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About the Authors: Perry L. Fri is the Healthcare Distribution Alliance’s (HDA) executive vice president of Industry Relations, Membership & Education and chief operating officer of the HDA Research Foundation. At HDA, Fri is responsible for the direction, supervision, and development of industry initiatives that facilitate improved business processes and operational efficiencies in the health care supply chain. Fri currently serves on the Board of Directors for Healthcare Ready, a 501(c)(3) organization established to help public and private sector stakeholders across the pharmaceutical supply chain prepare for (and maintain operations during) disasters. Prior to joining HDA, Fri served as vice president of Industry Relations and Program Development for the Health Industry Distributors Association (HIDA). He holds a BA in history from the University of Maryland.

Susan E. Higgins is an independent management and strategy consultant who serves clients in the pharmaceutical industry, including pharmaceutical companies, federal public health agencies, hospitals, consumer health companies, and health care industry associations. Higgins specializes in supply chain and operations strategy, helping clients design and implement end-to-end supply chain strategies which enable profitable growth. Prior to her independent consulting work, Higgins was a principal with Strategy & based in New York. She holds an MBA in finance and entrepreneurship from New York University’s Stern School of Business, and a BS in logistics and marketing from The Ohio State University.

Rachel Sullivan is a project manager for the HDA Research Foundation. She is responsible for managing all research projects and events within the Foundation. She holds a BS from Miami University.



After completing this chapter, readers should be able to

  1. Explain the importance, both financially and operationally, of supply chain management: demand planning, procurement, and inventory management to a pharmacy.

  2. List demand management, inventory management, and procurement objectives for a pharmacy.

  3. Describe procurement and carrying costs for a pharmacy.

  4. Calculate inventory turnover rates (ITORs) and use this information to make purchasing and inventory control decisions.

  5. Describe three methods of inventory management.

  6. Describe the role of technology in improving inventory management in pharmacies.

  7. Describe the importance of supply chain integrity, and a pharmacy’s role in ensuring that its supply chain has integrity.


Marie Rodriguez, PharmD, recently stepped into a new role as the pharmacist-in-charge (PIC) of the Springfield location of Community Pharmacy, a chain pharmacy with 25 stores. Marie was successful as a pharmacist at another pharmacy in the Community Pharmacy network for 3 years. After a couple of weeks at the new location, she is preparing for a business review meeting with the Community Pharmacy district manager. Her new pharmacy has been underperforming financially, and customer satisfaction levels are lower relative to the other pharmacies in the chain. Marie ...

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