Purchasing and inventory have long been a burden for dental professionals everywhere. But new alternatives are making the job easier.
Inventory and purchasing have long been thorns in the side of practitioners everywhere. These time-consuming, cumbersome, but necessary tasks have often been shunted to the side because they are such headaches. But now alternatives to traditional procurement processes are making the job easier and more lucrative for practices of every size, encouraging them to reassess how they approach purchasing and inventory.
“In many ways, dental is following the path of other industries as they become more cost pressured and more professionally managed,” says Dan Traub, vice president of product at Method Procurement Technologies. “With the advent of [dental service organizations], for example, people are saying, ‘Now I have time and incentive to look at procurement,’ and it can really be a differentiator for practice profitability.”
With the growth of interest in procurement has come a growth of options. Gone are the days of Excel sheets and hard copy order forms. New digital technologies are streamlining processes, simplifying ordering, and connecting practices with vendors like never before.
“Thanks to the advent of the internet in general, people have become more aware that there’s value in competing, and there’s a wide range of prices for any given item that’s sold,” Traub says. “In dental, you have major distributors and mid-tier distributors, and many of the products they carry are similar, so there’s a lot of overlap and people want to do cost comparisons. They want to drive as much efficiency for their practice in the procurement process as well.”
The Challenges of Procurement
Perhaps one of the biggest challenges for practices has been determining ways to streamline the purchasing and inventory management processes to make them more manageable and less time-consuming. “Time, time, and more time is the challenge,” says Jess McCarter, sales and strategy for base86, Inc. “Much of supplies cost tracking, even with excellent practice management software, is manual and menial, leading to wasted hours and employee burnout. Many clients come to us with Excel spreadsheets tracking hundreds of product [stock-keeping units] across multiple websites and suppliers. It should not take 30 minutes of pointing, clicking, and logging in before you can start ordering.”
In the world of dentistry, 30 minutes could equate to many more dollars. However, rushing and trying to shave time off that process can lead to costly mistakes or cut corners. “Anybody could do without a procurement tool, but oftentimes, they don’t have the time to do it thoroughly,” Traub says. “You might just fall into this pattern where you’re buying from your preferred supplier and they take good care of you, so you [may] not be motivated to shop around. But we’re trying to arm people with the knowledge that says there’s value in running procurements better. It’s less time for your team, it’s fewer mistakes, and it’s less costly.”
Time isn’t the only handicap. Not having a thorough understanding of how much your practice needs of something—and how often it needs it—can make procurement a frustrating and flawed process. Balancing all these components often becomes overwhelming and leads to complacency or ordering errors.
“The biggest challenge dental practices face in procurement and inventory management is finessing the delicate balance of purchasing the right products in the correct amounts at the right time within budget,” says Amanda Lien, director of product merchandise for TDSC.com, Powered by Henry Schein. “In the current environment we are living in, which has increasingly complex supply chain issues, this is a challenge for all dental practices.”
Not addressing these challenges appropriately can lead to bigger problems that snowball the longer they go on. “A few common mistakes that dental practices make regarding inventory management and procurement involve making bulk purchases to save per unit, carrying inventory of and utilizing multiple products with the same function, and failing to incorporate house-brand products,” Lien says. “Pitfalls [practices] should look out for include not setting a budget for dental supplies, over purchasing products that serve the same purpose, or having too many inventory days that, in turn, may cause cash flow constraints.”
Although Lien sees that the intent in many of these scenarios is to save money, she says these practices can often have the opposite effect. Purchasing products in bulk unnecessarily increases practice overhead, reduces practice cash flow, and increases the risk of products expiring on the shelves. Carrying duplicate products with the same function comes with the same risks, with the added complication of increasing order time, resulting in a less efficient ordering process. By eliminating these complications through the reduction of same-function products and the streamlining of purchases to reduce cost and redundancies, practices can save both time and money.
“It’s not just about buying less. It’s about buying smarter,” Traub says. “Procurement techniques can help you do that in a repeatable way, [as well as] make sure that your entire team is buying the right way, so those savings can materialize.”
