Pharmacist: Key Concepts and Principles in SCM

Supply Chain Management (SCM) is the handing of flow of goods and material from point of origin to point of consumption, with the objective to ensure that the supplies are present for utilization without any interruption. It covers everything from procurement and sourcing of raw materials to delivery of final product to the consumer, along with the related logistics. It will also include the related information systems that enable monitoring and exchange of information.

Effective SCM ensures the following:

• Continuous availability of quality-assured medicines/ products at the right time and at all healthcare levels.
• Minimizes wastage by preventing expiry of drugs at all levels, maintenance of adequate stock levels and accurate records.
• Maximizes patient care by coordination in all departments and by minimizing human errors/ medication errors.
• Economically viable by minimizing monetary loss (e.g., through pilferage) and optimizing cost via bulk purchasing or according to consumption needs.

Robust supply chain management systems have two main components:

1. Physical flow: Involved the movement and storage of supplies
2. Information flow: Allows the various stakeholders to coordinate and control the flow of supplies

Resources

• NTEP Training Modules 1-4 for Programme Managers & Medical Officers, 2020.
• NTEP Training Modules 5-9 for Programme Managers & Medical Officers, 2020.
• Guidelines for Programmatic Management of Drug-resistant TB, 2021.

Assessment

Under the National TB Elimination Programme (NTEP), the anti-TB drugs are procured at the centre level by the Central TB Division (CTD), Ministry of Health and Family Welfare (MoHFW), and supplied to the central warehouses.

From the central level warehouses, the drugs are supplied to different State Drug Stores (SDS) and further distributed to District Drug Stores (DDS) and sub-district level (TB Unit (TU) Store and Peripheral Health Institute (PHI)).

This movement of drug flow is monitored in real-time through Ni-kshay Aushadhi.

Figure: Flowchart Showing the Overview of Distribution of Drugs

Abbr: CMSS: Central Medical Services Society; GDF: Global Drug Facility; CTD: Central TB Division; GMSD: Government Medical Store Depot; SDS: State Drug Store; DDS: District Drug Store; TU: TB Unit; PHC: Primary Health Centre; PHI: Peripheral Health Institute.

Resources

• Standard Operating Procedure Manual Procurement & Supply Chain Management, CTD, MoHFW, India, 2018.
• Procurement, Supply Chain Management & Preventive Maintenance, Module 6, CTD, MoHFW, India.

Various stocks are maintained at different levels. To facilitate the monitoring of the quantity of these stocks, these are classified as follows:

1. Active Stock: It refers to those stocks which have passed all quality parameters and those which are ready to use/ dispatch for consumption. This is the heart of a warehouse and mostly uses the major chunk of storage. The First Expiry First Out (FEFO) principle will apply to this section of the drug stock.
2. Quarantine Stock: The stock which is pending for quality testing or not yet prepared for active usage is called quarantine medicines. This stock is kept in a separate area that is called the quarantine area and is not to be disbursed for usage until they are declared as active stock.
3. Safety Stock: Buffer stock or safety stock is the amount of stock or medicine set aside to meet the requirements of the facility/ store at the time of an emergency like unforeseen demand or depleting stock. However, this stock should be frequently checked for expiry and replenished at right time to prevent its expiry.
4. Damaged Stock: The medicines or stocks which are found damaged during the delivery at a particular facility/ warehouse in terms of packaging/ leakage/ broken, are to be identified and kept separately as damaged stock. The idea is to return them to the supplier with the proper Damage Stock Report Form. The pharmacist needs to mark such damaged stock in the delivery challan at the time of the receipt.
5. Substandard Stock: Substandard medicines/ items are products that do not meet the quality standards and specifications. These items should be kept separately to avoid their use. These stocks need to be reported to the parent store. As per the directions, these stocks either need to be returned to the supplier or disposed of in accordance with the biomedical waste management guidelines.
6. Lost in Transit Stock: It refers to the stock which is either misplaced/ lost during transportation. The pharmacist needs to report such stock in the delivery challan at the time of the receipt and the same needs to be reported to the supplying store immediately.
7. Expired Stock: Ideally, the warehouse should not have an expired medicine/ item if a proper FEFO mechanism is adopted for dispatch. However, in certain situations, drugs/ items may get expired and may not be suitable for usage as recommended by the manufacturer. Such stock is called Expired Stock. These expired drugs/ items need to be kept separately in a demarcated area and are labelled as expired drugs/ items and are to be disposed of, in accordance with the prevailing biomedical waste disposal guidelines after obtaining necessary approvals.

