The time between initiating an order and receiving the products at your pharmacy is known as lead time. Factors impacting lead time include supplier processes, distance from supplier, and product availability. Some suppliers share frameworks on delivery times. Others provide platforms for tracking your order as it goes through internal processes. Transparency can help you manage your customers expectations. The further you are from suppliers, the more likely you will experience longer lead times. A shortage of products can lead to challenges when it is back in stock, as many people may place orders simultaneously, leading to longer lead times.

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Customers may become frustrated when they miss the products they are looking for. The experience may damage their perception of your pharmacy. Research shows that a frustrated customer badmouths an establishment to more people than a satisfied client praises an organization. Community (retail) pharmacy in Kenya is highly competitive. In the age of social media, unhappy customers can exponentially magnify their negative perceptions if they decide to use the internet to vent their frustrations. Your pharmacy may experience a downturn in client numbers due to such occurrences. Losses may multiply if the customer purchases regularly and shifts loyalties to another pharmacy.

Reduce lead times by building multiple supplier relationships per product whenever possible. Consider how long each supplier takes to deliver. Do they offer a tracking platform that allows you to follow up on your order status independently? Do they have an express delivery option when your customer needs a product urgently? Are they willing to use their network to get the products when they are out of stock to minimize inconveniences, for example, when you have an account with them? Do they have a culture of continuously improving their systems? Do they take on your feedback? How fast can you reach them when you need their services?

Lead time = Order Delivery Date – Order Request Date. In Kenya, lead times can be as short as hours or minutes to days depending on various factors, including your pharmacy’s location from the supplier. Lead times can kill your profits when you stock more products to prevent stockouts due to prolonged delivery periods. The decision can negatively impact your cash flow as money is in stocks. Changes in market trends can mean overstocking, which can lead to losses from expiries. Such losses reduce your pharmacy profits. Work on your internal processes to limit the elongation of lead times due to factors under your control.

Long lead times can mean you need to increase capital investment. Optimizing your ordering process means reusing the same money several times to generate profit. You will improve your cash flow to buy the required products. The contrast is using additional capital to purchase products because cash is held in stock on the shelves for long periods. Create a process for counterchecking lead times regularly to optimize your pharmacy’s profits. Ask questions critical to shortening lead time when choosing suppliers to work with. Lead times are a valuable lever in maximizing your pharmacy profits.