Panel of Consultants Mary Brookings, RVT Patrick Hennessey Angela - - PDF document

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Panel of Consultants Mary Brookings, RVT Patrick Hennessey Angela - - PDF document

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AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 24, 2011 By

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 1 The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed

April 11 – 24, 2011 By Angela Schneider, CVT

AAHA gratefully acknowledges AAHA MARKETLink/MWI Veterinary Supply for their sponsorship of this webcast.

Panel of Consultants

Angela Schneider, CVT Presenter Las Vegas, NV Mary Brookings, RVT Inventory Management Consultant Goldthwaite, TX Sandy Franzen Inventory Management Consultant Nashville, TN Patrick Hennessey Inventory Management Consultant Portland, OR Mark Smalley Inventory Management Consultant Meridian, ID Jane Kimmes, CVT AAHA Practice Accreditation Coordinator AAHA Practice Consultant Rhonda Sayle, RVT AAHA Practice Consultant Southeast Region

Inventory Management

“In years past, inventory was not a “taught” subject, but more of a “learned” function in our veterinary hospitals. Today, understanding, learning and managing our inventory are all essential actions which support our cash flow as well as greatly affect our bottom line. Observing and following inventory turn times, cost of products, supply and demand and reduction of duplication of products all are segments of inventory we now must be aware of and act upon accordingly. Investing time to gain knowledge of inventory management strategies is a priceless pearl to support the financial health of our practices today.”

  • Rhonda Sayle
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 2

  • 10. They have an inventory leader
  • Committed Time To Inventory
  • Expectations Identified
  • Owners/Veterinarians still hands on
  • 10. They have an inventory leader
  • Committed Time To Inventory
  • Expectations Identified
  • Owners/Veterinarians still hands on
  • 10. They have an inventory leader
  • Committed Time To Inventory
  • Expectations Identified
  • Owners/Veterinarians still hands on
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 3

  • 10. They have an inventory leader
  • Committed Time To Inventory
  • Expectations Identified
  • Owners/Veterinarians still hands on

“The most successful aspect of inventory is to share the plan with all employees. The inventory manager must be a leader, organized, and detail oriented, but can only be as good as those working around them. Once everyone is involved it is sure to be a success.”

  • Mary Brookings
  • 9. They have hospital team

involvement

  • Inventory is an important part of the culture
  • Delegation of responsibilities
  • Accountability of capturing charges and
  • pportunities
  • Open book management
  • 9. They have hospital team

involvement

  • Inventory is an important part of the culture
  • Delegation of responsibilities
  • Accountability of capturing charges and opportunities
  • Open book management
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 4

  • 9. They have hospital team

involvement

  • Inventory is an important part of the culture
  • Delegation of responsibilities
  • Accountability of capturing charges and opportunities
  • Open book management
  • 9. They have hospital team

involvement

  • Inventory is an important part of the culture
  • Delegation of responsibilities
  • Accountability of capturing charges and
  • pportunities
  • Dr. A loses $100 of product in a month. He has a profit margin of 20%, so his selling price is $125.

How must he recover? He must sell $500 in product/month to replace that $100 of lost inventory.

  • Incorporate Compliance Officer/Auditor
  • 9. They have hospital team

involvement

  • Inventory is an important part of the culture
  • Delegation of responsibilities
  • Accountability of capturing charges and opportunities
  • Open book management
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 5

  • 8. They measure to manage

Inventory Data Control – Even the most progressive practices struggle with good data compliance. It is typically a tedious, time-consuming manual process that requires consistent adherence in order to rely on the inventory intelligence capabilities of the practice management

  • system. If compliance is off by just 10% or more, it makes it difficult, if

not risky, to utilize automated resource planning information like re-stock requirement, par-level vs. usage, and inventory aging reports. When we can automate the transactional data capture (similar to what ATM’s have done for banking transactions) and increase this compliance, then we can trust and utilize with confidence the reporting information to optimize

  • ur inventory cost and associated revenue.
  • Patrick Hennessey
  • 8. They measure to manage
  • Forecast and identify seasonal products
  • ABC analysis performed to identify “A” products
  • Prevent having duplicates, identify “C” products
  • 8. They measure to manage
  • Forecast and identify seasonal products
  • ABC analysis performed to identify “A” products
  • Prevent having duplicates, identify “C” products
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 6

  • 8. They measure to manage
  • Forecast and identify seasonal products
  • ABC analysis performed to identify “A” products
  • Prevent having duplicates, identify “C” products
  • 8. They measure to manage
  • Forecast and identify seasonal products
  • ABC analysis performed to identify “A” products
  • Prevent having duplicates, identify “C” products
  • 8. They measure to manage
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 7

  • 7. They build relationships
  • Utilize resources available from vendors (E.g.

websites)

  • Good relationships with rep = forecasting of price

changes and backorders

  • They know billing terms for effective ordering
  • Utilize home delivery options
  • 7. They build relationships
  • Utilize resources available from vendors (E.g.

websites)