Resources

• Operational Guidelines for TB Services at Health & Wellness Centres, MoHFW, GoI, 2020.

Assessment

Minimum Stock

 A minimum stock level is a threshold value that indicates the level below which actual medicine stock should not normally be allowed to fall.

In other words, a minimum stock level is a minimum quantity of a particular drug/ medicine that must be kept at all times.

The main factors to consider when fixing the minimum stock level are:

• Average consumption
• Time needed to procure/ receive from supplies/ reporting facility, i.e., Lead time
• Reorder level (a fixed stock level between the maximum and minimum stock levels, at which a request for supply will be placed)

The minimum stock level can be calculated by applying the following formula:

Minimum Stock Level = Reorder level - (Average consumption per time period under consideration x Time taken for delivery)

(time period may be day/ week/ month/ quarter)

Maximum Stock

A maximum stock level is the upper limit of stock that should not be exceeded under normal circumstances without the prior agreement of the management.

The aim of setting a maximum stock level is to maintain the inventory level at the warehouse.

The main factors to consider when fixing the maximum stock level are:

• Average consumption
• Availability of storage space
• Economic order quantity
• Time needed to procure/ receive from supplies/ reporting facility
• Cost of carrying inventory or cost of storage

The maximum stock level can be calculated by applying the following formula:

Maximum Stock Level = Reorder level + Reorder quantity - (Minimum consumption per time period under consideration x Minimum time taken for delivery)

Figure: Stock Re-ordering Level; Source: Inventory Management.

Resources

• Maximum STock Level in Inventory Management, Interlake Mecalux.
• Inventory Management.

Assessment

The principle of First-Expired, First-Out (FEFO) means that the drugs which are due to expire first, are to be issued first. 

The FEFO principle ensures that the product with the shortest expiry date is utilised at the earliest within its shelf-life. 

Following the FEFO principles, the stocks need to be placed/ arranged/ stacked in a sequential manner. 

Steps Followed for Implementing FEFO

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1. Check Expiry Date
   • The expiry date of the stock need to be checked at the time of receipt of supplies with the release order/issue voucher. 
   • The ‘Expiry Dates’ should be marked in bold letters, 3” to 4” in size, on the drug cartons with a marker pen, for easy identification and control of drugs immediately on their arrival.
   • The pharmacist need to record for expiry date of the stock in the Ni-kshay Aushadhi or in stock register.
      
2. Storing Supplies with Different Dates of Manufacture and Expiry in Different Batches
   • Different batches of supplies with different dates of manufacture and expiry should be stored separately.
   • Supplies that are past their date of expiry should never be stored with the items which are still being used and the storekeeper should ensure that there is no stocking of supplies beyond their date of expiry.
      
3. Checking the Utilisation Pattern Before Issuing Drugs
   • The storekeeper should strictly follow FEFO principles to ensure that all short-expiry drugs should be distributed to  the State/ District/TU/ Peripheral Health Institute based on the utilisation pattern of each.
   • The storekeeper is also expected to install appropriate tools to periodically monitor controls over the expiry position of drugs held in stocks mainly through storage of drugs of a particular description at one place, expiry-wise stacking and marking expiry dates on cartons/ drug boxes with marker pens.
   • The Pharmacist need to check for Expiry date from the physical stock and Ni-kshay Aushadhi prior to issue.
   • In case of short-expiry supplies, the distribution should be on the rational basis keeping in view the utilization pattern to ensure judicious consumption.
      
4. Frequent Checks/ Physical Verification
   • Frequent check and physical verification to be carried out by the supervisory officer on regular basis. This ensures that the older drugs are being used first and that none of the drugs are past their date of expiry.

Resources

• Module for STS - Part 2: Ensuring Proper Registration and Reporting, CTD, MoHFW, India.
• Training Modules (5-9) for Programme Managers and Medical Officers, CTD, MoHFW, India.

