Does trying to get control of your practice’s inventory of medicine and supplies give you a headache—and lead you to stash (and raid) your own supply of aspirin? From the stocked-but-lean balancing act to dealing with drug shortages, mastering inventory management is a challenge. Here’s how some practices are getting it right:
1. They hire an inventory manager
With a dedicated inventory manager, your practice has one set person to go to with inventory issues. This makes for less confusion and fewer errors (like doubl-ordering) than are likely when all team members share inventory-related duties, says Monika Schultz, inventory manager and supportive care director at Broad Ripple Veterinary Management Solutions in Indianapolis.
Schultz disagrees with the practice of splitting the position with that of, say, a credentialed technician. “That’s not what those staff members went to school for,” she says. “You’re asking them to set aside their valuable skill set to perform a task that they, no doubt, don’t enjoy doing.”
2. They pay attention to billing
“A good inventory manager knows what the hospital will use in a given month’s time and when the bills are due,” says Amanda J. Morris, MBA, practice manager at Care Animal Hospital in Muncie, Ind. “Many companies have payment policies that let hospitals have up to 55 days for payment,” she says. “You just have to know when the dates fall so you can place your order appropriately.”
With one company, Morris places one large order on the first of the month based on orders from the previous year or month. She then has until the 25th of the following month to pay the bill. “If I’ve done my job correctly, we’ll have sold that inventory before the bill is even due,” she says.
3. They order systematically
“Reorder points automate the inventory process wonderfully,” says Mark Opperman, CVPM, owner of veterinary consulting firm VMC Inc. in Evergreen, Colo. “When stock of an item depletes a certain amount, you order more—that’s the reorder point.” And once you know your reorder point for an item, he says, you can set up a reorder quantity.
For Melissa Mauldin, business manager at St. Cloud Veterinary Center in St. Cloud, Fla., reorder points help her hospital stay stocked but lean. “I use software to set reorder points and run reports that tell me when I need to reorder items,” she says. “My reorder points are determined by past purchases. For example, if I have purchased 60 of an item in the past 6 months, I set my reorder point at 5 so that I have an average two-week supply in stock, and I set my reorder quantity at 10 so I’m ordering a one-month supply. This gives me time to get an item in, particularly if there’s a problem with the order, and still keep 12 turns per year to maximize our cash flow.”
4. They involve teammates
“Getting other team members involved helps them to see the importance of an accurate inventory system and makes them more likely to pay attention to what they are doing,” says Mauldin. In her practice, for example, keeping the quantities on hand accurate is essential to success—and assigning a team member to count a particular area of the pharmacy or store room helps spread
the work around.
5. They develop relationships
For the past nine years, Caitlin Rivers, a communications specialist with Metzger Animal Hospital in State College, Penn., has relied on one vendor for 90 percent of her practice’s inventory. The reason? “If you buy from different supply houses week to week, it’s much more difficult to find out what’s coming,” she says. Having a tight relationship with one vendor gives her benefits, like getting a warning when an item is about to go on allocation so she can order extra. Strong relationships also save her time and money. “People shop around to save 12 cents on a tube of something,” she says. “I check on high-priced items, but by the time I check prices on smaller products with 12 different vendors, I’ve spent more in payroll than I’ve saved.”
6. They don’t duplicate items
Does your practice carry multiple brands of food, shampoo, or medicines that all do the same thing? “Product duplication complicates inventory and can cause costs to careen out of control,” Opperman says. “You’re better off if the doctors select one or two products for a specific purpose; it will help you standardize purchases and recommendations at your hospital.”
7. They’re high- and low-tech
Practice software can streamline inventory management, but don’t discount low-tech tactics. Schultz uses a reorder tag system: She prints out tags and tapes them to incoming products.
“I put product name, vendor, order number, reorder point, reorder quantity, and the correct location of the product on the cards,” she says. “As staff members use a certain product, they’ll eventually get to the reorder point, which will be signaled by the remaining quantity being taped together with the reorder tag. When they reach the tag, they pull it off and put it in a jar for me. I collect the tags each day and place an order for all tags collected. Then I bring the tags to the kennel assistants who unpack shipments. They match the tags with incoming products and place the tags on the appropriate reorder points.”
Morris uses a card system to keep track of her practice’s lesser-used items like IV lines or casting material. She places cut-up colored card stock with the items, and “when the staff gets down to the card, they can place it in a box or clip it to my order book,” she says. “Then, when I get more product in, I replace the card in the stash of supplies.”
8. They’re hands-on
Even with the benefits of software, Schultz doesn’t rely on it alone to tell her when a product is about to expire or run out. “I take a manual inventory count once a month and check expiration dates as I go,” she says. She also helps team members with restocking, so she’s aware of whether the practice is running low. “Keeping an eye on your inventory is the best way to go,” she says. “Computers make errors. Software has bugs. Our inventory is too important to completely trust to one of these processes. Knowing your inventory is the best advice I can give.”
Erika Rasmusson Janes is a freelance writer and editor in New York City.