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 Angela Schneider, CVT AAHA gratefully acknowledges AAHA MARKETLink/MWI Veterinary Supply for their sponsorship of this webcast. Panel of Consultants Mary Brookings, RVT Patrick Hennessey Angela Schneider, CVT Inventory Management Consultant Inventory Management Consultant Sandy Franzen Presenter Goldthwaite, TX Portland, OR Inventory Management Consultant Las Vegas, NV Nashville, TN Jane Kimmes, CVT Mark Smalley AAHA Practice Accreditation Coordinator Inventory Management Consultant AAHA Practice Consultant Meridian, ID 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 1
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 2
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 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 opportunities • Open book management 3
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 opportunities 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 4
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 our 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 5
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 6
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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) 7
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 8
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 9
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 on product changes 6. They’re hands on • They track expiration dates • Monitor prices & COGS • They communicate with associates and staff on product changes 10
AAHA National Staff Meeting Web April 11 - 24, 2011 Conference - The Top 10 Inventory Secrets of a Successful Veterinary Practice Revealed 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 official 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 11
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