Although it may be tempting to purchase from third-party online sellers to save money, Lien cautions against it. Oftentimes, purchases from these sellers don’t come with a product warranty, and it can be difficult to obtain a refund if need be. Purchasing platforms like TDSC.com can minimize this risk.
“Make sure you are purchasing from an authorized dealer before you buy,” she says. “An authorized dealer is a business authorized to offer and sell a product for another company. If the price is too good to be true, like most things in life, you get what you pay for. Using an inferior-quality product in your practice isn’t worth the risk. Is the product being offered by a nondental dealer? If so, take a pass.”
But what if your dealer can’t get you what you need? Today’s supply chain disruptions have left both consumers and dentists struggling to acquire the things they need. Responsibly planning ahead to avoid inventory disruption and knowing which various suppliers can get you that inventory, can be an intelligent play, McCarter says.
“A smart and safe practice is ordering a little more from a few more sources to make sure they always have enough on hand to complete every scheduled procedure without having so much inventory that items expire,” McCarter says. “If you haven’t diversified your supplier choices and still rely on 1 big company for most or all of your supplies, you are putting your practice at risk the next time the supply chain is disrupted.”
The Advent of Procurement Solutions
The latest options in procurement and inventory solutions are addressing many of these challenges head-on, and Traub thinks practices would be foolish not to adopt one of them. “Everyone should have procurement on their shortlist of business processes that need to be managed,” Traub says. “Just improving procurement, in general, can easily add 5 figures to the bottom line for a single dentist’s location. That’s pretty compelling when compared with other options, [such as] putting in more chair time or driving your production up.”
McCarter agrees that automation is the key to success. “Using automated tools to take the menial and repetitive tasks off your plate is the best way to deal with supplies and inventory,” he says. “Failure to use these tools means wasting many hours shopping around for the best price and availability, or overpaying, which hurts your bottom line, or running out, [which] hurts your top line. A fiscally sound practice manages to do just enough inventory and just enough ordering to stay a few weeks ahead of schedule.
“Be honest about how you run your practice and how much time you want to spend on management instead of procedures,” he says. “If you would rather be with a patient in a chair than in the office comparison shopping, it’s time to bring in some supply-chain management specialists to take that burden off your shoulders.”
There are multiple options for specialists out there. base86 offers supply cost tracking and management, simplifies supply quotes from numerous vendors at once, and makes it easy to compare offers from multiple vendors. “base86 focuses on tracking your supply spend in real-time and alerting you to spikes in prices and alternative suppliers so you can always find someone with a reasonable price and inventory of the supplies you need to run your practice,” McCarter says. “We look at ourselves as matchmakers and facilitators.
Practices can upload their existing product list to base86 in an Excel file to get all their products in the system, then begin getting quotes on those products from several suppliers. Once practices have determined which products they want to order from which suppliers, the system generates order lists for simplified order placement. By working with multiple vendors, base86 can help practices reduce cost by increasing competition while minimizing risk in the event of supply shortages.
Traub also sees the value in being prepared for potential shortages, particularly in the wake of the COVID-19 pandemic. Method Procurement Technologies allows practices to get real-time pricing and stock availability, which is a crucial tool during the pandemic.
“In COVID-19 time, that’s been huge,” he says. “Think about all the [personal protective equipment] stress practices were faced with last year, and even still this year. Now there are all these other back-order rates that have gone through the roof, and you have a lot of pockets of unavailable products, delayed products, and things. So if it’s something your practice really needs and your main supplier is 3 weeks out, you probably need to go get it from somebody else.
Method Procurement Technologies can help practices find that “somebody else.” The cloud-based dental inventory management and purchasing software has an industry catalog of over 800,000 products. Method has all the major categories of dental tools, supplies, and equipment covered, including personal protective equipment and specialty instruments for orthodontics, endodontics, and more.
