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“Now hiring.” This posting is all too common in the pharmacy sector. A shrinking talent pool frustrates the plans of both chain stores and independents to improve patient care. Yet improving patient care paves the pathway to greater profitability.
Matt Noffsinger
Pharmacy automation plays a significant role to help reduce labor costs to maintain profitability in an industry with shrinking margins. However, pharmacy automation solutions can do much more than contain costs through efficiency — today’s automation and software tools can drive new revenue streams and profits by allowing labor reallocation toward new programs such as clinical billing, medication therapy management (MTM) and vaccinations.
Two models for consideration
There are two models for consideration within the retail chain store space that can benefit from automation, although each model has distinct benefits and challenges.
Individual pharmacies within a retail group face constraints such as limited space, staffing shortages and the need for efficient workflow management.
The central fill model faces the challenge of overcoming complexities associated with transitioning from store-level workflows to a centralized system, managing investments in infrastructure and technology, and achieving seamless integration across multiple locations.
Looking for the best of both worlds? Consider a hybrid model. Particularly as the emergence of smaller formats represents a growing trend in the retail pharmacy sector, this underscores the importance of adaptable and scalable automation solutions that can cater to diverse operational needs. Any hybrid model, however, calls for relaxation of currently rigid standard operating procedures (SOPs).
SOPs — The struggle is real
Retail pharmacy chains uphold rigorous SOPs to enforce uniformity across all locations. The irony is that strict adherence to SOPs can prevent chain pharmacies from achieving one of their most pressing challenges — lowering the cost to fill while growing business.
Retail chains can adopt a nuanced approach by considering a hybrid model that optimizes efficiency while respecting SOPs. This approach involves identifying pressure points within the current operational framework and strategically implementing automation solutions.
One effective strategy is the adoption of a micro or macro central fill model. In a micro central fill setup, one store serves as the central hub for prescription filling, catering to multiple smaller or like pharmacies within a prescribed geographic vicinity. A macro central fill model involves consolidating prescription filling operations into a centralized facility, leveraging economies of scale to drive down costs.
As one example, instead of carrying a high-volume set of drugs in each store, pharmacy chains can stock it in one store. Automation software enables chains to predict the utilization of these drugs at various locations and package formats.
In another example, chains can anticipate rush or peak periods such as lunch or after work.
Reallocate labor for revenue-generating streams
Furthermore, every human resource saved from non-value-added work presents an opportunity for revenue generation. Pharmacies can empower the workforce to engage in high-value activities such as patient consultations, MTM and other clinical services when redundant tasks are streamlined through automation. Overall, the value adds and revenue potential from reallocated labor are many, all due to automation:
• Expand Services: Automation enables pharmacies of any type to expand their services beyond traditional prescription filling for additional revenue streams from MTM or adherence programs, to name two.
• Improve Customer Experience: Streamlined filling and service delivery, alongside expanded patient care services leads to an improved customer experience. Reduced wait times, improved prescription accuracy and increased convenience of automatic, online refills or medication synchronization produce a positive customer experience. This leads to increased loyalty, repeat business and word-of-mouth referrals.
• Enhanced Inventory Management: Automation tools streamline inventory processes, leading to reduced waste, improved stock rotation and better resource utilization. When pharmacies optimize inventory levels and offer greater medication availability, these outlets can capture sales opportunities.
• Data Analytics: Robust data analytics capabilities supply data to gain insights into customer behavior and buying patterns, medication adherence, and inventory trends. Data-driven decision making empowers pharmacies to tailor inventory according to individual store sales trends, optimize revenue streams and capitalize on market trends.
Today’s automation and software tools offer multiple models for adaptation by chain store pharmacies. By embracing automation and leveraging its capabilities to expand services, enhance customer experiences, optimize inventory management and inform decisions based on data analytics, pharmacies large or small can unlock new revenue streams and drive profitability in an increasingly competitive landscape.
Matt Noffsinger is cofounder and president of JFCRx.
