CHAPTER 5: GENERAL OPERATIONS
MANAGEMENT
Transformation- process of business using
resources (input) to create goods and services
(output) that are offered
Operations- process of creating goods and
services and transforming it into valued, profit-
generating goods and services
Efficiency of operations will affect profitability as it
costs money to develop goods or provide service.
Offerings- goods and services
1. Pure tangible goods
 Shelving
 Computers
 Prescription vials
 Software
 Drugs
2. Services- tasks performed by people
involved; may not help in choosing
resources for creation nor in maximizing
efficiency; wholesaler's service, phone
service, adjudicating service
2.1 Customer Service- improve customer
experience and overall sales; overhead
costs
2.2 Product Service- add value to product
and enhance its sales; consumed after
purchase
2.3 Service Products- independent of
tangible offerings and consumed
separately;
3. Tangible good with accompanying
service

4. Hybrid
5. Major service with accompanying goods
from services
Profit- the money left after deducting all costs
associated with creating goods and service sold
 Quality goods
 Reasonable salary
 Superior computer system
Goods and services offered by a business are
predetermined by the decisions of owners and
not the category of business.
Based on:
1. Opinions of customers
2. Mission of business (defines its
reason for existence; delineates
what business do and communicate
unique advantages on products)
Electricity- influences efficiency of ability to
perform activities in filling the prescription
especially in: 1) determining amount of patient's
copay which is calculated during the adjudication
process and, 2) determining prices of goods by
scanning the Universal Product Code (UPC)
10 Decisions under Purview of OM:
1. Design of Goods and Services
 In line with needs/wants of customers:
require analysis and planning— result to
increased profitability
 Medication Therapy Management (MTM)
allows optimum opportunity to design even
compounded drugs
 Planning is important for new products
 Internal and external environment is
important to determine capabilities and
needs
2. Process Strategies
 order of steps influence efficiency and
quality and profitability
 directly affects patients especially in
services
Capacity- determined by resource that
imposes greatest limitation on process
Bottleneck- limiting process; must be
identified and eliminated to increase
capacity; decreasing quantity of good
created and number of services provided
Flowchart- diagram of steps in creating
goods or offering services; helps in
analyzing resources, improving the
process, evaluate strengths and
weaknesses
3. Managing Quality
 Measuring quality will differ depending
whether it is a good or a service
 Product- quality is based on objective
standards
 Service- quality is based on subjective
standards
Types of Cost:
3.1 Maintaining Quality
3.1.1 Prevention Cost- use of
resources to prevent errors
3.1.2 Appraisal Cost- use of resources
to inspect and audit to identify a
drop in quality
3.2 Associated with Poor Quality
3.2.1 Internal failures- errors rectified
before consumers receive it
3.2.2 External failures- errors delivered
to and identified by consumers;
more costly and timely
4. Location
 Affects ease and efficiency of input
acquisition, transfer of output to consumers,
which outputs are chosen to be offered
 Must be conducive and appropriate to attract
pharmacists and receive deliveries
 Proximity to consumers and preference of
consumers affect sales
 Market factors influenced by location will
influence operations
5. Layout
 Layout inside the pharmacy must and
appropriate to goods and services and its
operations
6. Human Resources
 One of the most important resources
 Goods and services are transformed through
personnel
 Personnel efficiency and ability to interact
affects efficiency of operations
 Type of people that are attracted to work,
environmental factors affect operations
7. Scheduling
 A licensed pharmacist must be present when
prescriptions are filled
 Work schedules should be according to
preferences
 Graphing and Charting methods- determine
demand for having prescriptions filled and
for receiving disease-state management
services
 Chase Strategy- chase demand by having
personnel available to handle the demand
when they predict the demand to be greatest
  Level Scheduling- provide level amount of
production so that a constant workforce can
be employed to handle the demand day after
day
 Forecasting- estimates demand; necessary
prerequisite for methods in operations;
requires the use of information,
mathematical functions, statistical analyses
8. Supply Chain Management
 Chain of businesses that supply the input—
relationships and agreements are important
 Management of supply of inputs to create
outputs; having an efficient supply of
prescription products is critical to the service
of filling prescriptions
 Wholesalers- primary vendors that
distribute prescription drugs;
i. Electronic order submission
ii. Next-day delivery service
iii. Private-label programs
iv. Cooperative advertising
v. Special-handling services
vi. Pharmacy computer systems
vii. Pricing
viii. Store planning
 Distinguishing features of wholesalers:
services provided, authorization status,
sales volume
9. Inventory Management
 Largest expense
 Too much inventory=money sitting on
shelf, prevents to pay for other resources
 Too little inventory=causes inefficiency
10. Maintenance
 Maintenance must be provided to avoid
resource failure
 if resources are not functioning properly,
this can create inefficiencies that decrease
profitability
 affects satisfaction of patients and
