugs when suitable incineration technique is not available.
 This method is not suggested unless chemical expertise is readily available.

34. Retail Practice
 when it is not possible to return the expired medicines to the supplier, they
should be keep separately in cupboard or rack or any other assigned area with
adequate marking "expired good-not for sale".
 The following procedure is recommended:
 Cutting the package in such manner that the label is also cut.
 Tablets and capsules can be destroyed in a bucket of water.
 Utilizing landfill methodology according to medical waste disposal method.
 Pouring the liquids into the sink and flush with adequate water.
 Maintaining a record of all such disposal with full details of drugs destroyed.

35. Disposal Of Narcotic Drugs (Controlled
Substances)
 DISPOSAL OF NARCOTIC DRUGS (CONTROLLED SUBSTANCES)
 Controlled substances must be demolished under the direction of a pharmacist or
the police depending on national guidelines.
 Such substances should not be permitted in public places as they may be
abused.
 They should either be delivered unusable, by encapsulation or inertisation, and
afterward dispersed among the municipal solid waste in a landfill, or incinerated.
 Narcotic drug disposal Methods:1. Waste encapsulation 2. waste inertisation 3.
incineration

36. Disposal Of Cytotoxic Drugs
 DISPOSAL OF CYTOTOXIC DRUGS
 cytotoxic drugs, have the ability to kill or stop development of living cells. In
any case, if released into the environment they can have a serious effect, such
as interfering with reproductive processes in different life forms.
 Therefore, their disposal must be handled with care. Antineoplastics should
be isolated from other drugs and kept separately in clearly marked containers
with rigid walls.
 Antineoplastic drug disposal Methods; 1. Return to supplier 2. Incineration
(High temperature) 3. Waste encapsulation

37. Consequences Of Improper Disposal Or
Non-disposal
 Inappropriate disposal of expired drugs may cause serious health risk to
the public or environment.
 Pilfering from a store of waste drugs may result in expired medicines
being forwarded to the market for misuse and resale.
 If a landfill is insecure, expired medicines might come under the hands
of scavengers and children.
 Possibility of contaminating drinking water source from the disposal
place.

38. Consequences Of Improper Disposal Or
Non-disposal
 Disposal of non-biodegradable anti-neoplastics, antibiotics and
disinfectants into the sewage system may kill microorganisms essential
for the treatment of sewage.
 Flushing of anti-neoplastics into water supply may harm aquatic life or
contaminate drinking water.
 Burning of the expired drugs at low temperature or in open containers
consequences in release of harmful pollutants to the air.

39. Thank you