Impact of Inventory Control Reduction on Customer Satisfaction and Partial Fill Costs

Abstract

Objectives: To determine the impact of tightly controlled inventory reduction on customer satisfaction and partial fill costs. Methods: The project was a cross-sectional study employing two survey instruments and a time in motion analysis to determine the number of “we-owes” filled by pharmacies due to inventory reduction, the costs that arise from such reductions, and the impact on customer satisfaction. The first survey instrument was sent to four pharmacies in the Fry’s Food and Drug chain. The survey assessed number of “we-owes” per pharmacy and reasons for having them. The second survey consisted of several statements concerning customer satisfaction. The participants were asked to rate their agreement with each statement using a response scale from 1 (strongly disagree) to 5 (strongly agree). A time-in-motion analysis was performed at two pharmacies averaging 350 prescriptions per day to record the amount of labor involved in filling “we-owes". Results: Medium to high volume Fry’s pharmacy fills an average of forty “we owes” each week. The average yearly costs for filling the “we owes” ranges from $171,579 to $568,796 per year depending on the job status of people filling the “we owes.” The main reason for these partially filled prescriptions was the minimum order point was incorrect accounted for 53.8% of the “we owes Almost half of customers owed medication felt it was not inconvenient them to pick the remainder of their prescription and that over half have had this happen more than once. Implications: The costs of tight inventory control need to be compared with the savings obtained from maintaining marginal inventories.