Assessment

The short expiry drugs are the drugs which are left with a short shelf-life and need to be utilised immediately to avoid their expiry. 

Shelf-life of a drug is defined as a period during which the drug will last without deterioration, provided all precautions for good storage practices have been undertaken. The shelf-life of anti-TB drugs ranges from 3-5 years after which the chances of losing efficacy and probability of side effects increase rapidly. Therefore, it is important to ensure that appropriate steps are taken as soon as the drugs reach the critical stage to ensure their usage well within their shelf-life.

Identification of Short Expiry Drugs 

• Short expiry depends on two main factors, duration of the treatment and the time taken for transit from one level to the next lower level, i.e., from State Drug Stores (SDS) to the District TB Centre (DTC) --->Tuberculosis Unit (TU) ---> Peripheral Health Institute (PHI).
• Whenever the drugs are dispatched,  the transit duration (approx.3 months), possible treatment interruption (approx. 1 month), a probable extension of the Intensive Phase (1 month) and the buffer stocking norm under each facility should be taken into account, to calculate if the drug is expiring shortly.

Principles of Management of Short Expiry Drugs 

• For the drugs whose expiry date is mentioned only as month and year, the last day of that particular month should be considered as the date of expiry.
• Expiry-wise stacking of the drugs, marking of expiry dates on cartons/ drug boxes with marker pens and periodic monitoring of the expiry position of the drugs.
• The expiry date should be highlighted in yellow to flag attention to the drugs facing the risk of expiry.
• First-Expiry-First-Out (FEFO) principle should be strictly followed in the case of short-expiry drugs which means the drugs near to expiry should be issued first.
• All the details about the drug quantity and expiry date should be recorded and reported in Ni-kshay Aushadhi.
• A review of drug adequacy should be conducted monthly/quarterly by the officer in charge to identify any stock imbalances or excessive short expiry drugs and implement corrective measures accordingly.
• The distribution of short expiry drugs on a rational basis, keeping in view the utilisation pattern of each district to ensure timely consumption of close to expiry drugs.

Resources

• Standard Operating Procedure Manual Procurement & Supply Chain Management, CTD, MoHFW, India, 2018.
• Procurement, Supply Chain Management & Preventive Maintenance, Module 6, CTD, MoHFW, India.

Assessment

Buffer stock refers to a reserve that is used in unforeseen emergencies. It is also known as strategic stock or safety stock. This mandates close monitoring of drug stocks and maintaining buffer stock at all levels following the stocking norms to ensure an uninterrupted supply of drugs.

Importance of Maintaining Buffer Stock

1. To cover for delays/ disruptions (if any) in the supply chain.
2. To manage instances where more patients are initiated on treatment than the actual expected patients in a particular month.
3. To ensure that no patient is sent back due to a shortage of drugs at any point in time.
4. For smooth functioning of the programme on a national level.

Buffer stock to be maintained at different levels under NTEP

Resources

• Standard Operating Procedure Manual Procurement & Supply Chain Management, CTD, MoHFW, India, 2018.
• Guidelines for PMDT in India, 2021. 

Assessment

Lead time is defined as the time interval between the order generation for a product and its receipt/ availability for use. Lead time for a product depends upon the type of product, quantity available in the market/ manufacturer and the weather conditions in which it is transported.

In supply chain management lead time plays a very important role as it is mandatory to place reorders in time to avoid stocking out the product. Poorly managed lead time can lead to stock out and leads to delays in supplying the product to clients or end users.

Lead Time = Reordering delay (Time period) + Supply Delay (Time period)

Figure: Lead Time in Supply Chain Management

Benefits of Reduction in Lead Time

• Minimises stock-outs 
• Helps to get medicines/ items on time
• Reduces the wastage of inventory
• Gives the estimation of demand

How to Reduce the Lead Time

• Stop ordering surplus inventory
• Keep an eye on the inventory level
• Cut out as many steps as possible
• Maintain the inventory as per the storage capacity
• Continuous follow-up with the supplier or the facility

Resources

• Strategies to Reduce lead Time in Your Supply Chain.

Assessment