What Is Dental Inventory Management And Why Is It Important?
Inventory management.
The mere mention of it strikes terror into the hearts of dentists and dental nurses. Does this sound familiar?
Maybe it brings back nightmares from your high-school or student cashier job when you had to spend endless hours marking prices on store items and making sure shelves were well-stocked.
Or maybe you see inventory management as a dull, insignificant, menial task that drains your energy and makes you feel drowsy, cranky, ill-humoured - or all of the above.
So let’s admit it: inventory management is not what lured you into dentistry.
But are you allowing inventory management to be a more painful process than it needs to be?
When it comes to inventory management and ordering, most Australian dental practices end up in a tailspin. And let’s be honest, few practices really see the value in it. Inventory management is often ignored for the illusion of speed.
Staff members take what is needed from the stockroom, when it is needed, thinking that is the right way to improve productivity and make patients happier.
Don’t get us wrong. We are not blaming you. We know you’re so busy trying to deliver optimal oral health that inventory management is the least of your worries.
You may want to declutter and organise your stockroom, but you have bigger fish to fry. Nevertheless, neglecting inventory management is an approach that can cripple profits and productivity.
According to Dentistry Today, many dentists wish they learned more important lessons about inventory management in dental school. They claim that dental practice ownership is not a course taught in dental school, where they could only learn half of what they need to be successful dentists.
Have you discovered that your degree didn’t prepare you for the business side of dentistry?
Hopefully, this post will save you some headaches. Let’s drill down a little further and see what inventory management actually is and how effective inventory management makes everybody’s life easier - you, your team and ultimately, your patients.
Table of contents:
1. What is dental inventory management?
2. Why is dental inventory management important?
1. What Is Dental Inventory Management?
Put simply, inventory management refers to the process of ordering, storing, and using the items you need for your everyday operations and procedures.
Accurate inventory management allows you to identify which and how much stock to order and have the right materials in the right place at the right time.
Before you use it, inventory ties up cash. Once used, it becomes revenue. That’s why excess inventory costs your practice’s money and reduces the bottom line.
The three basic steps of dental inventory management include:
Ordering inventory and getting it delivered
Storing inventory in the stockroom until needed
Profiting from inventory by using it for dental procedures
One key metric to measure inventory management success is inventory turnover (the number of times inventory is used in a specific time period). To calculate the inventory turnover ratio, you need to divide the cost of used items by the average inventory for the same period, meaning that:
Inventory Turnover Ratio = Cost Of Used Items ÷ Average Inventory
The golden number for a dental inventory turnover ratio should be between 5% and 8%, indicating that you use items and restock your inventory on a monthly basis. On the flip side, a bad inventory turnover is between 13% and 16%, while average is between 9% and 12%.
Luckily, traditional inventory management based on manual counts has been largely phased out by technologically advanced systems designed to make inventory processes much quicker and easier. But that’s not the case with the dental industry.
Despite evolving technology, 95% of Australian dental practices still use pen-and-paper spreadsheets, Excel, sticky notes, whiteboards or don’t track inventory at all, which is a time-consuming, redundant, and prone to errors process.
As a dental professional, inventory management may not be your idea of a rollicking good time. Still, we guarantee you that a stock management and ordering system specifically tailored for the dental industry will eliminate thorny challenges and take many tedious inventory-related tasks off your plate.
The days of pens, papers, spreadsheets, inventory counting assignments, endless stacks of boxes, and the dreadful “just-to-be-safe” recounts must come to a close in the Australian dental practices.
If you're still embracing the old-fashioned approach to inventory management, it’s time to shake things up and improve your practice’s time management and profits.
2. Why Is Dental Inventory Management Important?
Effective inventory management is critical to the smooth running of your dental practice.
Inventory management is that seemingly menial yet necessary task that can make the difference between sabotaging your practice's budget and time management and keeping them in check.
Here is why effective inventory management is the cornerstone of a successful and productive dental practice:
Accurate order tracking
Imagine this scenario: you place an order, but the product you’ve ordered is kept on backorder, and you can’t track it. Or just as bad, the supplier ships the wrong item or invoices you twice without you spotting the errors.
This isn’t an uncommon story if your dental inventory is poorly managed. On the other hand, great inventory management helps you avoid purchase order mistakes and get the right items at the right time.
FYI: A stock management and ordering system like Invedent allows you to track backorders and gives you access to a product list with the latest products from all manufacturers, so you can save time by having everything in one place. The system also allows you to spot errors (e.g., if a supplier invoices you twice for the same delivery) and track inventory across multiple locations.
Improved time-management
Effective inventory processes help staff members increase their personal productivity and free up time for more meaningful tasks around the practice, minimising time spent counting and controlling items available in the stockroom.
A well-managed inventory saves time and improves efficiency as the staff members know exactly where the items are located in the stockroom.
FYI: An automated inventory management and ordering system saves you a bunch of time on stock operations. Instead of manually counting items, the system scans stock in and out and lets you know exactly where items are placed on the shelves. For example, Invedent comes with QR code labels so you can quickly identify the items you need and pick them up before starting your workday.
Increased revenues
Wasted, expired items and lack of items can all stall the progress of a busy dental practice and negatively impact the bottom line and profitability. Overspending your budget can spell doom for your dental practice - and this is exactly what effective stock management helps you avoid.
When your inventory is managed efficiently, you know precisely what to order and when to order so you can avoid overstocking on expensive supplies in the hope you will keep them from running out.
FYI: Automating and simplifying your inventory processes will work magic for your practice’s bottom line. For example, Invedent was specifically designed to help you shop around for the best prices so that you can manage spending responsibly. Better still, the system gives you full visibility into your stock levels and accurately predicts demand, meaning that you will never have to throw expired stock again or waste money on unused stock.
Conclusion: Every dental practice across Australia navigates the same challenges daily: Ordering from many different suppliers, tracking orders, saving time on stock processes, improving cost-efficiency, tracking budget, and so forth.
That’s why inventory management is a core function of your dental practice. With adequate stock and ordering processes, you will wave goodbye to stale, expired, or missing inventory, inaccurate inventory levels, low levels of critical supplies, and considerable team efforts spent in counting and reordering stock.
Staying on top of your inventory helps you create a more peaceful work environment, improve the workflow, and manage your budget more wisely.
Want to take the dread out of your inventory process? Then make a difference today! Give Invedent a chance to help you out and see how a simple, user-friendly system can improve your practice’s time management and profitability insanely fast. Start your 30-day FREE trial with Invedent now - You have absolutely nothing to lose!
