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?