patronage of business
CHAPTER 6: MANAGING TECHNOLOGY AND
PHARMACY INFORMATION SYSTEMS
Pharmacists need to understand both capabilities
and limitations of technology.
Information- common denominator in all
healthcare systems, disciplines, and specialties
today
Technology- anything that replaces routine or
repetitive tasks that were previously performed by
people
Automation- any technology, device or machine
that is linked to or controlled by a computer and
used to actually do work that was previously done
by humans
Transaction Processing- simplest level of data
processing;
Management Information Systems- next level;
data processing groups transactions into
meaningful sets, allowing ability to identify trends
that predict the success of organization;
determine needs such as staffing hours,
inventory management, third-party
reimbursement
Decision support- occurs when computer
functions to provide support while transactions
are occurring
 drug utilization review- alert pharmacists to
potential drug-related problems
Artificial Intelligence/Expert Systems- highest
level of data processing; guide caregivers
through complex therapy decisions, determine
when patients diagnosed with terminal condition
lack a high enough quality of life to justify
continuing extraordinary life-support systems
 program that can use a set of given rules
to make decisions
 consist of knowledge base and inference
engine
 ECG
 Collect rules and knowledge human
experts employ in the knowledge base so
that diagnosing or selecting would occur
in a highly consistent and reliable manner
Hardware- encompasses computer equipment
used to perform input, processing, and output
activities
1. Visible H- things we can see
Software
1. Operation Systems- control operation of
devices
2. Application Software- makes up all the
applications that users employ to actually do
work
2.1 DataBank- supplies knowledge bases for
integration inti healthcare applications
Pharmaceutical Care Software
1. Point-of-Care Software- where a
pharmacist provides pharmaceutical care to
a patient or when assisting a colleague in
provision of care
2. Clinical Pharmacy Software- integrated
with all other aspects of pharmacy to ensure
that care can be coordinated fully
Pharmacy Management Systems- Erreby,
QS/1, PDX; primarily pharmacy distribution
systems, add necessary screens and
resources to do work
Point-of-Care Devices
 Include notebook computers, desktops,
personal digital assistants (PDAs)
 Contain patient-oriented drug informatjon
 Integrate available data as a by-product of
rendering patient care into data warehouse
and clinical data repositories which
populate decision-support applications and
reduce uncertainty during decision making
(collects demographics, diagnostic info,
adverse drug reactions and allergies, lab
results, drug profiles)
Personal Digital Assistants (PDA)- interface
with wireless networks which makes delivery of
the most up-to-date information when needed
1. ePocrates RxPro- comprehensive drug
information with alternative medicine and
infectious diseases; includes region-
specific formulary information to aid in
selecting appropriate product
2. LexiComp Platinum- most clinically
dependable; greatest breadth of
information; high quality monographs
can be printed and available through
Micromedex electronic package
3. DrugDigest.org- evidence-based; for
consumers; comprehensive drug
database: empowers consumers by
providing non-biased information: drug-
drug comparison, side effect comparison,
drug-interaction checker
The responsibility of fully realizing benefits
remains an important key to success and should
not be overlooked after selection of the
appropriate systems.
The addition of a new technology for an
organization is an investment in time and money
for long-term, should only be initiated until an
organization considers the following:
1. Purpose must be clearly identified
2. Function up to expectations
3. Should be clearly advantageous for the
org
4. Clear advantage in terms of cost and
benefit and return on investment
5. Strategic plan and capital budget should
be consulted
6. Must be realistic
7. Type and cost of support services the
vendor has to offer
8. Cost of regular maintenance and how
often
9. Training programs can help overcome
barrier
10. flexible
Due diligence- process where purchases assure
themselves of benefits of technology and
vendor's financial stability

Pharmacists are required by law to use

reasonable methods to ensure that protected
health information remains confidential.
Firewalls- combination of hardware and
software; protect computer systems from
undesirable access

If it isn’t documented, it didn’t happen

Documentation- necessary in any well-designed
information system and therefore should promote
efficient documentation

The director of pharmacy should consider the

products' vendors; good reputation and referrals
are essential.
Installation planning- suitable for organization’s
needs yet realistic for vendor
Vendor- responsible for system design;
installation, education, training is done by
organization

CHAPTER 7: ENSURING QUALITY IN

PHARMACY OPERATIONS
Quality of Medical Care- evaluation of the
performance of medical providers according to
the degree to which the process of care increases
the probability of outcomes desired by patients
and reduces the probability of undesired
outcomes (US Office of Technology Assessment)
 Degree to which health services increase
the likelihood of desired health outcomes
and are consistent with current
professional knowledge Institute of
Medicine
Pharmacy quality is measured through:
Structure- raw materials needed for production
Process- method or procedure used
Outcome- end result