There is so much more to managing inventory than just placing an order and getting products on shelves and then sold. A hospital’s inventory can provide anywhere from 20%-30%+ of revenue for the hospital, but on the flip side, inventory costs are the second highest (if not the highest) expense in a veterinary practice. What does this mean? If not managed appropriately, inventory costs can quickly spiral out of control and eat into the practice’s profitability very quickly.

So what does that mean for someone who’s managing inventory?¬†


This means that in addition to placing an order, we must look at other tasks and processes to make sure we maintain efficiency and profitability within our hospital. But how can we know where to start?

Great question!

The first step is to not get too overwhelmed! If you just started managing inventory, or you have realized you have work to do, there may be a lot running through your head and you are not sure where to start. That is okay (and pretty normal if you ask me!). Just realize that transforming your inventory system is not an overnight process, and may take months, if not longer to get everything running as it should.

Start with a little chunk at a time. Does your practice management system need to be updated? Is your inventory list out of control?

  1. First, print off a list of your inventory, and go through your list with a fine-tooth comb. Are there any duplicate items? Inactive them, and move them to an “Obsolete” category. Are all of the items in the correct categories? Do you have items in categories that don’t make sense?
  2. If you have 97 types of ear medications, and 49 types of non-steroidal anti-inflammatories, this could be costing you in indirect costs! It is best to have a primary product, and maybe a secondary or two (all special orders should go through an online pharmacy). Have your doctor (or doctors) go through the list and narrow down the products they would like to carry. I know that sometimes they wish to carry every possibility for every situation, but that can be expensive for the hospital!
  3. Organize, organize, organize! In addition to organizing your practice management system, make sure your shelves are organized with a system, and that you have created central storage for overstock and other hospital supplies.
  4. Next, think about the last time everything was counted. Can’t remember when? I would recommend counting everything in your inventory and updating your practice management system for the accurate quantity on hand. This is best done when you are closed, and no inventory is being used or dispensed. Also, if you are a large hospital, check with the management team about hosting an “inventory party”. Maybe the clinic closes a bit early, or the staff comes in on a Saturday. You can provide lunch or delicious snacks, and give everyone a counting assignment, and everyone pitch in!
  5. Once items have been updated with the correct quantity on hand, I would recommend adding more information to your practice management system, ensuring the markup, package quantity, reorder points, etc are entered for each item. If you have an extensive inventory system, you could break this up by focusing on the products that are being purchased when you place an order. So let’s say every week when you place an order, use that purchase order to go through each of those items. Eventually, slowly but surely, you will get your entire inventory system up to date. If you have more time, you could go category to category.

Just remember that this is not an overnight process, it takes time and patience. It will probably be frustrating. But, just keep in mind that I am here if you have questions, and our inventory management group is AMAZING at answering questions and helping other members out!

Are you interested in performing an “inventory check-up” for your hospital? I have a FREE downloadable, PDF printable that you can use to rate your inventory system. Use the scoring system to decide which areas to focus on, and make a plan of attack! Click¬† HERE to download it!

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