by Tiffany Killion-Consalvo, CVPM
Every year veterinary hospitals spend anywhere from 15 – 25% or more, of our gross income on inventory for our hospitals. For a 2-million-dollar-grossing veterinary hospital, this equates to $300 – $500 thousand dollars a year. However, most managers and owners have little to no inventory systems in place. We have promoted people by default into the job of ordering the inventory supplies and products, and to ensure that the veterinarians have all of the supplies/products on the shelves that they want, but then what? How many people actually record their inventory into their management software, look at purchasing trends, seek the vendor’s assistance with special pricing and deals or ensure that their software is setup correctly to increase prices as new products come into the practice? A small amount of effort in this area can save the hospital thousands of dollars.
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So my question is: why does the veterinary industry think they are above having systems in place to track their inventory supplies? We are an expense industry and we do spend a lot of money each year on these items. Is it because we have to have the items in order to conduct business, so we accept the fact that this is what it is? I want to challenge all managers and owners to pull out their profit and loss statement to see how much capital they are spending each year on inventory; and then start organizing their efforts with a system.
Brainstorm with your management team, and stress the importance of managing your inventory! A 1 – 3% savings can save the example hospital $3 – 15 thousand dollars a year. Start your journey by mapping out when you will purchase inventory items; once a week is a good goal to hit. Then make sure everything in your hospital has it’s own home. An organized inventory system makes things easy to locate for your team, and reduces unnecessary spending on items you cannot find within your hospital.
Ask your veterinarians to review your pharmacy categories. Do you really need 20 different antibiotics, or do they all agree that these 10 would be sufficient for your hospitals standards of care? You can then begin to trim down the amount of products that you carry. Next, review your management software inventory system. Take a few free online courses provided by your software company to ensure that you know how to use the system the way in which it was intended. Print your inventory reports. Do they make sense? Do you need to re-categorize items?
I challenge all veterinary teams to look at your inventory systems, and make sure that it has evolved with your hospital. A little effort can save the hospital cash, and ensure that the practice is more profitable at the end of the year. If your hospital struggles with where to begin, Halow Tassava Consulting can help! Just click the Contact HTC button and we’ll create and implement a plan that works for you and your team.