  • 7. They build relationships
  • Utilize resources available from vendors (E.g.

websites)

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 8

  • 7. They build relationships
  • Utilize resources available from vendors (E.g. websites)
  • Good relationships with rep = forecasting of

price changes and backorders

  • They know billing terms for effective ordering
  • Utilize home delivery options
  • 7. They build relationships
  • Utilize resources available from vendors (E.g. websites)
  • Good relationships with rep = forecasting of price changes and

backorders

  • They know billing terms for effective ordering
  • Utilize home delivery options
  • 7. They build relationships
  • Utilize resources available from vendors (E.g. websites)
  • Good relationships with rep = forecasting of price changes and

backorders

  • They know billing terms for effective ordering
  • Utilize home delivery options
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 9

  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS
  • They communicate with associates and staff on

product changes

  • Cycle Count
  • 6. They’re hands on
  • They track expiration dates
  • 6. They’re hands on
  • They track expiration dates
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 10

  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS

Indirect Costs

  • Tax
  • Shipping
  • Ordering Cost
  • Holding Cost
  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS
  • They communicate with associates and staff
  • n product changes
  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS
  • They communicate with associates and staff
  • n product changes
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 11

  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS
  • They communicate with associates and staff on product

changes

  • Cycle Count

“Cycle counting is the most effective method to improve the accuracy of inventory by continually measuring it against your

  • fficial recordkeeping system. Accurate inventory records allow

a practice to deliver superior customer service and patient care; which translates into a successful and profitable business. Inaccurate inventory can be the biggest area of inefficiency and revenue loss to any business.”

  • Sandy Franzen
  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS
  • They communicate with associates and staff on product

changes

  • Cycle Count
  • 6. They’re hands on
  • They track expiration dates
  • Monitor prices & COGS
  • They communicate with associates and staff on product

changes

  • Cycle Count
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 12

  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)
  • Know their state’s sales and use tax requirements
  • They are responsible with filling prescriptions
  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)
  • CSOS: http://www.deaecom.gov/csosmain.html
  • Regulatory Compliance
  • What are your scheduled drugs?
  • What are your chemical list drugs?
  • Record keeping
  • Invoices
  • Log books
  • Biennial Inventory
  • Drug Reporting
  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)

“Look into utilizing a reverse distributor when disposing of controlled

  • substances. This is a safe way to return out of date controlled

substances to a government approved company: http://www.rld.state.nm.us/pharmacy/PDFS/reversedistributor.pdf”

  • Jane Kimmes
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 13

  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)
  • Know their state’s sales and use tax requirements
  • They are responsible with filling prescriptions
  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)
  • Know their state’s sales and use tax requirements

www.avma.org

  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)
  • Know their state’s sales and use tax requirements
  • They are responsible with filling prescriptions
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 14

  • 5. They’re Compliant
  • Up-to-date on DEA news (E.g. CSOS)
  • Know their state’s sales and use tax requirements
  • They are responsible with filling prescriptions

6 Rights to Medication Administration

  • Right Patient
  • Right Drug
  • Right Dose
  • Right Route
  • Right Time
  • Right Documentation
  • 4. They’re Organized
  • They map out where products are kept in hospital

(zones)

  • They implement a central storage
  • They limit the number of areas where products and

supplies are kept

  • 4. They’re Organized
  • They map out where products are kept in hospital

(zones)

  • They implement a central storage
  • They limit the number of areas where products and supplies

are kept

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 15

  • 4. They’re Organized
  • They map out where products are kept in hospital

(zones)

  • 4. They’re Organized
  • They map out where products are kept in hospital (zones)
  • They implement a central storage
  • They limit the number of areas where products and supplies

are kept

  • 4. They’re Organized
  • They map out where products are kept in hospital (zones)
  • They implement a central storage
  • 2 Bin System
  • Underutilized Room/Closet
  • Cabinets
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 16

  • 4. They’re Organized
  • They map out where products are kept in hospital (zones)
  • They implement a central storage
  • They limit the number of areas where products and

supplies are kept

  • 4. They’re Organized
  • They map out where products are kept in hospital (zones)
  • They implement a central storage
  • They limit the number of areas where products and

supplies are kept

  • Cupboard Doors?
  • 3. They order systematically
  • They set reorder points and quantities
  • They limit the number of times they order and the

number of vendors they order from

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 17

  • 3. They order systematically
  • They set reorder points and quantities
  • They limit the number of times they order and the number of

vendors they order from

  • 3. They order systematically
  • They set reorder points and quantities
  • Identify Turn over goals
  • 3. They order systematically
  • They set reorder points and quantities
  • They limit the number of times they order and the

number of vendors they order from

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 18

  • 2. They’re hi & lo tech
  • They utilize their practice management software
  • They implement automation
  • Lo tech communication tools (E.g. reorder tags &

want books)

  • 2. They’re hi & lo tech
  • They utilize their practice management software
  • They implement automation
  • Lo tech communication tools (E.g. reorder tags & want books)
  • 2. They’re hi & lo tech

