Foundations of Inventory Management
Learner’s Guide
February 2014 Course Code: 204130
Foundations of Inventory Management: Learner’s Guide
Table of Contents
Introduction.................................................................................................................................... 3
Why Inventory Management is Important.................................................................................... 5
Tracking and Ordering Inventory ................................................................................................. 7
Reading a Shelf Label ................................................................................................................... 9
Cycle Counts ................................................................................................................................ 10
Out of Stock Scans ...................................................................................................................... 13
Out of Stock Report ..................................................................................................................... 14
Reviewing Orders ........................................................................................................................ 15
Receiving Inventory..................................................................................................................... 21
Conclusion ................................................................................................................................... 22
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NOTES Foundations of Inventory Management:
Learner’s Guide
Agenda
Course Duration: 2 ½ hours
Topic Duration Description
Introduction 30 min. Discuss the course learning
objectives
Discuss how inventory
management affects customers
and why it is important to the
success of the pharmacy
Review key inventory management
terms and tasks from the
Introduction to Inventory
Management WBT
Cycle Counts 15 min. Review the types of Cycle Counts
Discuss how to identify BOH
inaccuracies
Out of Stock 20 min. Review the process for preparing
Scans the pharmacy for an Out of Stock
Scan
Analyze the Out of Stock report and
discuss steps to ensure its
accuracy
Warehouse 30 min. Differentiate between Warehouse
Ordering and OV inventory management
procedures
Introduce the Pending Inventory
Drug Detail Report
Analyze the AIMRx Order Detail
Report and discuss how to ensure
an accurate Warehouse order
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Foundations of Inventory Management:
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Agenda, continued
Topic Duration Description
OV Ordering 30 min. Differentiate between Voluntary
and Mandatory OV Orders
Analyze an AIMRx generated OV
Order and discuss how to ensure
the right products are ordered in
the right quantities to meet patient
needs
Receiving 10 min. Discuss how Warehouse and OV
Orders Orders are received
Conclusion 5 min. Summarize course content, review
learning objectives and identify next
steps
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NOTES Foundations of Inventory Management:
Learner’s Guide
Introduction
Discussion #1
Duration: 5 minutes
Description: This introduction consists of three key
sections: getting to know each other, considering
customer service, and reviewing the learning objectives and
agenda.
I. Getting to Know Each Other
1. Each of you will have an opportunity to share the following:
o Your name
o Your store number (or store location)
o How long you’ve been with CVS (including any front store
experience)
II. Working in the Pharmacy
2. Recall an experience when you were working in the pharmacy
and a customer was looking for an item that was not in stock
o Did you help the customer find the item?
o If not, did you tell the customer when or how it would be
available?
o What could you have done to make this experience better
for the customer?
3. What impact does CVS’s focus on inventory management have
on customer service?
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NOTES Foundations of Inventory Management:
Learner’s Guide
III. Reviewing Learning Objectives
Now that you have had an opportunity to work at the Production
workstation you can see how naturally we would strive to stock all
merchandise that our patients need. This is especially true in the
pharmacy. When a patient presents a new or refill prescription
order to the pharmacy department, he or she expects that the
pharmacy will be able to fill it.
As a Pharmacy Team Member, you are responsible for performing
some basic inventory management procedures. While these
procedures are not complex, it is critical that they are performed
consistently and correctly to maintain an appropriate inventory level
for your pharmacy.
In this training session, you will build upon what you learned in the
Introduction to Inventory Management web-based training course.
Upon completing this course, you will be able to:
Explain key inventory management terms and processes as
described in the Introduction to Inventory Management web-
based course
Differentiate between System Generated and Store Initiated
Cycle Counts
Recognize when there is a need for a Store Initiated Cycle
Count
Describe the processes involved in preparing the pharmacy for
an Out of Stock Scan
Analyze order reports for both Warehouse and Outside Vendor
(OV) orders
Identify reasons to modify Balance on Order (BOO) for both
Warehouse and OV orders
Describe the process of checking in both Warehouse and OV
deliveries
As you move through the activities in this training, think about how
you can apply what you learn and ensure that the products our
patients need are available. Also, consider the impact to the
Pharmacy Team Member stationed at each workstation when we
don’t have enough or any at all of a certain medication.
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NOTES Foundations of Inventory Management:
Learner’s Guide
Why Inventory Management is Important
Activity A
Duration: 15 minutes
Description: Review some of the main points from the
Introduction to Inventory Management web-based
course.
Instructions: CVS's goal for inventory management is to have the
right products, in the right quantity, at the right time. Review the
policies you learned about in the Introduction to Inventory
Management course by answering the questions below. For each
question, consider why we complete the task.
