Medical supplies are essential to the practice, so you must keep sufficient quantities on hand. Sounds simple to someone on the outside looking in, right? But, as you know, it’s not.
Financial constraints have physicians questioning every expenditure – and because many items have expiration dates you don’t want to over order.
What’s a conscientious medical office manager to do?
Here are tips to help you manage inventory control and purchasing at your practice.
Keeping track of supplies
The term “inventory control” is a bit of a misnomer because you can’t actually control inventory. People need supplies when they need them. What you can do, however, is manage inventory in order to ensure you have adequate quantities available.
Depending on the size of your practice, and the number of supply items, this may require utilizing a computer-based inventory system. These systems often use bar codes. Because there are numerous products on the market, you will want to assess your needs carefully and then find systems that meet your requirements.
If you decide to go this route, be sure to ask for a demo and the names of other organizations using the product – preferably medical practices. You’ll also want to inquire about any annual maintenance fee and what kind of support you get for the fee.
Finally, be sure to ask about software updates, which are often called new releases. While having access to the latest and the greatest may seem like something you want, updates that involve too many changes may present too many challenges, especially for a busy office. The downside of not implementing updates may be lack of support for the product you originally purchased. You’ll want to be clear on this issue before moving forward.
Of course, if the supplies for your practice are housed in a single closet or cabinet you won’t need such a sophisticated system. Instead, you will keep track of supplies using manual systems, office procedures, and smart purchasing agreements.
Getting organized
It helps to categorize supply items prior to physically organizing them by creating a supply list. One way to do this is by using three categories: administrative, general, and clinical.
Administrative supplies include items like stationery, insurance forms, pens, and clipboards. General supplies include tissues, paper towels, soap, and similar items. Clinical supplies include alcohol swabs, exam table paper, latex gloves, and other such items.
Once supplies are grouped by category, you can then determine importance by assigning a subcategory: vital, periodic, and incidental.
A vital supply item is one essential to the practice, like exam table paper and prescription pads. Periodic supplies might include appointment books and holiday cards. Incidental supplies are items like staples and paperclips.
Storing supplies
Proper storage helps you keep track of inventory. It also prevents damage and deterioration. With this in mind, adequate space is essential. Paper products should be stored flat, in original packages or boxes. Envelopes with gummed flaps and labels should be kept dry to prevent them from sticking together.
Clinical supplies should be stored separately from office supplies. Sterile supplies must be kept sterile. Meanwhile, chemicals, drugs, and solutions should be kept in a cool, dry place unless refrigeration is required. Clinical refrigerators should be used for clinical supplies only – not for food items.
When storing supplies, pay attention to expiration dates and rotate older items to the front so they get used first.
Implementing procedures
If you are using a manual system, each supply item should have an inventory control card that is kept with the item. Each card should include quantity last ordered, date the order was received, vendor name, and recommended reorder point (item quantity). Ideally, inventory control cards will be brightly colored so it’s obvious if one is missing.
You will want to duplicate these cards or keep a separate office file with the same information.
Once you have set up a method to keep track of supplies, you have to use it. This requires taking inventory on a regular basis. Depending on the level of activity at your practice, this may involve a quick check of supplies on a weekly basis or taking a more detailed look at inventory once or twice per month.
Regardless of your inventory process, one step is essential to inventory management: a supply request procedure. It is impossible to keep track of supplies if everyone has access. Therefore, one person must be in charge of supply requests and order fulfillment.
Establish a procedure for requesting supplies, and put it in writing. When introducing the procedure, explain that it has been created to maintain adequate inventory of supplies essential to the practice, eliminate costly rush orders, and keep expenses under control. If you take this approach, you’re likely to get buy-in from office staff and medical professionals.
Making the most of purchasing agreements
Attention to inventory, using computerized or manual systems, won’t completely eliminate the occasional need for a rush order. But smart purchasing agreements may eliminate rush charges.
When obtaining pricing, ask vendors about quantity discounts with bill-as-ship arrangements. By purchasing in volume, you obtain better pricing; entering into a bill-as-ship arrangement, you don’t incur upfront costs. As important, you have products available that you can release as needed.
Before entering into an agreement, find out where the company’s warehouse is located and how many days it takes to receive an item after you have requested it. Whenever possible, negotiate shipping and handling charges as part of your purchasing agreements as these fees can significantly increase product cost.
There are advantages to working with local vendors, especially if product warehouses are also local. Building relationships within the community can benefit the practice. Nevertheless, because there can be substantial differences in prices, it pays to get multiple bids.
Don’t overlook the Internet when looking for product sources. Many online companies offer great customer service and excellent prices.
Group purchasing organizations (GPOs) are another option. When you join a GPO, you get to take advantage of collective buying power, which theoretically translates to lower prices. The potential downsides are upfront or hidden fees and limited product brands.
No matter your purchasing source, make sure you’re comparing apples to apples as far as products, and be certain you’re taking everything into account when comparing pricing. Does one resource offer a sizeable discount for prepaid orders? Does another have prices that are almost as good but with payment terms of 90 days? Which arrangement would be most beneficial to the practice?
The bottom line
Inventory management and purchasing are essential tasks that require careful planning and attention to detail, as well as financial skills and the ability to negotiate.
Although purchasing manager may not be your official job, it is an interesting aspect of your job – and one where you can make a contribution to the practice and its bottom line.
