Running a successful dental practice requires strong clinical skills and effective practice and people management. Hiring and training staff, marketing to new patients, and effective procurement all play a part in the role of practice owners and managers.
An often-overlooked, crucial aspect for independent dental practices is supply purchasing, which can have a significant impact on the overall success of the practice. But why is supply purchasing management important to practice success? And, what areas should the focus be on?
The Cost of Poor Supply Purchasing
The prices and availability of lidocaine and impression materials, current and future prices, and what the practice across town is paying for the same items are often overlooked, but they impact a significant portion of the dental business. It is recommended to budget 6% of revenue for dental supplies; even a 1% overspend can have severe budgetary implications.
Direct Costs: Dollars
Inefficient dental supply purchasing translates directly to unnecessarily high costs for practices. Without proper focus and the right approach, practices can easily end up overpaying for supplies, missing out on volume-based discounts, and failing to recognize when your vendor rep’s quoted prices are no longer competitive. The infamous “price creep” begins: supply costs rise slowly enough to subvert notice, but over time end up costing the practice a lot.
Results of poor procurement processes:
- Overpaying for supplies
- Missing volume discounts
- Lack of insight into competitiveness of quotes
Indirect Costs: Time, Efficiency, and Experience
Larger supply bills are the most obvious problem with an inefficient approach to supply purchasing. However, it’s not the only problem. Arguably, it’s not even the biggest problem.
1. Time Wasted on Manual Ordering
A manual and inefficient approach to supply purchasing can take up a significant amount of time. Dentists and office staff may spend a lot of time searching for supplies, finding alternate options for back-ordered items, and dealing with multiple vendors with different purchasing processes and requirements.
Tackling invoices one at a time, with different terms and payment approaches, adds on to the time spent on ordering.The more time spent on administrative tasks is less time spent on patient care, staff training, or any other activity.
2. Staff
Manual or inefficient approaches to supply purchasing can take up a significant amount of time, consequently creating unnecessary hassle for the team. Hassles related to supply purchasing can lead to unnecessary stress and lower job satisfaction among staff members.
3. Efficiency and Patient Frustration
Inefficient dental supply purchasing seriously disrupts a practice’s workflow and patient obligations. If necessary supplies are not on hand when needed, patient treatment can be interrupted or delayed.
For instance: backordered supplies. Backorders create administrative headaches, unnecessary delays, and potential revenue loss. The same supplies may be in stock with other vendors, but the manual research to procure dental supplies at the last minute is impractical. Postponing patient care because of backordered items creates frustration and a worsened patient experience.
Overall, inefficient supply purchasing can lead to a range of problems – sizable bills, wasted time, disrupted practice workflow, and potentially compromised patient care. Dental practices need to prioritize efficient supply purchasing to mitigate these risks and improve practice success.
Improving Dental Supplies Cost Management
With numerous challenges stemming from inefficient supply purchasing processes, dental procurement strategies are needed to create efficiency and increase profitability.
Benefits of an efficient dental purchasing process:
- Increased direct profitability through cost management (hello, <5% of production!)
- Time and resource efficiency through staff responsibilities
- Higher job satisfaction and engagement of staff members
- Smooth and uninterrupted patient workflow and productivity
Here are some items to consider when optimizing procurement processes.
Audit Dental Inventory Management
An important first step to gaining control and efficiency of ordering is taking stock of what the practice has, what is used, and what’s needed.
Ask these questions:
- Are there boxes of unused supplies sitting in a forgotten corner of the supply closet?
- Are there multiple different products that serve the same purpose?
- Are certain products consistently running out?
Creating or refreshing inventory lists – with preferred brands and amounts – to be purchased weekly, biweekly, or monthly can go a long way to helping a practice better manage inventory and purchasing.
Explore Cost-Saving Techniques
Negotiate
Dental supply companies can lack transparency into pricing. Oftentimes, dental reps quote high. The good news is that everything is negotiable. Comfort with negotiation, purchasing volume of the practice, and the vendor relationship all play a part in this process.
Explore Alternate Suppliers
Most items dental practices purchase are not vendor exclusives – price-check other sources to see if the practice can get better pricing.
Bulk Purchasing
Pre-purchasing in bulk can drive volume discounts. This can help practice profitability; however, it may also limit monthly cash flow. Other considerations are storage hassles and increased risk of products expiring before they are used. Overall this can work, but it’s a tradeoff.
Approaches like exploring alternative suppliers, price comparisons, and bulk purchasing can help lower supply costs. With practices often experiencing staffing difficulties, these solutions aren’t easily implemented in many cases.
Technology-Driven Centralized Purchasing: The Biggest Cost-Saver
Working harder to improve supply purchasing and practice profitability can work, but working smarter is a lot easier. The dental industry is evolving rapidly to embrace some of the professional software tools that modernize business functions like purchasing.
Typical practices order from 5-8 different distributors and brands for their general and specialty products. With that many vendors, creating and updating inventory lists manually becomes a chore. Dealing with several individual vendors and trying to keep costs under control while ensuring the practice gets the right products on time is a big ask.
Instead, consider using a professional ordering platform that centralizes all ordering and payments in a single place to boost your practice’s efficiency and profitability.
A centralized ordering platform also helps diversify suppliers and reduce risk, without added vendor relation responsibilities. This way, a practice is not tied to a single vendor’s catalog, pricing, product availability, or responsiveness of the sales rep.
Use Torch Dental to Boost Profitability
Efficient dental supply purchasing is a big contributor to practice success and profitability, and we at Torch are obsessed with this problem so that you don’t have to be.
With Torch, your practice can easily get preferred products at industry-leading prices, with all product ordering and payments done in one place (check out how Garden City Dental Center saves 22% annually by using Torch Dental).
Ready to save? Schedule a demo today.