Question Answer Why
Which four AIMRx
activities must be
performed
consistently and
correctly?
When performing
Cycle Counts, which
type should you
complete first?
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NOTES Foundations of Inventory Management:
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Question Answer Why
How often should
you complete Cycle
Counts?
When should Out of
Stock Scans be
performed?
How often should
you complete RTS
Balance
Maintenance?
When a patient
needs an item not
carried in the CVS
Warehouse, where
should you order
that item from?
What information is
listed in the AIMRx
Order Detail Report?
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NOTES
Foundations of Inventory Management:
Learner’s Guide
Tracking and Ordering Inventory
Activity B
Duration: 10 minutes
Description: Use a guess-the-letter game to review
terms for tracking and ordering inventory.
Instructions: In this activity, you will play a guess-the-letter game
to review the terms you learned about in the previous courses. Fill
in each letter in the blank space to determine the term. Then write
the definition of that term in the space below.
1. __ __ __ __ __ __ __ __ __ __ __ __ __
2. __ __ __ __ __
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NOTES Foundations of Inventory Management:
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Tracking and Ordering Inventory, continued
3. __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
__ __ __ __ __
4. __ __ __ __ __ __ __ __ __ __ __ __ __ __
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NOTES Foundations of Inventory Management:
Learner’s Guide
Reading a Shelf Label
Activity C
Duration: 5 minutes
Description: Introduce how to properly read a shelf
label.
Directions: You learned about how to read a medication label in
earlier training sessions. It’s also important that you understand
how to read a shelf label. Fill in the blanks below to identify
important fields on the shelf label.
2 3
1
4
7 6 5
1.
2.
3.
4.
5.
6.
7.
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NOTES Foundations of Inventory Management:
Learner’s Guide
Cycle Counts
Activity D
Duration: 10 minutes
Description: Review the types of Cycle Counts that
need to be performed.
Directions: You learned about completing Cycle Counts in the
Introduction to Inventory Management web-based training. In this
activity, you will use the clues below to differentiate between the
two types of Cycle Counts.
Clue Type of Cycle Count
1. This Cycle Count appears
automatically in the RF Unit. System Generated
or
Store Initiated
2. This Cycle Count is initiated
by the Pharmacy Team System Generated
Member when they suspect
an inaccurate BOH. or
Store Initiated
3. If your warehouse delivery
arrives with no Plavix and System Generated
you just dispensed the last
bottle this morning, what or
type of Cycle Count should
you perform? Store Initiated
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Learner’s Guide
Cycle Counts, continued
Clue Type of Cycle Count
4. You should perform this type
of Cycle Count first. System Generated
or
Store Initiated
5. This Cycle Count is
performed daily, first thing in System Generated
the morning.
or
Store Initiated
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NOTES Foundations of Inventory Management:
Learner’s Guide
Cycle Counts, continued
Discussion #2
Duration: 5 minutes
Description: Discuss ways to identify a potential BOH
inaccuracy and need for a Store Initiated Cycle Count.
Instructions: In this section, you will discuss ways to identify a
potential BOH inaccuracy. Use the space below to take notes about
where and how you identify the inaccuracy.
Where identified? How?
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NOTES Foundations of Inventory Management:
Learner’s Guide
Out of Stock Scans
Activity E
Duration: 5 minutes
Description: Review procedures for preparing the
pharmacy for an Out of Stock Scan.
Directions: You learned about preparing the pharmacy for an Out
of Stock Scan in the Introduction to Inventory Management web-
based training. In this activity, you will review the reasons why
each of the activities is necessary.
Action Reason for Action
Complete all Rx
Returns to Stock
Process overstock,
damaged or outdated
items
Fill automated
dispensing units
Straighten and face
the pharmacy
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NOTES Foundations of Inventory Management:
Learner’s Guide
Out of Stock Report
Discussion #3
Duration: 10 minutes
Description: Discuss how to review the Out of Stock
Report
Instructions: After the Out of Stock Scan is completed the Out of
Stock Report must be reviewed. Refer to an Out of Stock Report
and use the table below to capture notes about what you are
reviewing.
What to review What you should look for
Section 1: Store
Section
Section 1: A – Z
medications
Section 1: All
medication types
Section 2: System
BOH = 0
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NOTES Foundations of Inventory Management:
Learner’s Guide
Reviewing Orders
Discussion #4
Duration: 10 minutes
Description: Discuss the differences between ordering
from the Warehouse and ordering from the Outside
Vendor (OV).
