Inventory Management

for the Veterinary

Practice

Bret Schaller

Willow Creek Animal Hospital

Buell S1 Lightning

Inventory Management - Huge Topic

1. Make or buy decisions?

2. Production lead times, transit time?

3. Available space for inventory?

4. Returnable packaging?

5. Turns?

6. Inventory valuation today, future?

7. Make suppliers carry the costs?

1. Show the work is far less than expected

2. Show the benefits outweigh the work

3. Provide selling points for you to gain the

support you need to make this change in

your hospital

Goals of this presentation

Q1 Roadblocks to implementing inventory management

Q2 How many hours per week to place orders?

Q3 How do you receive your inventory?

Q4 On hand inventory value as a % of revenue

Q5 How many times/week do you run out of something?

Q6 ‘Inventory person suddenly gone’ or ‘hit by bus test’

Q7 Impossible to track inventory items?

Q8 How would you use your extra hours (days)?

Q1 Roadblocks - Understanding the software

Let’s separate the knowledge from the tool.

Step 1 - What do you need to know to order

something?

Description - Cost - Price - Supplier

Packaging - Item number

Usage? - Quantity Needed?

Q1 Roadblocks - Understanding the software

Step 2 - Plugging in the data

The fields for the data are the same but

each software uses different names.

Use your tech support!

Avimark Inventory Screen - General Tab

Avimark Inventory Screen - Purchasing Tab

Unit of measure is the key

dose, each, mL, pill, bottle, bag

How about

sleeve, roll, box, gallon, get creative

Setting up your items

You can’t track that!

What is the value of the item?

What level of accuracy is needed?

Which items could be associated to a

treatment?

What are consumables?

Q7 - Are we really counting gauze?

● On a medical record, it’s deducted as

soon as it’s posted.

● Build your treatments whenever

possible.

● When are consumables consumed?

● When should they be deducted?

When do you deduct something?

Gauze - deduct by the sleeve or case

Parvosol - by the gallon

Tape & Vetwrap - by the roll or case

Catheters - by the box

Syringes & Needles - by the box

For every item there is an option that will

work for your hospital - just try something

Examples for consumables

● Set up a hospital account and create a

pet named 2014QTR1.

● Your PMS may have a specific option for

deducting hospital use items.

● This also allows you to run a ‘Use Tax’

report each month.

● Shrinkage control -user ID on deductions

How do you deduct consumables?

● Create an equipment category

● Add your Doc’s preferred surgery

instruments

● The replacement bulb for you collimator

● The water filter for your dental machine

● Anytime you research a replacement

purchase, add it to your database!

Bonus feature

● Setting up the items is the bulk of the work. Take

your time - 3 months for example.

● Cycle count by category as you complete them.

● Ask for input on the consumables.

● Ask for input on the usage and stocking levels - these

will be adjusted anyway

● Check your PO’s until they start matching

● Things will go wrong - demonstrate the appropriate

response - own it - set the culture

Suggested Implementation Plan

● One time gain - convert excess on hand

inventory into cash.

● Is there a project or piece of equipment

you have been trying to bring to fruition?

● Maybe some of this cash could be a staff

incentive plan to get everyone on board.

What are the benefits?

What is a good number for on hand inventory?

What are the benefits?

Gross Revenue $0.5M $1.0M $1.5M

20% on hand $100,000 $200,000 $300,000

15% on hand $75,000 $150,000 $225,000

10% on hand $50,000 $100,000 $150,000

5% on hand $25,000 $50,000 $75,000

● Each year your on hand inventory is listed

as an asset - so you can pay taxes on it.

Let’s make this number as small as

possible.

● Labor hours with the clipboards, weekly

checking the cabinets and food shelves.

● Consolidating the clipboards and

segregating by vendor.

Wait there’s more ...

● How long did you spend educating the

client on Dasuquin only to find you’re out of

it?

● How much money is thrown away for

expired inventory?

● How much time returning items that were

not what you wanted?

Still more ...

● The financial gains are huge.

● You’ve already paid for the software.

● Which resource is best suited for this work?

● Who likes placing the food orders?

● Who likes telling the client or doctor ‘we’re out of

that’?

● Who likes all the clipboards and spreadsheets?

● Who likes forecasting the Merial

● Does your staff know what’s on order?

Selling points to gain support

Order demonstration followed by Q&A

Closing