Inventory Management¶

Overview¶

Managing supplies and medications efficiently prevents both shortages and waste. For DPC practices—especially those starting lean—smart inventory management means having what you need without tying up cash in unused supplies.

This page covers the mechanics of counting, storing and reordering. The legal side of stocking and selling medications—state registration, DEA records, supplier rules and pricing—is settled on the Dispensing Medications page; this page links to it rather than repeating it.

Prerequisites¶

• Office space secured (see Office Space Guide)
• Core services defined
• Basic supply list identified (see Equipment and Supplies Checklist)

Starting Lean: Inventory by Stage¶

Stage 1: Just Starting (0-25 Patients)¶

Minimal inventory: - Basic exam supplies - Point-of-care tests (if any) - Common medications (if dispensing) - Buy small quantities

Reality: With few patients, you don't need much. Better to reorder frequently than have supplies expire.

Stage 2: Growing (25-75 Patients)¶

Add: - Larger quantities of essentials - Broader medication selection - Simple tracking system - Reorder points defined

Stage 3: Established (75+ Patients)¶

Systematize: - Comprehensive inventory system - Par levels for all items - Regular audits - Cost optimization

What to Track¶

Categories of Inventory¶

Medical supplies: - Exam room supplies (gloves, gowns, etc.) - Diagnostic equipment consumables - Wound care supplies - Injection supplies - Sample collection supplies

Medications (if dispensing): - Common acute medications - Chronic disease medications - Injectable medications - Vaccines (if stocking)

Office supplies: - Administrative supplies - Cleaning supplies - Patient education materials

Equipment maintenance: - Calibration supplies - Replacement parts - Batteries

Simple Tracking Systems¶

Visual System (Minimal)¶

How it works: - Organize supplies in consistent locations - Mark reorder point with tape/marker on shelf - When you reach the mark, reorder

Works for: Very small practices, minimal inventory.

Spreadsheet System (Basic)¶

Track: - Item name - Current quantity - Reorder point - Vendor - Cost per unit - Last ordered

When to update: - When ordering - When receiving - Weekly or monthly audit

Template columns: | Item | Par Level | Reorder At | Current Qty | Vendor | Unit Cost | Last Ordered | |------|-----------|------------|-------------|--------|-----------|--------------|

Practice Management/EMR Tracking¶

Some systems include: - Inventory modules - Medication dispensing tracking - Automatic reorder alerts - Lot tracking for vaccines

Check if your EMR offers inventory features.

Setting Par Levels¶

What Is a Par Level?¶

The quantity you want to keep on hand for each item.

How to Calculate¶

Consider: - Usage rate (units per week/month) - Delivery time (how long to receive orders) - Safety buffer (for unexpected needs)

Formula: Par Level = (Weekly Usage × Weeks of Lead Time) + Safety Buffer

Example: - Use 50 pairs of gloves per week - Takes 1 week to receive order - Want 2-week safety buffer - Par = (50 × 1) + (50 × 2) = 150 pairs

Reorder Point¶

The quantity at which you place an order.

Reorder Point = Weekly Usage × Lead Time Weeks

When inventory drops to this level, order to bring back to par.

Medication Inventory¶

If Dispensing Medications¶

Special considerations: - Expiration dates - Storage requirements - DEA regulations (controlled substances) - State pharmacy laws - Documentation requirements

Three federal rules that shape your stock (details and citations on the Dispensing Medications page):

• Buy only from wholesale distributors licensed in your state, and keep the transaction information for every prescription-drug purchase for six years (Drug Supply Chain Security Act). The invoice or transaction statement you receive with each order is that record; file it with the lot numbers.
• Manufacturer samples may never be sold or charged for in any form (21 CFR 203.20). Store samples apart from dispensing stock and keep them out of your tracking spreadsheet's priced inventory.
• DEA record-keeping applies to controlled substances only (21 CFR 1304.22©); other medications follow your state's dispensing rules.

Medication Selection¶

Start with high-volume, low-risk: - Common antibiotics - Basic blood pressure medications - Common maintenance medications - NSAIDs and pain management

Consider: - Patient population needs - Storage requirements - Cost vs. sending to pharmacy - Expiration risk

Tracking Requirements¶

For each medication: - Lot number - Expiration date - Quantity on hand - Supplier and the DSCSA transaction record for the purchase - Dispensed to whom, when and how much. A per-patient dispensing record is a federal requirement for controlled substances (21 CFR 1304.22©) and a state requirement in many states for every dispensed drug; keeping it for all medications is the simpler habit and makes recalls traceable

Expiration Management¶

• First in, first out (FIFO)
• Check expirations monthly
• Remove expired items promptly
• Dispose properly
• Buy quantities matching usage

Vaccine Inventory¶

Special Requirements¶

Storage: - Refrigerator held between 36°F and 46°F (2°C to 8°C) for most vaccines; freezer between -58°F and +5°F (-50°C to -15°C) for frozen vaccines (CDC Vaccine Storage and Handling Toolkit) - A digital data logger with a probe; CDC asks you to check and record the minimum and maximum temperatures each workday - Backup power or plan

Tracking: - Lot numbers - Expiration dates - Manufacturer - Doses given - VFC requirements (if participating)

