Packing the volume of knowledge and skills that aspiring dentists need to learn into four years of dental school is a herculean task. Unfortunately, the result is that one major subject area seems to be consistently overlooked—business management.
Over the years I’ve heard a similar refrain from many dentists: “Oh, the things I wish I had known, the headaches I could have saved, the time I’ll never get back!” Unfortunately, when we don’t know any better, we put the puzzle pieces together as best we can.
In the face of so many competing priorities, mistakes happen, and efficiencies are lost. When it comes to purchasing office supplies, dental supplies, and other goods and services, practices often end up in a tailspin, rushing orders and overstocking on expensive supplies. Dental practices seem to continually make rash decisions in the hope that they will keep supplies from running out.
As a result, I see practices that pay more than they should and buy more than they need, and it all takes much more effort than if they just stopped and did things right in the first place. So, here are the critical things the dentists I’ve worked with wish they had known so you can shift your gameplay from reactive to proactive, a shift that will save you some headaches and hard earned dollars.
The Number One Lesson
This brings me to the biggest lesson that dentists wished they learned about procurement and inventory management in dental school.
Unlike revenue, every dollar you save goes straight to your bottom line. To put it another way, every dollar saved in your dental practice is equal to approximately $2.80 in production/revenue. If your dental practice’s rate for a zirconia crown is $1,200 with a profit margin of 35.7%, $428 would fall to your practice’s bottom line.
In many cases, using the right procurement technology and processes can generate that same $428 in bottom line impact on a few orders with a couple clicks of a mouse. Optimizing procurement requires no marketing campaigns, no scheduling or cancellations, no treatment plans, and none of your practice’s valuable chair time.
Get Your Stuff Together—Literally and Figuratively
Have a place for everything, and keep everything in its place. Organizing your dental supplies helps keep costs down and improves efficiency in your practice.
Systematizing your supply closet means a reduction in losses due to expired materials, lower inventory carrying costs, and the elimination of redundant stock stored in multiple locations. But just as important, it can also bring calm to a chaotic dental office, allowing people to easily and quickly find the supplies they need when they need them.
A Little Automation and Communication Go a Long Way
Setting clear, streamlined procurement processes for your dental supplies eases things for your employees, saving them time, effort, and stress, while you save money.
Leveraging a procurement platform designed specifically for people in the dental industry, like Method, with integrated technologies such as barcode scanning, inventory management, streamlined workflows for multi-vendor ordering, budgeting tools, structured receiving processes, and more allows you to leapfrog to cost savings opportunities.
Here are three basic steps you can take today in your practice to begin your journey toward an optimized procurement process:
• Shop before you buy: With a dental procurement platform, like Method, what used to take hours can now be accomplished in seconds. No emails, no voicemails, and no return calls—just market intelligence at your fingertips, with price comparisons from vendors that are only a click away, eliminating any obstacles to checking prices before you buy.
• The order approval process: Having employees submit order requests prior to ordering allows you to better control your budget, review pricing, and ensure quantities are within reason and make sense for your dental practice.
• The three-way match: Suppliers are human too and make errors just like the rest of us. And quite frankly, you may be surprised at just how many. The accounts payable three-way match process ensures that your supplier’s invoice, what you received, and the prices and quantities you committed to on the purchase order match. This guarantees you pay the expected price for the items and quantities you physically received.
Procurement—It’s Not Rocket Science
“Procurement” may sound fancy. But with the right technology and processes, it’s all pretty straightforward and easily doable.
A consistent approach in following the right automated processes sets you up for success. Proper inventory management and intuitive order systems will help you keep control of your cashflow, ensuring you don’t buy too much or too soon.
An Amazon-like shopping platform puts all the information you need to make wiser purchasing decisions at your fingertips, allowing you to buy smarter, faster.
Yes, You Can Negotiate with Suppliers
No, it’s not awkward, and you don’t need high-level negotiation skills. Salespeople like to engage and negotiate. It’s what they do.
Information is the currency in every negotiation. Being tactical and arming yourself with market pricing awareness puts you in the driver’s seat and gives suppliers an opportunity to do better and gain your business, an opportunity most are happy to take advantage of.
Tactical purchasing strategies allow you to leverage the data a procurement platform provides about your buying habits and create a competitive environment that brings even further cost savings.
Getting your stuff together with some simple but important procurement and inventory processes alleviates pressure from your employees and elevates your business, pushing suppliers to elevate theirs, so they can fight for yours.
Smart procurement, done on the cloud, safeguards your dollars and lets you rest assured that your practice has the supplies it needs to efficiently and effectively take care of your patients, so you can build back to better profits and scale, profitably.
Your Turn
Making the choice to begin by shopping before you buy, setting up an order approval process, or instituting a three-way match process can all create value for your business. But making the choice to tackle all three, which can be made simple by utilizing a tool like Method, can provide results that are truly transformational to your bottom line.
ABOUT THE AUTHOR
Mr. Traub serves as vice president of product at Method Procurement Technologies, a dental-specific inventory management and procurement platform custom-designed to enable dental practices and DSOs to embrace procurement best practices through proprietary workflows that minimize disruption for the organization leading to improved cashflow, team efficiency, and financial results. For more information, visit methodusa.com, call (800) 742-2100, or email connect@methodusa.com.
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