Determine Need to

  • rder

Decide how much to order and from who Place Order Order is received

Contents of shipped items are verified against P.O. Items are recorded into system and put away

Items are priced for resale Items are used

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 19

  • 2. They’re hi & lo tech
  • They utilize their practice management software
  • They implement automation
  • Lo tech communication tools (E.g. reorder tags & want books)
  • 2. They’re hi & lo tech
  • They utilize their practice management software
  • They implement automation
  • 2. They’re hi & lo tech
  • They utilize their practice management software
  • They implement automation
  • Lo tech communication tools (E.g. reorder tags &

want books)

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 20

  • 2. They’re hi & lo tech
  • They utilize their practice management software
  • They implement automation
  • Lo tech communication tools (E.g. reorder tags &

want books)

  • 1. They incorporate a budget
  • Introduce Benchmarks
  • Budgets done based on prior week, month and year

revenue

  • They have an open book of COGS with hospital team

Is the sundry jar half empty or half full?

  • 1. They incorporate a budget
  • Introduce Benchmarks
  • Budgets done based on prior week, month and year revenue
  • They have an open book of COGS with hospital team
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 21

  • 1. They incorporate a budget
  • Introduce Benchmarks
  • Be familiar with your Chart of Accounts
  • 1. They incorporate a budget
  • Introduce Benchmarks
  • Be familiar with your Chart of Accounts
  • Financial & Productivity Pulsepoints, Sixth Edition
  • 1. They incorporate a budget
  • Introduce AAHA benchmarks
  • Budgets done based on prior week, month and year

revenue

  • They have an open book of COGS with hospital team
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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 22

  • 1. They incorporate a budget
  • Introduce AAHA benchmarks
  • Budgets done based on prior week, month and year revenue
  • They have an open book of COGS with hospital

team

“Budgeting is an important part of business management. Inventory and personnel represent the two largest expenses veterinary clinics have in the business environment. Inventory is a large expense since clinics usually have more on hand than they can sell. This ensures they do not run out of inventory. Focusing in on purchasing decisions will require the use of inventory budgets to make a decision. Budgets may be created for each type of product purchased by the clinic or for specific purchasing seasons.. Budgets also help new purchasing managers make better decisions regarding which products they choose to purchase.”

  • Mark Smalley

Thank You! Questions

How do we get our inventory situation under control if I don’t have time, or the involvement from others in the hospital? “Our inventory has improved, only because we’ve made it a priority, that includes the doctors. We’ve gotten some great reports which show us our ABC

  • products. We’ve pared down a lot of things we don’t

use and we don’t sell.” Dianne, Kitsap Veterinary Hospital

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 23

Questions

I want to be successful with my inventory, but where should I start? “We found that when we wanted to organize our inventory everything we needed was

already here. We started cleaning out closets, cabinets, removing doors and eliminating shelves and cabinets. Before we knew it we had productive open spaces that we could really start organizing. We had a large closet that had nothing of worth in it that we made into a central storage, which everyone had to actually check inventory

  • ut before removing. We moved our pharmacy to a central location to make it easier

to fill prescriptions and see what we had on hand at a glance. The treatment area was cleaned and organized to limit overstocking. Overstock is now in central storage to avoid over ordering because you couldn't see anything. Once you start cleaning out cabinets and drawers, you won't believe have much space you really have. I believe a central storage is the key.” Linda Hutchins, El Cajon Valley Veterinary Hospital

Questions

How do others utilize their practice management software programs? And, how are they using their programs for “in-clinic” used items?

“Our practice management software helps us better control our inventory on hand. The software allows us to sort our inventory by class for monthly cycle counts, track expiration dates, view quantities on hand, create and receive purchase orders as well as keeping track of inventory in several locations in our clinic.” “We utilize a central storage system that is integrated with in our inventory management software which gives us the opportunity to keep a close count on the "white" goods and office supplies which are sometimes forgotten in veterinary clinics as being apart of their inventory on hand.” Chrissy, Wauwatosa Veterinary Clinic 1. To complete the evaluation, please go to the following website: http://www.keysurvey.com/survey/359936/baca/ 2. After completing the evaluation, you will automatically be linked to the Continuing Education Certificate. The CE certificate can

  • nly be accessed after the evaluation is completed.

3. Download the CE Certificate (in pdf format) to your computer and print enough copies for those persons viewing the web conference with you. Your input is very important! We take feedback seriously in order to provide you with the highest quality experience possible. If you have any questions about completing the evaluation or accessing your CE certificate, please email us at webconference@aahanet.org or call 800/252-2242.

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AAHA National Staff Meeting Web Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed April 11 - 24, 2011 24

Questions to the Speakers Please email your questions to webconference@aahanet.org by Sunday, May 1, 2011. Angela will provide written responses to all of the questions and they will be posted on AAHA’s website by Friday, May 13, 2011.

AAHA gratefully acknowledges AAHA MARKETLink/MWI Veterinary Supply for their sponsorship of this webcast.