Ever wonder how to best prioritize your time spent doing inventory?
I understand that throughout the day, the number of projects, patients, and tasks can seem overwhelming. How can you know exactly how best to manage your time? How do you balance and find the time to managing inventory between your duties as a technician or practice manager?
There are 10 tasks that should be prioritized every week to maintain a high functioning inventory system. These tasks can be scheduled into your day or week to ensure they get completed. It is important to note that it is critical to take time out of you week to devote time to these tasks. Inventory is the second highest expense of a veterinary hospital, so proper time allocation for inventory management is critical!
Prepare ROP Report
One of the most important parts of managing inventory is, of course, preparing a reorder point report and then placing an order. By optimizing your practice management system and implementing reorder points (The inventory level of a product at which additional product is ordered- an ABC analysis is a quick, easy way to get them set up) you order process can become more efficient and save time. Although it is still helpful to have a “want book”, or reorder tags, or another process in place to determine if additional stock needs to be order, by automating this process you will no longer have to go through ever item in the hospital to see if items are low. In addition to not having to keep tabs on every item in your hospital, it will be a checks and balance system to ensure items are never out of stock (or at least minimized as much as possible).
First off, what is cycle counting? Cycle counting is one of the best ways to know exactly what is “on hand”. It is a system where items are counted on a rotating basis, based on the frequency of use. For example, some items are counted weekly, some monthly, and some twice yearly. Not only does this give you an accurate picture of what’s truly on hand, but it makes the end of the year counts much easier because the entire inventory has been counted numerous times throughout the year. Cycle counts are also very important because they allow you to notice if items are off count much quicker, and then you can find a solution before it turns into a much bigger problem (ie. theft, damage, miscounting, etc).
Have you wondered how to keep track of hospital supplies that aren’t invoiced to clients? One of the ways to solve this conundrum is by variancing all hospital use items. For example, when a box of syringes is opened or sleeve of white gauze is used, it is removed from the inventory by a variance. In AviMark, a popular practice management software, you can remove inventory items by assigning a code to it. For example, it can be removed due to expiration, damage, hospital use, or updated to match a physical count. It is important to not only enter variances on a regular basis, but to monitor them to notice and analyze trends that might be happening in your inventory.
It is important to consistently audit prescriptions to ensure the correct product, quantity, and strength is being dispensed on a consistent basis. Additionally, it’s important to ensure the proper lot number and expiration are either tracked in the practice management software or properly marked on the patients prescription to go home.
Adjust Hospital Usage
Similar to monitoring variances, it is important to continually adjust your hospital usage to ensure your practice management software accurately shows what is currently “on-hand”. Adjusting hospital usage can be done several ways, and it all depends on the flow and requirements of your hospital. It is important to note though, that it usually isn’t best to add it to a hospital account and “zero” the charge. This will inaccurately reflect your sales reports and other reporting features, which is why it is recommended to adjust hospital usage by variancing the items.
One of the more important tasks you can complete on a weekly basis is projecting your expenses. This can mean several different things; setting your budget for the time period. Whether that be weekly, monthly, quarterly; however you have your budget set up, it is important to project expenses. This can also mean setting up your budget for success. For example, you can forecast if you will need to be purchasing new equipment, or if flea and tick season is coming up.
Once you have projected your expenses and set up your budget, it is equally important to utilize them. (Need a FREE budget template? Email me and I’ll send you one). Expenses should be updated on a routine, consistent basis to make sure you are staying within the budget for the week and for the month. It is important to review the financial benchmarks and statistics regularly to ensure that negative trends are not happening. With more frequent review and budgeting, you are able to make smaller course corrections as needed rather than drastic measures later.
Receive Purchase Orders
Purchase orders and invoices should be received and entered into your practice management systems within 24 hours of receiving them.
Additionally, they should be reviewed for errors, damages, backorders, and missing items. If any of these are noted, it is important to contact your distributor immediately to get it corrected. One of the biggest reasons for receiving purchase orders immediately is price increases. All items within your inventory should have a markup % so once a cost increase happens, the prices are increased by the appropriate amount. If there is a delay in entering, a large price increase could happen, then it isn’t reflected, and the hospital is losing that income.
This seems like a no-brainer, but it’s important to have items stocked and accessible, so that team members know what’s in stock (ie. they don’t freak out thinking there is none in stock!) and you aren’t over-ordering for that very reason. When I am stocking inventory, I always check my open bottles, expiration dates, things of that nature so I can keep my feelers on everything that is going on.
This is one of my favorites! I love to stock inventory, label things, create an efficient central storage area. It is like a puzzle to figure out the most efficient, time-saving, space-saving way to house all the goods. It is important to keep your inventory organized, especially overstock and central storage, so that a) you know what you actually have on hand and b) team members can find what they need when they need it.
I hope this was helpful in planning out your week. You can also check out the post on my favorite time management tips to help figure out how to do 97 trillion things in an 8 hour day!