THE IMPACT OF INVENTORY CONTROL AND MANAGEMENT IN THE PHARMACEUTICAL INDUSTRIES (A CASE STUDY OF NICHBEN PHARMACEUTICAL INDUSTRIES LAGOS STATE

ABSTRACT

Inventory is the term used in pharmacy operations to describe the stock of pharmaceuticals kept on hand to satisfy potential demand. The biggest asset in a pharmacy business is inventory, and as pharmaceutical products get more expensive and varied, their worth is only increasing. Effective inventory management is crucial to pharmacy practice from both a financial and operational standpoint. The goal of inventory management is to have an efficient supply of goods to meet customer and prescriber demands while lowering procurement and carrying expenses. The research focuses on  The Impact Of Inventory Management In The Pharmaceutical Industries (A Case Study Of Nichben Pharmaceutical Industries). The study examines inventory management techniques used in pharmacy practice and highlights strategies for assessing the effectiveness of the process. The research describes the effects of improper inventory management and offers suggestions.

 

THE IMPACT OF INVENTORY CONTROL AND MANAGEMENT IN THE PHARMACEUTICAL INDUSTRIES (A CASE STUDY OF NICHBEN PHARMACEUTICAL INDUSTRIES LAGOS STATE

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In the treatment of patients, the pharmacy is essential. It focuses on making sure that the intended patient receives the prescribed prescription precisely and on time. Consequently, pharmacies need to buy, store, and distribute medications (Romero, 2013). One of the hospital’s most often utilized therapeutic areas is the pharmacy, which is also one of the few places where a significant sum of money is spent on purchasing pharmaceuticals. Inventory in pharmacy operations refers to the stock of medicinal products kept on hand to satisfy future demand (Dwivedi etc al 2012). Compared to the available resources, the cost of providing health care is rising disproportionately. In order to avoid both overstocking and understocking, the supply of medications must be effectively regulated. A supply chain’s ability to reduce inventory holding costs at each stage, including selection, quantification, purchase, storage, distribution, and use, depends on its ability to manage inventories effectively. In a medical facility, having excessive supplies of some goods might use up a significant percentage of the pharmaceutical budget, leaving little money for other crucial, potentially life-saving medications. In addition to holding costs, too much inventory can cause products to become outdated and limit an organization’s flexibility. Excess inventory in a medical facility could cause some medications to expire (Kagashe & Massawe, 2012).

In order to prevent both the usual course of medicine from running out of stock or going bad due to expiration, health facilities must effectively manage their stocks (Vishavdeep et al 2015).Inventory is the amount of products and supplies that a business or manufacturer has on hand to indicate those that are ready, able to be purchased, or in good shape. A collection of hardware- and software-based tools used to automate inventory tracking is known as an inventory management system. Virtually any form of quantifiable commodities, including computer equipment and other objects used by the company, can be included in the types of inventory maintained with an inventory control system. Using technology to track and manage inventory is the only foundation for contemporary inventory management systems.

Inventory control in healthcare facilities goes beyond just purchasing and using. By enabling healthcare organizations to effectively buy and store the precise amount of supplies required for patient care while addressing cost, tier pricing, and patient payments related to supplies, the correct controls and processes can reduce the cost of healthcare by millions of dollars. By maintaining precise records of all input, outflow, and movement of inventory (drugs) in a user-friendly environment, inventory management and control aids institutions in identifying, controlling, and managing their inventories.

As a result, inadequate inventory management causes pharmaceuticals to go out of date, lose quality as a result of improper storage practices, and the drug’s effectiveness suffers as a result. Some patients may even pass away as a result of this. Poor inventory control and management may result in stock outs and many other negative effects. In order to better understand how inventory (drugs) are managed and controlled.

1.2             STATEMENT OF THE PROBLEM

The foundation of pharmaceutical supply management is inventory management. Inadequate inventory controls can lead to both understocking and overstocking of goods. The associated expenses at various supply chain system stages can be significantly decreased with an efficient inventory management system. Achieving a fair balance between holding costs and purchasing and shortfall costs is one of the objectives of inventory management. For the overall management of the healthcare institution to be effective, proper stock management and drug control are essential. Ordering of stock, receiving and storing of stock in healthcare facilities, issuing of stock, and reordering of stock are only a few of the levels and components involved in stock management.

Nyabwanga (2013) stated that both excessive and inadequate inventories are not desirable because excess inventories results in high stockholding costs and reduces the firm’s profitability while inadequate inventories disrupt firms operations (Atrill, 2006). According to Ashok (2013) the adequate and timely flow of inventory is imperative for the success and growth of any firm. Therefore the problem confronting the research is to appraise the effect of role of inventory management and control in pharmaceutical industries in Nigeria.

1.3            OBJECTIVES OF THE STUDY

1. To ensure an effective and efficient management and control of inventory

(drugs)  leading to effective service delivery.

2. To reduce obsolescence and wastages of drugs.
3. To reduce out of stock syndrome prevalent in government hospitals.

1.4           RESEARCH QUESTIONS

1. To what extent has effective management and control of inventory aid in effective and efficient service delivery?
2. How far do effective inventory management reduce obsolescence and wastages of drugs experienced?
3. To what extent do good inventory management help in reducing out of stock syndrome prevalent in Pharmaceuticals in Nigeria?

 

1.5  HYPOTHESES

Ho: proper management and control of inventory does not have a significant effect on effective and efficient service delivery

Hi: Proper management and control of inventory has a significant effect on effective and efficient service delivery

1.6            SIGNIFICANCE OF THE STUDY

There are currently major concerns regarding Inventory Management  in the pharmacy department – when an order should be placed, and at what quantity. It is challenging to achieve drug procurement objectives with regards to costs, quantity, quality, and delivery. However, considering the hospitals‘ personnel and technology unavailability, the implementation of a successful patient care through an efficient inventory management could be problematic in the Abuja. Hence, this research will provide the needed empirical evidence for or otherwise of the above statement.

 

1.7           SCOPE OF THE STUDY

The management and control of inventories cover physical control, accounting control and management policies and procedures relating to inventory. The study sample selected for this study is Nishben Pharmaceutical Industries in Lagos State, and the study shall cover their ordering method, procurement method, storage and issue of drugs including the cold chain system and the inventory management and control techniques that aid in the achievement of the organizational goal.

1.8            LIMITATION OF THE STUDY

The absences of an existing body of study on this area in the institution posses a special problem of the absence of previous reference or primary data from the scratch through questionnaire administration and designed to supplement available secondary data. However, financial constraints are expected to present a very serious limitation to the study since it would limit the researcher’s data material and the presentation of existing evidence.

1.9              DEFINITION OF OPERATIONAL TERMS

INVENTORY: List of items contained in the stock. Refer to the list of stocks and the stock itself.

INVENTORYCONTROL: Activities or procedures used to ensure that the correct amount should be kept in stock.

 

 

INVENTORY MANAGEMENT: The official system designed by the management of a company to monitor control and manage the stock of inventories and assets under its possession.

STOCKS: All items or materials stored within the organization.

ITEM: One of the products kept in stock, is an input in inventory.

UNIT: Standard size or quantity of the items in the catalogue.

THE IMPACT OF INVENTORY CONTROL AND MANAGEMENT IN THE PHARMACEUTICAL INDUSTRIES (A CASE STUDY OF NICHBEN PHARMACEUTICAL INDUSTRIES LAGOS STATE