Inventory management can be complicated and expensive. Practices need to know if their stockpiles of essentials are adequate. And when it’s time to reorder, which vendors have items in stock, and how much do those items cost? From counting boxes in the supply closet to making phone calls to surfing from site to site, it can be a chore.
Method Procurement aims to streamline the process. Its cloud-based tool compares supply costs from multiple vendors so practices can ensure they’re getting the best deal. It also allows users to place orders from multiple vendors, approve supply requests, track against their budget, and manage their inventories all from a single platform to save time and money.
Additionally, the solution connects dental teams, suppliers, and financial systems on a single dashboard. It provides access to more than 400,000 products from more than 2,000 suppliers in a single workflow. It also notifies dental teams when their own stocks are low to ensure that they are never in danger of running out of critical supplies.
Plus, Method Procurement records what supplies have arrived and where they are stored, while users can verify their condition to prevent disruptive surprises. Practices can use it to enforce a disciplined and accurate payment process while preventing fraud, errors, and overpayments, further saving money as well.
How It Works
According to Dan Traub, vice president of product at Method Procurement, most dental practices don’t pay much attention to the procurement process. As a result, they can waste tens of thousands of dollars each year. Method Procurement aims to improve the bottom line through cost reduction, cost avoidance, management oversight, and team efficiencies.
“In the dental supply world, there are certain manufacturers and distributors that are very prevalent,” said Traub. “About five years ago, we started to look at and become aware of the discrepancies in pricing between these very common dental products.”
Through the dashboard, users can see how much different suppliers are charging for the same products. With this data, users can encourage competitive pricing and favorable payment terms. They also can enter organizations that take advantage of group pricing, identify alterative products, and more.
Cost avoidance strategies enable practices to save money by reducing waste, better managing their inventory, planning ahead to reduce surprises, reducing product variations, defining and enforcing a formulary, and developing a quality review process for new products, especially personal protective equipment (PPE).
Management oversight is key as well as practices create and enforce controls across all procurement processes. Pre-purchase approval and budgetary review processes help, along with tighter payable processes, tracking of free or promotional goods, tracking returns and credits, disciplined receiving, and reviews of detailed spend data.
“So many of our clients we find do not have a great process to approve and review purchases before they are made,” Traub said. “They might have a budget, but the budget is not checked before the purchases are committed. So it’s oftentimes a matter of looking in the rearview mirror, instead of being proactive and planned in your approach to procurement.”
Finally, team efficiencies reduce the effort needed to run procurement processes. Teams can employ online ordering, create published processes, better onboard new employees with clear roles, streamline the reordering cycle, and partner with key suppliers.
“We find that there’s a lot of wasted labor running the procurement process, whether that’s tracking down paper or errors in procurement, or even just checking in the products and knowing sort of what the different team members’ roles are in the procurement process,” Traub said.
The Savings
A typical practice with $1 million in annual revenue spends $225,000 on maintenance and upkeep of facilities , dental supplies, laboratory fees, office supplies, and other business costs that can be negotiated, Traub said. Modest transformations in the procurement process could save $13,500 of those costs, while a comprehensive approach could save $27,000, Traub said.
“We have seen with our clients between 6% and 12% savings with a better managed procurement cycle for those items under scrutiny,” Traub said. Plus, he said, the improved process saves an additional $844 a year at the low end to $5,063 a year at the high end—with even greater savings for multi-office practices.
“We believe with the trend toward multi-locations, this will accelerate,” Traub said. “And not just by multiplying out the number of locations that are impacted, but by really leveraging buying power. If you’ve got five, 10, 20, a hundred practices in your group, you have a whole new scale that you can negotiate with suppliers around.”
And as profit margins are reduced, Traub said, the equivalent production required increases. Unfortunately, practices are now struggling to reach pre-pandemic levels of production. But better procurement processes could replace that missing revenue by a factor of three, Traub said, as $15,000 in saved procurement costs would equal a production gain of $44,118.
“Going through the chair requires a lot of effort, not to mention the dentist’s own effort and the team’s own effort. You’ve got to get the patients in. You’ve got to get the cases seen and converted, and you have to successfully collect,” Traub said. “In this time, where it is difficult to increase production, the natural conclusion should be on the expense side.”
The Platform in Action
“It’s a great tool for us to be able to get to our offices and understand the spend management without being in the office,” said Andrew Tralongo, president of T Management, which has been using the Method Management platform in its seven dental offices in Atlanta and elsewhere in Georgia for about a year.
According to Tralongo, everyone on each office’s team from dental assistants to office managers can use it due to its easy learning curve. It also enables a proactive approach to managing inventory, affordably getting ahead of each office’s needs, instead of reacting to whatever is immediately needed. Its communication capabilities are another advantage.
“We used to have an e-mail chain, and it took forever. Sometimes items were delayed because someone wouldn’t read their emails,” Tralongo said. “Now it’s a push system. An order gets pushed to the office manager, and then pushed to the regional manager to approve it, and there’s notifications if you don’t have it done in a certain timeframe.”
Built-in budgeting is key as well, saving more time and money.
“Before, they were using Excel spreadsheets and paper to track numerous vendors and looking into different accounts. Sometimes human error does occur in those things, so the budget would be off by a thousand dollars, and throughout a year, that adds up,” Tralongo said. “Now it’s all consolidated, and you can see it in real time.”
As a cloud platform, the system is compatible with Macs and PCs as well as tablets and smart phones. One of T Management’s offices prefers to use iPads, Tralongo said, because of their portability. Plus, platform management includes regular software updates as part of its software-as-a-service packages, which is included in your quarterly fee for Method Procurement.
Platform management also includes training as part of the package to help dental practices learn how to best take advantage of the system’s functionality. Its coaches are all located in the United States, they all have experience in the dental industry, and they are available through live chat during standard business hours and access to the knowledge base and resource center 24/7 , Traub said.
“While we built an easy to use platform, we recognize that the human connection is essential to long-term success with any change to your business, particularly something as pervasive as procurement,” said Traub.
“The coaches and trainers have been fantastic. It’s been great for our team, especially since some people are a little more tech-savvy than others,” Tralongo said, noting that T Management took weekly calls with Method Procurement during the training process to discuss what was and wasn’t working with the platform so far.
“That’s how we fixed everything from our team’s side, and that would give us the feedback as to how to tweak what we were doing to be better and more proficient,” Tralongo said.
The Pandemic
These days, most practices are concerned about PPE availability and costs. Traub says that Method Procurement encourages practices to embrace partnering with key suppliers and maintaining relationships with multiple suppliers to ensure access to PPE—and the platform can facilitate those partnerships and relationships.
“Our platform also provides for many suppliers, not all but for many, a real-time look at availability,” Traub said. “It will show you what’s in stock, and what is back-ordered for six weeks without having to jump from one supplier’s website to the next or spending all morning on the phone. You have a sense of what the market is capable of delivering.”
Plus, Traub said, the platform can track PPE once it has arrived in the office and collate data so practices can calculate its consumption rate, enabling them to plan ahead.
Method Procurement also recognizes that many practices are remodeling with new equipment and other physical layout changes to accommodate new infection control protocols, and Traub said that renovations and repairs are on the company’s roadmap. The dental suppliers that Method Procurement works with are expanding their product lines in response as well.
“We will work with any supplier that our clients request,” Traub said. “Then we begin a process with that supplier to pull their data into the platform, and provide that client’s pricing, so it’s a one-stop shop in ordering on the Method platform.”
Related Articles
Reopening and Recovering: Taking Steps Back to the New Normal
Take Three Steps to Make Your Practice Invincible
Three Ways to Reorient Your Staff During COVID-19
