Many offices pay higher prices for products because the suppliers provide next-day delivery. When you buy a car, you wouldn’t tell the dealer you only care about the interest rate, number of payments or monthly payment — and, not the purchase price. Similarly, you shouldn’t pay a premium on dental supplies because you need everything tomorrow.
If your primary determinant in selecting a supplier is delivery time, you’re eliminating choice and accepting that you’ll pay much higher prices.
By having an inventory management system, lead time can be factored into a simple formula you control and not something you pay for. Control the variables associated with your order and system, and you’ll be less reliant on any individual supplier. Creating and refining an inventory management system isn’t the most exciting item on a dental office’s to-do list, but it’s financially rewarding and worth the effort.
Implement the following simple practices for an effective system that reduces the likelihood your office will run out of necessary products. It also increases staff accountability and will likely save your practice thousands of dollars per year.
- Identify what you need to control
Identify all items you want to control. Include expensive items, those with a shelf life or large, high shelf-cost items even if inexpensive (e.g., cases of gauze, paper towels).
Create a list of items that are accessible to anyone authorized to take supplies out of inventory, whether it’s the dental assistant preparing a tray, restocking the operatory or the doctor grabbing the just-ordered bonding kit. This can be as simple as a printed inventory-control log in your stock room or comprehensive inventory management software.
- Keep a log and build accountability
When someone takes a controlled item out of inventory, ensure it’s logged every time. Practically, you need to log only a few pieces of information, including item, quantity, date and initials of person taking the product.
People feel more accountable when putting their name/initials on something, so building your team’s accountable mindset when removing an item from inventory is a good thing. This can also help reduce waste
- Know your usage and create order triggers
Many practices order dental and office supplies using the “eyeball” method or worse, the “Oh no, we’re almost out!” method. While use of individual items varies and exact monthly usage can’t always be predicted, certain items are used fairly consistently. These are typically the items used most, so identify them first.
For everything you don’t use as frequently, it’s imperative to know two things:
- How many days from the moment you order from preferred supplier does it take for delivery? Build in time for backorders, shipping delays, etc.
- How many units do you expect to use per day? Be fairly liberal, but reasonable.
Multiply the number of days it takes to receive an order by daily usage; add any safety stock you think makes sense. This is your reorder point or ROP. Once stock gets to this quantity, it’s time to reorder. Make sure to factor in all inventory, including stockroom and operatory cabinets.
Whether you keep inventory in a common stockroom for filling operatory cabinets and mobile carts or grab as-needed, it’s critical to have a system that tells you what you have on hand and when you need to reorder.
Some offices use a simple card system to build redundancy. If your reorder point for A2 composite is seven packs, then place an index card between the seventh and eighth packs in your primary stock. When the seventh pack is removed, the card will signal it’s time to reorder or add to the soon-to-order list.
Keep a small basket next to the inventory-control log for these cards to be placed in as they’re exposed. Whoever is responsible for reordering supplies should check the basket regularly.
Once you build an inventory management system that controls for relevant variables, you can easily and effectively control supply inventories and make any needed changes (e.g., who orders what, how often, from which supplier).
You may prefer to order fewer items more frequently; but be careful of the extra shipping fees some suppliers charge for smaller orders.
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