In conversations with pharmacy directors and supply chain managers from health systems nationwide, a common refrain emerges: they are more focused on managing inventory than providing care to patients. These seasoned professionals, responsible for navigating extremely complex logistical environments, consistently report facing the same challenges.
This recurring issue represents a structural flaw that costs the healthcare industry significantly more than many executives comprehend.
According to a June 2025 survey by Vizient, drug shortages alone impose an estimated annual toll of $900 million on U.S. hospitals, consuming roughly 20 million labor hours. This figure reflects only the direct financial impacts and staffing demands, not factoring in the elevated costs of more expensive substitute medications, emergency sourcing premiums, or the diminished capacity of pharmacists forced to devote hours to workaround solutions instead of focusing on patient care.
Pharmacy teams are effectively set up to struggle under these conditions. They are tasked with overseeing thousands of drug stock-keeping units (SKUs) across numerous locations, all of which involve various expiration dates, lot tracking, regulatory requirements, and storage guidelines. Many of these spaces, such as IV rooms and satellite pharmacies, operate with limited information flow. Meanwhile, healthcare leaders commonly lack real-time visibility into pharmacy inventories, which hampers their preparedness for major disruptions.
Despite being two decades into the electronic medical record (EMR) age, many pharmacy supply chains still rely on outdated systems, manual inventory counts, and fragmented software that does not meet the needs of today’s intricate operations. In times of crisis, teams revert to traditional methods of communication—making calls, checking spreadsheets, and contacting suppliers.
An alarming 75% of healthcare leaders report a lack of full integration between EMRs, enterprise resource planning (ERP) systems, and pharmacy supply chain software. This disconnect leads to visibility issues that can quickly escalate into significant operational and patient care complications.
AI Presents an Ideal Solution
While discussions about AI in healthcare often focus on clinical decision support and predictive diagnostics, its application in supply chain management may be both a more logical fit and more urgent. AI excels in scenarios that involve well-defined, data-heavy, repetitive tasks, particularly those that surpass human processing capabilities. A pharmacist juggling 50 simultaneous drug shortages while managing thousands of SKUs across various care environments isn’t failing; they are simply being asked to manage complexities beyond human capability without the necessary support of advanced automation and AI.
How AI Can Transform Pharmacy Operations
AI is gaining traction among leaders in hospitals and health systems, particularly in pharmacy and supply chain management, because it effectively addresses everyday challenges.
In hospital pharmacies, for example, automated inventory monitoring and replenishment are becoming vital tools. Through continuous tracking of stock levels, AI can detect risks of depletion and initiate orders proactively to prevent shortages. RFID technology facilitates real-time inventory visibility, removing the reliance on manual counts and enabling a smoother replenishment process that won’t leave staff scrambling in search of supplies.
Additionally, AI can significantly enhance demand forecasting. Seasonal changes, population health trends, and census variations all influence pharmacy usage patterns. AI models trained on historical data can forecast demand shifts well in advance, enabling proactive sourcing rather than urgent, last-minute purchasing.
One of the most overlooked AI applications lies in compliance monitoring. The Drug Supply Chain Security Act mandates strict traceability for all prescription medications. Ensuring compliance across countless SKUs and multiple locations is nearly unmanageable through manual processes. However, AI can identify potential serialization gaps, discrepancies at the lot level, and diversion risks that might otherwise go unnoticed.
The Necessary Foundation for Success
For AI to function effectively, a clean and unified data infrastructure is essential. This is where many healthcare AI initiatives falter. Supply chain data is often siloed across various systems including EHR, pharmacy information, ERP, and warehouse management tools. When these systems lack a shared data model, it becomes impossible for AI to operate meaningfully. Successful health systems have found that the first step in adopting AI is integrating fragmented data systems into a cohesive environment that allows for effective machine learning. This entails standardizing item listings, harmonizing location data, and establishing a single source of truth regarding inventories.
Organizations that have invested in this foundational work report a shift away from constant firefighting toward more structured supply chain management.
The Real Opportunity Ahead
While the journey toward AI adoption in healthcare may be challenging, its credibility will grow not through flashy promises but through systematically eliminating the friction that burdens clinical teams. Automating operational processes reveals real value.
When pharmacists can transition from manually tracking shortages with phone calls and spreadsheets to receiving automated notifications with actionable insights, that represents a significant improvement in efficiency. Likewise, when supply chain managers gain real-time visibility into inventory across all care settings rather than discovering deficiencies post-factum, it fundamentally alters decision-making capabilities.
The impact on labor is noteworthy. The annual 20 million hours dedicated to managing shortages equate to around 10,000 full-time equivalent positions. Capturing even a portion of that capacity would allow health systems to reallocate clinical expertise where it is most valuable and enhance workforce skills.
Ryan Rotar serves as the vice president of healthcare market strategy at Tecsys. With 25 years of experience in optimizing supply chain operations, Ryan has held various roles, including directing ERP solutions and leading supply chain management for UNC Health in North Carolina. His journey, starting as a surgical technician and radiology systems administrator, has fueled his passion for innovation in supply chain management and staff development.
