CHAPTER ONE

INTRODUCTION

1.0     Introduction

A pharmaceutical inventory management system is a computerized system that facilitates the inventory management of pharmaceutical products. An automated inventory management system can be categorized as an aspect of computer field of management information system (MIS) and it cannot exist without a proper database management which remains one of the difficult technical aspect of MIS design and one the greatest potential.

According to Owler (1983) on Weldon’s cost accounting and costing methods, “ a planned flow of materials is essential to the efficient operation of a factory great supplies of stock results in high storage costs, excessives capital being locked up, shortage or reliable space, stock losses and obsolescence, while short supply results in reduced output and possibly panic buying”. It then officially believed that one of the major objectives of an inventory management system is to ensure that “stock-out” do not occur and that surplus stocks are not carried. Inventory management system therefore can be termed as a means of checking stock level and controlling its extreme effect, either in increasing quantity and decreasing quantity.

The cost of inventory represent the capital tied up in business so that if inventory are excessive compared to customer’s demand, funds are tied up which could be used for other purpose, storage cost increases and the inventories are likely to deteriorate, become obsolete overtime or stolen. Also if they are inadequate, then the flow of work or production will be interrupted and unachieved and equipment will not be fully utilized to a full capacity. This is why inventory management is essential for business success.

This research work is carried out for the clinic unit of Akwa Ibom state polytechnic. This unit is basically divided into two sections. The dispensing section and the store section. The dispensing section is in charge of dispensing drugs and also maintain a mini checking of stock of drugs at a smaller unit level deals with unit such as number of tablets, capsules, mills of syrups etc. this mini checking of stock helps the dispensing unit keep appropriate stock of drugs collected from the store as they dispense out to patients. The store section on the other hand, is charged with the required to have inventory management system for drugs issued and received from the store. The inventory management is a little more elaborate than that of the dispensing section. These drugs are shaved in the store according to classification and each shelf has a recording sheet attached to a folder in which entries of drugs issued and received are entered. The unit entry level of the store is done in bulk as in packs for instance, thousand of mill in the case of syrups and containers for tablets, in contrast to the unit entry level of the dispensing section which is done in smaller units as in number of  tablets, number of tubes in case of crea and tens of mills in case of syrups.

• Theoretical Background

Inventory consists of services, cash, energy, manpower, raw material, finished and partly finished good. Inventory management is considered as very important aspect in any organization in order to minimize total cost and maximize profit. The term inventory is categorized into three. They are:

• Raw Material Inventory: This consists of those basic input that are converted into finished product through additional processing. It is relative because what constitutes the raw material may be a finished product to another company.
• Work in Progress Inventory: This is described as raw material that are being processed to yield a finished product.
• Finished Product Inventory: It is those completely manufactured goods kept in the warehouse await the departure. The wholesaler generally must therefore decide on the qualities of the goods he will purchase and hold and at what point he will place new order each goods. A manufacturer generally must hold stock of finished goods because it is not possible or economical to synchronize perfectly his sales and his production processes.

1.2      Statement of the Problem

Traditional inventory management in the store is done using human resources. Decisions have been taken concerning quantities, price and choice between different drugs with similar functions and between different drugs suppliers. These decisions are taken by the chief pharmacist of the pharmaceutical unit. Other decisions that the chief pharmacists require to make include placing others for drugs supplied, ensuring continual availability of drugs, especially those frequently prescribed by the doctors such as anti-material drugs and updating doctors with available drugs to avoid prescription of drugs not available. All of  these activities require diligent and timely co-ordination and efficient record keeping in order to keep tract of the movement of drugs in and out of the stores, enormous paper work is involved. To update doctors with available drugs. For instance, enquires would have to be made  from in-store and out-store record, these records would have to be written down to know what quantity of any particular drug is available and to know the drug that have reached re-order level and as such the paper could get destroyed or lost.

The human method is of course full of error and fraud and also paper files are not durable and not secured enough for long-term record keeping. This brought the need for a faster, more efficient, safer and accurate means of  inventory management in the store.

1.3      Aim and Objectives of the Study

The objectives of  this project is to design and implement a computer based pharmaceutical inventory management system for the store section of the unit to allow for :

• Better and efficient method of storing and retrieving necessary information
• Making it possible to have immediate access to necessary information on any particular drug or drug types.
• To check re-order levels and monitor expiration dates.
• Accuracy of data.
• Verification and elimination of large paper work.

Enable a neat and efficient updating of stock.

Electronic data processing and method have simplified the handling of large volume of materials and enable pharmaceutical administrative personnel to devote more time to careful and equitable evaluation and review of drug handling.

1.4      Significance of Study

The significance of automated inventory management in University of Uyo Teaching Hospital is an indispensable factor. No business organization or firm can easily make progress without adopting the relevant technology of inventory management. The significance this study involves:

• It suggest the basic inventory management function techniques.
• Fraudulent attitude among workers will be thing of the past
• This study will help to identify the objectives of stock distribution and control in business and government organization
• The actual of sale per day will easily be ascertained
• It will provide prompt access to well analyzed and accurate information on stock of goods available in the Hospital
• This research has help in expanding my horizon in the field of computer based inventory management system

The study of this research could serve as a source of information or reference material to those who will wish to conduct a research of this nature in future.

1.5     Scope of the Study

The scope of this study is to determine the feasibility study of automating inventory management in the pharmaceutical unit of the hospital. It is purely an academic work based entirely on preliminary investigation process of system analysis, the sole aim of which is to design and develop a program which would be implemented to carry out the operation.

1.6     Organization of Research

The information contained in the project are as follows:

Chapter One: Background of the study, the statement of the problem, significance of the study, objectives of the study, scope limitation and definition of terms.

Chapter Two: Review of related literature. This is divided into basic introduction and some subheadings.

Chapter Three: System design which includes the introduction, algorithm, flowchart and input and output format.

Chapter Four: It deals with system implementation which consists of the system design flowchart, choice of programming language and analysis of modules.

Chapter Five: This contains summary, conclusion and recommendation. A report is generated as output that can be used to keep the state of inventory and monitory of expiration date and re-order level and can aid management in charge of the pharmacy especially the chief pharmacists in their decision making process.

1.7      Definition of Terms

Inventory: Inventory can be defined as a stock of raw materials, partly finished goods (work in progress), finished goods ready for sale at a particular point in time. They are tangible assets to utilize directly or indirectly in the production of goods and services or held for future sales.

Buffer Stock (Safety Stock): This is the minimum stock that is kept to supply the incoming demands if the lead time is displayed. In some cases buffer stock is taken to be zero i.e reserved goods.

Average Stock: It is the half of the ordering quantity.

Ordering Quantity: This is the size of the stock you order at a time.

Ordering Frequency: this is the rate of low the stock is ordered. It could be annually.

Re-order Point: It is the inventory level at which the order must be made.

Inventory Management: Inventory management is an activity or process of ensuring that qualities of stock e.g raw material are controlled such that satisfactory level is maintained.