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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, 2011By

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


Nashville, TN

Patrick Hennessey


Portland, OR

Mark Smalley


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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10. They have an inventory leader

• Committed Time To Inventory

• Expectations Identified

• Owners/Veterinarians still hands on


• Committed Time To Inventory• Expectations Identified




• Expectations Identified• Owners/Veterinarians still hands on




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• Expectations Identified


“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


• Inventory is an important part of the culture• Delegation of responsibilities






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• 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









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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


• Forecast and identify seasonal products

• ABC analysis performed to identify “A” products

• Prevent having duplicates, identify “C” products








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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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• They know billing terms for effective ordering• Utilize home delivery options









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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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Indirect Costs•Tax

•Shipping

•Ordering Cost

•Holding Cost












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• 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





• Cycle Count





• Cycle Count




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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



•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



“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

http://www.deaecom.gov/csosmain.html

http://www.rld.state.nm.us/pharmacy/PDFS/reversedistributor.pdf




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www.avma.org





http://www.avma.org/




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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








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• 2 Bin System

• Underutilized Room/Closet

• Cabinets




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• 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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• Identify Turn over goals







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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)






Determine Need to

order 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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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?








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• Be familiar with your Chart of Accounts



• Be familiar with your Chart of Accounts

• Financial & Productivity Pulsepoints, Sixth Edition


• Introduce AAHA benchmarks






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• Introduce AAHA benchmarks



“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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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

out 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 only 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 [email protected] or call 800/252-2242.

http://www.keysurvey.com/survey/359936/baca/




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Questions to the Speakers

Please email your questions to [email protected] 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.

panel of consultantseoplugin.commpartners.com/aaha/2011/110401... · secrets of a successful...

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