Know the Different Types of Inventory in a Pharmaceutical Industry

In the following write-up, you will learn the main kinds of inventory in the supply chain. The inventory is associated with distribution, manufacture, logistics, and sellers of medical equipment and pharmaceutical industries.

Raw Materials

The experts providing an RFID asset tracking system said raw materials include items and components needed to make a finished product. In the pharmaceutical industry, the raw materials are labels, vials, and active ingredients used in various stages of production.

It is necessary to remember that raw materials can either be a by-product or sourced from some supplier.

Such raw material inventory exists in the manufacturing company only. A trading or service company does not have processing or manufacturing. So, there is no raw material inventory.

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Work In Progress (WIP)

Work in process inventory is processed raw materials. The raw materials reached the manufacturing floor. They are not complete or approved as finished products.

Work in process inventory is the category that has processed but not ready-for-sale items.

Finished Products

Finished products inventory has final goods ready for sale in the market. These goods have passed through all the stages of production. They are also quality checked.

Maintenance Repairing and Operating (MRO)

MRO includes the supplies and items that have no relation to the bill of materials of final goods. Although typical in manufacturing companies, such inventory is also available in certain service companies.

As MRO items are not directly used for manufacturing finished goods, they are not considered inventory items in the books of accounts. They, however, play a crucial role in the daily operation of an organization.

MRO items are used for repair, upkeep, and maintenance of machinery, tools, and other equipment. You know, things that are generally used in production. Some examples are grease, gowning, gaskets, lubricating oil, screws, and bolts.


The experts offering RFID healthcare solutions said buffer inventory is also known as safety stock. They include items kept in the warehouse. They are used for reducing the impact of sudden shocks.

Buffer inventory helps you manage unexpected market shifts that cause out-of-stock situations.

If you have buffer inventory, you can handle a quick spike in demand, labor strike, or delay in transport.


Decoupling inventory applies when several machines carry out the manufacturing processes.

The output of the first machine is fed to the next and so on for processing. The things work seamlessly only when all the machines function in tandem.

A breakdown in any machine can destroy the whole process – that’s when the decoupling inventory comes into the picture.

Decoupling inventory has items kept in reserve. They are processed by a different machine when the previous machine cannot produce desirable output.


Cycle inventory or recurrent inventory has products purchased in huge quantities and daily.

It is specifically useful when the client places an order for many products for an entire year. But they wish to receive the orders every month.

Cycle inventory includes materials used directly for production or is a part of any day-to-day operation.


Transit inventory is items moved from one area to another. Like raw materials sent to the factory or finished products sent to the store.

To track the inventory stated above, one may use RFID (radio frequency identification). Owing to being far more efficient and affordable than barcode systems, it has been an integral part of healthcare in recent years.

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