Underlying Challenges of Inventory Management

I am often asked questions about which vendors have overnight shipping or ways to get team members to write something down on a list because things are running out. Now, don’t get me wrong, these questions are important and they have meaningful steps and processes to help solve them. But, when you are asking these questions, I want you to think about the bigger picture.

“Am I asking the question to apply a bandaid? Is there is bigger, underlying challenge or issue that we must address first?”

Let’s look at some common questions, and what the bigger picture idea here is.

“How much should I spending on inventory every month?” I get asked this question many, many times, and there is nothing wrong with it. First of all, I think it is amazing that inventory managers are concerned about this, and that they care about their hospitals and it’s success. But, what this tells me is there lacks clarity in your hospital. Karen Martin quotes “A fundamental lack of CLARITY is often at the root of inefficient processes, errors, poor decisions, and mistrust across the organization. Worse, it’s one of the reasons why improvement approaches don’t produce greater results and why organizational performance often lags behind desired targets.” What this means is it is critical to have CLEAR expectations, guidelines, benchmarks for how much to order and the amount of monthly budget available for inventory. It is paramount to have clear expectations set by the practice owner and/or hospital administrator to be able to do your job to the best of your abilities. To have ambiguity is easy, it doesn’t require a lot of work, and it’s easier to NOT define something or NOT give it clarity. But, for your hospital to be outstanding and perform at a level of greatness, we must define our roles, our responsibilities, our benchmarks, our goals. Without it, it does you and your hospital a disservice. So what can you do about it? Advocate for your hospital and your inventory! Work together with your hospital management team to set some clear goals, benchmarks, and guidelines for ordering. I would be more than happy to facilitate a conversation and help you get started on the pathway to clarity. 20 years (or even 10), you could get away with avoiding looking at your spending in inventory or payroll, or other expenses. But, in an age where hospitals are being bought left and right by buying groups, top hospitals are paying such close attention to metrics and benchmarks, and the ever-rising costs of providing veterinary care, it is critical to your sustainability and profitability as a practice.

“I want to switch to ______ vendor because they offer overnight shipping.” There are quite a few distributors out there, and all offer different benefits. But, I think if we are looking at a particular distributor for overnight shipping that may a symptom of a bigger problem. If a hospital is relying on overnight shipping for their ordering, and placing multiple orders every week, it may be time to reflect on your inventory system. Sure, super fast shipping is important every now and again, but for the majority of your inventory, it should not be necessary. A system should be in place so that things are ordered in a timely manner, in the appropriate quantity, but it shouldn’t be an emergency. One of the things to look at is relying more on your practice management system, setting up reorder points, and reorder quantities more. Having an established, standardized system will yield SO many benefits in your practice management system! (Need extra help; check out the Inventory Management Policy & Procedure Manual)

“How do I get team members to write in the book when things are low?” This is an ever-present question and struggle with inventory management! (Been there, done that!). If team members are really struggling to write things down in “the book”, I think there are several things we can look at outside of that. First and foremost, I think it is so important to have a company culture that values and understands the importance of inventory. Without inventory, we wouldn’t be able to treat patients, or really have a functioning hospital. At the root of “writing things in the book”, it’s crucial for ALL team members understands just how important inventory is, and how much work & effort you pour into it every single day. As with all company culture, it starts from the top and trickles down. The owner/hospital administration/etc must value you, your role, and the importance of inventory. Second, let’s look at ways other ways of putting together an order rather than just relying on the “want book”. Could your department heads run through their departments and see what is low? Could using reorder points and reorder quantities be helpful? Would using reorder tags help? If we rely primarily on the practice management system and use the reorder cards secondary, and use the want book to help catch things that fall through the cracks… would it help your practice?

These are just some things to think about, and how one roadblock may be a symptom of a bigger problem. Usually, the overarching dilemma is there is a lack of a standardized system, lack of organizational clarity, and a culture that doesn’t support or promote the values to be successful. It is so much bigger than just inventory.

Need help setting up a successful foundation in your practice for inventory to thrive? I want to see you succeed… I’m basically obsessed with seeing you profitable, happy, and successful. Let’s chat and see how I can help you.

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