Instructions: Use the table below to take notes about the
differences between ordering from the Warehouse and ordering
from the OV.
Warehouse Ordering Outside Vendor (OV)
Ordering
How often?
How generated?
How reviewed?
How submitted?
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NOTES Foundations of Inventory Management:
Learner’s Guide
Important Reminder
Schedule II controlled substances (CII) are ordered with an official
DEA order form (known as the DEA 222 form).
Only a Pharmacist with a valid Power of Attorney can order
Schedule II controlled substances. The Power of Attorney form
must be kept on file at the Pharmacy.
A Pharmacist must check-in all Schedule II controlled substances
received by the pharmacy.
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NOTES Foundations of Inventory Management:
Learner’s Guide
Reviewing Orders, continued
Discussion #5
Duration: 20 minutes
Description: Discuss how to review the AIMRx Order
Detail Report.
Instructions: The AIMRx Order Detail Report is the report that
summarizes what AIMRx is going to automatically order from the
Warehouse. Refer to a copy of the report as you discuss the steps
in the review process. Use the area below for your notes.
Review Item(s) Purpose for review
Items listed in the
Pending Inventory
Queue (Pending
Inventory Drug Detail
Report)
Items with unusually
high or low BOO
Items with unusually
high or low BOH
Items with unusually
high or low TIL
Seasonally impacted
items
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NOTES Foundations of Inventory Management:
Learner’s Guide
Reviewing Orders, continued
Activity F
Duration: 10 minutes
Description: Review differences between Voluntary
and Mandatory OV orders.
Directions: You learned about Voluntary and Mandatory orders in
the web-based training. Use the table below to further differentiate
between the two types of OV orders.
Voluntary Mandatory
How often?
How generated?
How reviewed?
How submitted?
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NOTES Foundations of Inventory Management:
Learner’s Guide
Reviewing Orders, continued
Discussion #6
Duration: 20 minutes
Description: Discuss the steps to complete an AIMRx
Generated OV order.
Instructions: You were introduced to the 5 steps to complete an
AIMRx Generated OV order in the Introduction to Inventory
Management web-based training. This discussion will build upon
that knowledge by taking a closer look at each step. Use the area
below to take notes.
1. Order Creation
2. Cycle Counts
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NOTES Foundations of Inventory Management:
Learner’s Guide
3. Order Review, Modify, and Add
4. Authorize and Transmit
5. Print Order Report
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NOTES
Foundations of Inventory Management:
Learner’s Guide
Receiving Inventory
Discussion #7
Duration: 10 minutes
Description: Introduce the three ways inventory is
received.
Instructions: We receive orders in three ways: from the CVS
Warehouse, from Outside Vendors, or directly from manufacturers
via Drop Shipments. Have you received any of these types of
deliveries? Listen and take notes as group members share their
experiences.
Type of Delivery Description
CVS Warehouse
Deliveries
Outside Vendor (OV)
Deliveries
Drop Shipments
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NOTES Foundations of Inventory Management:
Learner’s Guide
Conclusion
Review
Duration: 5 minutes
Description: Summarize course content, review
learning objectives, and identify next steps.
As a Pharmacy Team Member, you are responsible for performing
many basic inventory management procedures. While these
procedures are not complex, it is critical they are performed
consistently and correctly to maintain an appropriate inventory level
for your pharmacy.
Following the processes that you learned about in this course and
in the Introduction to Inventory Management course will ensure that
your pharmacy maintains optimal inventory levels. This means
having the right products, in the right quantity, at the right time for
your patients.
Instructions: Write down any questions or key points that you
would like to remember in the space below.
Next Steps
Now that you have completed the Inventory Management training,
you are ready to move to the next step in the LearnRx Program.
The next course in this curriculum is the Inventory Management on-
the-job training. In this training, you will have the opportunity to
apply what you have learned in this course in the pharmacy with
help from your Coach.
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Support Staff Payroll Slip for Inventory Management Basics Instructor-led
Training
In order to be paid properly for Classroom Training, you and your Trainer must complete
the following form. You must then give this form to your Home Store Manager who will
record the appropriate number of hours under the payroll code indicated.
Employee Name: ___________________________
Employee ID: _______________
Date: ______ / ______ / ______
Class Start Time: _______________
Meal Break Time Out: _______________
(if applicable)
Meal Break Time In: _______________
(if applicable)
Class End Time: _______________
Total Hours to be charged to TR7 (Pharmacy Training Payroll): __________
Employee Signature: _____________________________
Trainer Signature: _____________________________
Home Store Manager – Retain this form with your payroll records for the appropriate
time period.
