Inventory: Get a grasp on the goods

Inventory: Get a grasp on the goods

Managing your practice's inventory can be a tricky business. Order too much, and you've wasted money on products that may never sell before they expire. Order too little and you could take the heat from a doctor who's running low on her favorite antibiotic.

"Inventory management is a time-consuming job," says Carol Schubert, MBA, RVT, CVPM, a Firstline Editorial Advisory Board member and an instructor at the Veterinary Technology Department at St. Petersburg College in St. Petersburg, Fla. "But done right, it shouldn't be frustrating." Below you'll find a list of common conundrums and solutions to ease the pain of managing inventory.

Q. Who should manage inventory?

The quick answer: not the doctor, says Mandy Finnell, RVT, an advisory board member and a technician at Cherokee Animal Hospital in Overland Park, Kan. "Our doctors don't have a lot of spare time," she says. "And we don't want doctors to make decisions about which products to stock quickly. The salesman might talk them into buying a case of something right away. "

Instead, Finnell acts as a filter, speaking to pharmacy representatives first and learning about new products from journals and at continuing education meetings before she decides whether she'll recommend a new product to the doctor. Her criteria: Is the new product better for the client and the clinic?

Nancy Allen, the practice manager at Olathe Animal Hospital in Olathe, Kan., says she divides inventory duties between a few core staff members. For example, one technician handles orders for the bulk of the inventory, including prescriptions. A second technician manages over-the-counter items, a veterinary assistant tracks pet food, and the kennel manager handles shampoos and other kennel-related items. "They coordinate to determine what needs to be ordered," Allen says. "This way, we haven't thrown the entire inventory job on one person."

Q. How can I track my inventory?

Schubert says there are three common approaches to inventory tracking: the tag system, the want list, and computer tracking. With the tag system, you tag a warning item in your inventory that signals it's time to reorder. When you use the tagged item, you place the tag in the inventory manager's ordering stack. (Just make sure you have enough of the product in reserve after the tagged item to last until your order arrives.) The want list operates in much the same way. When you take the labeled warning item off the shelf, you add the product to the want list. Many software packages will also track your inventory—as long as you track recent orders and usage accurately.

Another option, says Ronald Althaus, an inventory management instructor in Cincinnati, is the two-bin system. Start by dividing inventory into A, B, and C items. A items, Althaus says, are the 20 percent of items that account for 80 percent of activity. B items are the next 30 percent of items that account for 15 percent of activity, and C items are the last 50 percent that account for 5 percent of activity. "The goal is to identify which items require closer evaluation and control mechanisms," Althaus says.

Once you've identified your A, B, and C items, he says, you're ready to use the two-bin system. For each A and B item, create two bins. You won't worry about bins for C items, Althaus says, because your C items are low cost, low volume items that don't require close tracking, such as stationary or brochures.

Next you'll divide your inventory into working inventory, which goes in bin 1, and reserve inventory, which goes in bin 2. You'll keep a reorder card at the top of the reserve inventory to trigger a replacement order.