Documentation: - Temperature logs - Waste documentation - Patient administration records

VFC (Vaccines for Children) Program¶

If seeing children: - Free vaccines for eligible children - Strict inventory and storage requirements - Reporting requirements - Consider whether participation makes sense for your practice

Ordering Strategies¶

Vendor Selection¶

Consider: - Pricing - Minimum orders - Delivery time - Return policies - Customer service - Product quality

Common suppliers (examples, not endorsements; the kit recommends no vendor): - Medical-surgical distributors such as McKesson, Henry Schein, Medline and Cardinal Health - Amazon Business and office-supply retailers, for general and office supplies only - Direct from manufacturers

Prescription drugs are different: under the DSCSA you may buy them only from a wholesale distributor licensed in your state. Supplier options and illustrative pricing are on the Dispensing Medications page.

Bulk vs. As-Needed¶

Buy in bulk when: - High-volume items - Good storage space - Long shelf life - Significant cost savings

Buy as-needed when: - Low-volume items - Expiration risk - Limited storage - Minimal cost difference

Group Purchasing¶

Options: - DPC organizations (the DPC Alliance is reported to offer member purchasing discounts; confirm with the organization) - Independent-practice buying groups and group purchasing organizations - State medical association programs - Hospital system affiliations (if applicable)

Potential savings: commonly quoted at 10-30% on many supplies; compare against a direct quote before joining

Storage Best Practices¶

Organization¶

By location: - Exam room supplies in exam room - Stock supplies in storage area - Medications in secure location

By category: - Group similar items - Consistent placement - Labels for shelves

FIFO (First In, First Out): - New items go behind old - Use oldest first - Prevents expiration waste

Medication Storage¶

• Secure location (a locked cabinet or safe is required for controlled substances; see Controlled Substances Compliance)
• Samples stored separately from dispensing stock
• Proper temperature
• Away from moisture
• Organized by category or alphabetically
• Clear labeling

Temperature-Sensitive Items¶

• Monitor refrigerator/freezer temperatures
• Daily temperature logs
• Alarms for temperature excursions
• Backup plans for power outages

Waste Reduction¶

Common Waste Sources¶

• Expiration before use
• Overordering
• Damage/spoilage
• Theft (rare but possible)
• Obsolete items

Prevention Strategies¶

• Match ordering to usage
• Regular expiration checks
• Proper storage
• FIFO rotation
• Avoid bulk buying for low-volume items

Expired Medication Disposal¶

• Controlled substances go to a DEA-registered reverse distributor, with the transfer recorded; do not dispose of them yourself (see Controlled Substances Compliance)
• Non-controlled stock: wholesaler return programs or a reverse distributor; some manufacturers credit returns of unopened, in-date stock
• Medication take-back programs are for patients' own medications, not practice inventory
• Document every disposal (drug, lot, quantity, date, method)

Regular Audits¶

Weekly Quick Check¶

• Scan for low items
• Check refrigerator temperatures
• Note anything unusual
• Quick visual of organization

Monthly Audit¶

• Review expiration dates
• Update inventory counts
• Check against tracking system
• Place orders as needed
• Review usage patterns

Quarterly/Annual Review¶

• Analyze usage trends
• Adjust par levels
• Evaluate vendors
• Assess cost savings opportunities
• Update procedures

Cost Control¶

Tracking Costs¶

Monitor: - Monthly supply spending - Cost per patient - Medication costs - Waste/expired items

Reducing Costs¶

Strategies: - Group purchasing organizations - Generic medications - Competitive vendor bidding - Minimize waste - Right-size ordering

Passing Costs to Patients¶

DPC models: - At-cost medication dispensing - Small markup for handling - Separate billing for supplies - Included in membership (see the warning below before choosing this)

Checklist: Inventory Management¶

Initial Setup¶

• Identify all items to track
• Establish initial par levels
• Set up tracking system
• Organize storage locations
• Select vendors
• Document procedures

Ongoing¶

• Weekly visual check
• Monthly expiration review
• Monthly inventory audit
• Timely reordering
• Temperature log maintenance
• Quarterly usage review

Medications (if dispensing)¶

• Secure storage
• Lot and expiration tracking
• DSCSA transaction records filed for six years; suppliers verified as state-licensed wholesalers
• Samples stored apart and never charged for
• Proper disposal procedures
• Controlled substance compliance
• Regular inventory counts
• Medications billed separately from the membership fee (HSA rule)

Sample Inventory List¶

Basic Exam Supplies¶

Point-of-Care Supplies¶

Resources¶

• Equipment and Supplies Checklist - What to stock
• Dispensing Medications - State registration, DEA records, DSCSA, suppliers and pricing
• Controlled Substances Compliance - Storage, counts and disposal
• Office Space Guide - Storage considerations
• Equipment inventory template - Spreadsheet starting point
• CDC Vaccine Storage and Handling Toolkit - Temperature ranges and logging
• DPC organizations and state medical associations - Group purchasing programs

Read through and figures checked on 2026-09-23.

Next Steps¶

After establishing inventory management: - Daily Workflow Optimization - Incorporate into routines - Regular review and optimization