Inventory management doesn't have to be difficult. It represents approximately 20% of revenue in the average healthy practice, and it impacts practice value dramatically, especially if it's not managed well. There are many proven resources available and your distributor suppliers are in the business of managing inventory. They know how to do it and they are willing to help you do the same. Work with them to identify the right person on your team to take charge of your inventory. Establish targets for purchases each week, based upon the previous week's revenues, and use your practice management software to streamline and automate the process.
Set reorder levels to alert you of the time when additional inventor is needed. Those levels are:
Reorder Level = Lead Time in Days × Daily Average Usage
In other words, if it takes 3 days to receive new inventory, and you use 5 units per day, then your reorder level is when you have 15 units + a safey level of inventory that you want to keep on hand just in case reorders don't go as planned. Your practice management system will allow you to set reorder levels and alerts to tell you when to reorder. Use it!
Remember, inventory and labor account for about 60% of revenue, so it's very worthwhile to put resources towards managing them well.
