5 Simple Steps for Taking Back Control of Your Inventory
If you’re anything like the practices we serve, gaining full control of your inventory is easier said than done. A lot easier. The reality is, the dental industry and standard processes in place don’t make managing inventory a simple task for most practices. But with the right approach, it can be.
Since the beginning of 2016, when ZenSupplies first began, we’ve processed over 3,000 orders and organized more than 35K products. And through our observation and analysis of the 29 clients we serve and their inventories, we’ve never wavered from our core aim: to help practices organize and regain control of their inventory, and save them time and money so they can focus on their patients and providing them with quality dental treatment.
While our product has been increasingly effective in accomplishing this with our clients, finding the best way to break down smart inventory management into as simple a step-by-step process as possible has been a trial and error endeavor, to say the least.
Fortunately though, after more than a year of observing and analyzing practices, and countless brainstorming sessions, we’ve finally managed to fulfill that endeavor. If you want to gain control of your dental inventory before considering implementing ZenSupplies, below are five easy steps any practice can take even without the help of our software and training services.
- Determine your practice’s biggest inventory issues.
What aspects of inventory frustrate you the most? What really drives you up a wall? It could be running out of product while a patient is in the chair. Maybe it’s not having enough team members who know how to place orders. Or perhaps just the amount of time alone it takes for you and your team to fill out and submit orders grinds your gears the most. If you’re like most practices, the list is probably long.
Whatever your practice’s biggest inventory issues are, take the time to go through them with your team and write them out as you do. Then, once you’ve done this, take a consensus to determine your greatest three.
This will provide you with the foundation you’ll need to start painting an accurate picture of your inventory. Furthermore, by identifying these core issues that the lack of an organized inventory process causes, you will also be able to determine your need level for a more robust inventory management system like the one ZenSupplies provides.
- Make a list all of the distributors you buy from.
Once you’ve determined your practice’s greatest inventory issues, the next step is to compile a list of the distributors you work with – yes, even the small guys you only order one specialty product from. The key here is to continue developing a more complete and accurate picture of your vendor relations as it pertains to your inventory.
When we first ask our new clients the question, “How many distributors do you purchase from?”, the most common response we hear is “three to five”. But after going through order history and invoices, we find that in most cases there are far more – often times upwards of 20. This sort of inaccurate picture makes gaining control of your inventory processes incredibly difficult, if not near impossible, as it leads to confusion among staff, and time spent on simply finding the right distributor for a given product. After all, how can you expect to determine which distributor to buy a certain product from if you don’t know you buy from them? From a pure business standpoint, knowing your vendors well is essential to your practice’s success, and will help you in myriad ways in the long run.
- Identify the major distributor you buy from the most.
After hashing out your list of distributors, the next step you’ll want to take is to identify the major distributor you buy from the most (Patterson, Benco, Schein, etc.). In our experience, there are two types of practices: ones who buy products from various distributors fairly equally, and ones who rely on primarily one or two major distributors. Regardless of which one describes your practice more, it’s critical you determine the major distributor you buy from the most.
Once you’ve accomplished this, you’ll need to print out all the invoices you have of theirs on file from last year. This may sound like an excruciatingly couple of hours, but it’s essential to fully knowing your distributor climate. For example, if your primary distributor is Patterson Dental and you buy supplies from them two times a month, you will need to print 24 invoices (typically 3 – 4 pages long each). Within this example, going through 24 invoices should take you roughly 3 – 5 hours. Doing this will not only help you gain a more complete picture of what you’re paying and if there are any price discrepancies, but it will also provide you knowledge you can leverage in the following steps.
- Consolidate products to your primary major distributor OR select 2 – 3 distributors that sell online and set up accounts for easy access.
After you’ve determined a primary major distributor, you’ll want to begin consolidating your inventory with them. Using the information you’ve gathered from steps 2 and 3 and analyzing your invoices from last year (order volumes, product prices, etc.), you can enter into this dialogue with leverage on your side.
If you elect the first option (consolidating to your primary major distributor), start the conversation with your sales rep by stating your situation. “X is the volume we did last year, Y are our expectations for this year, and Z are the prices we’ve found for your products online.” Having done this, then tell them you’d like to consolidate and ask them what prices they can give you.
Naturally, this conversation can be a bit uncomfortable, especially if you have a long-standing relationship with your sales rep. This is where, as a dentist, you will need to make a decision on what’s more important to you: saving 15-20% on supplies, or maintaining your current relationship with your rep. Any good sales rep will respect your decision, and the opportunity to earn your business. But don’t stop there. Use the information you have at your disposal to negotiate pricing, particularly on your more common products (heavy body, fluoride, exam gloves, etc.).
The second option is a bit more straightforward, but isn’t for all practices. However, if you already know that you will be purchasing products from online vendors, make sure you narrow them down to 2 – 3 and confirm following important details:
- Product quality and procurement (authorized dealer, no grey market products, etc.)
- Return policy
- Shipping speed
- Customer service capabilities (call center, order reconciliation services, etc.)
- Where they source products from
- Payment terms – 30 days
If you find an online distributor with significantly cheaper prices but you are unsure about product quality, or more importantly, the credibility and legitimacy of that distributor, don’t order from them. No amount of cost savings is worth risking you and your practice’s reputation.
- Stop autopay on all your purchases.
As soon as you’ve consolidated your inventory or selected 2 – 3 trustworthy online distributors to work with, have your office manager or an assistant contact your current distributors and request that autopay be discontinued with each. Ask for a 30-day net time invoice to be emailed to you. Some may exhibit resistance or pushback, but don’t be deterred. Not only are distributors legally obligated to fulfill these kind of requests, but this step is critical for being able to effectively control your spendings.
In the 3,000+ orders we’ve processed, there have been a considerable number in which mistakes and overcharges occurred. This is by no means an indictment on distributors – we’re all human – but, well…we’re all human. Mistakes happen. Instead, use a more reliable, auditable method, like Chase Bill Pay. In the end, not only will this will help mitigate invoice errors and eliminate the hassle of paper order submission, it will save you hundreds of dollars a year.
By the time you’ve completed each of these steps, your practice will have gained a clearer picture of your inventory, simplified its ordering processes, economized on staff time, obtained better prices, and begun the road toward savings. But most importantly, you will have taken back control of your inventory. Now, just make sure you keep it that way.
Since this is what we live by at ZenSupplies, we have to add a sales plug! If any of these tasks sound too difficult or time-consuming, you can give us a call at 872-225-2ZEN!