“All the major categories are covered,” Traub says. “Method has combined the data to make a searchable [and] accurate catalog that you start with, then you select suppliers in different ways, such as performing a cost analysis. That industry catalog is constantly being refreshed and updated. This means you also get real-time pricing to see what your price would be with the various suppliers you want to view.”
Traub says this real-time integration with the supplier community is a big differentiator for Method, saving practices from having to make multiple phone calls or jump between multiple websites. “We bring all [these] data together in 1 place,” he says. “We filter and clean the data so it’s not just a data dump, it’s actually usable.”
Everyone agrees that compiling all the information into 1 place is critical for busy practices looking to streamline procurement. “Our mission at TDSC.com is to aggregate the collective purchasing power of independent dentists to offer them consistent [and] competitive pricing every day,” Lien says. “These consistent and competitive prices allow practices to save time in negotiating better pricing with their full-service vendor. The TDSC.com website is very easy to use, self-service, and shoppers can feel confident that products come from authorized manufacturers.”
Established in 2017 by the California Dental Association, TDSC.com joined Henry Schein in October 2020 and works very closely with state dental associations to offer access to the site to association members as a member benefit. The impetus behind the site was to aggregate the purchasing power of solo practices to offer prices that were competitive to dental service organizations (DSOs) and multilocation practices.
“Rapid expansion of multisite dental practices in the dental industry presents both challenges and opportunities for the independent practitioner,” Lien says. “DSO economies of scale have brought insight into many advantages associated with the model. These advantages can be realized at the private practitioner office, as well, by choosing to shop with a supplier partner such as TDSC.com, which takes the guesswork out of the process for you.”
“Procurement isn’t a process confined [to only] DSOs or multilocation practices,” Traub says. “It applies to everybody. And smaller practices have the need to compete against practices that have bigger buying power. Some practices have joined group purchasing organizations to combine their buying power. Inventory management and procurement tools can provide information that’s low-hanging fruit to change a lot of your practice’s daily operations.”
These recent innovations have revolutionized the way practices are looking at inventory management, but there are still more advances on the horizon. As software capabilities increase and practices become accustomed to automated purchasing, advances in inventory management and purchasing solutions will continue to grow.
“We believe the future of procurement and inventory management will continue to shift to digital channels, and e-commerce is going to play a large role in it,” Lien says. “The convenience of e-commerce is here to stay, and websites will get more and more sophisticated to [help] customers manage their ordering and inventory management processes.”
This digital connection will mean practices will expect more transparency, accessibility, and ease of use going forward. “The connectivity between buyer and supplier will continue to grow, and people will have the expectation that they’ll have more information at their fingertips,” Traub says. “There are still suppliers who operate in a veil of secrecy about what the pricing is [and] what the products are, and they make you go through those hoops to get service. That way of thinking is [in] the past. People want the convenience and efficiency to be able to order what they need.”
The desire for convenience is all spurring advances. Eventually, Traub believes artificial intelligence (AI) will streamline the process even more, pinpointing trends in ordering and product usage and making suggestions for the practice.
“I think some of the more intelligent features are coming down the road, where the system is guiding more than just a place for you to do your work. It’s recommending how to get those metrics better,” Traub says. “How to lower costs, how to take cost out, being able to detect when something is wrong and do something about it, etc. The system should be able to recommend some of these things because it gets to know you and your inner consumption habits over time.”
McCarter agrees that intelligent technology is on the horizon. “Automation will continue, and smart AI systems will continue to reduce the amount of time each day [that] humans have to spend on inventory, ordering, or menial tasks,” McCarter says. “We will all continue to de-risk the supply chain by finding more options for purchasing and producing more supplies closer to home so they do not need to be shipped as far and can be shipped [faster]. Local production will also help tighten the feedback loop on quality issues so they can be addressed in near real-time.”
In short, if you aren’t looking at better procurement processes as a key factor in how you run your practice, you aren’t looking toward a brighter future for your practice. “I would encourage anyone with an entrepreneurial mindset in dental [to] look at procurement as a core business process they can improve, no matter how good [or bad at it] they are right now,” Traub says. “People know there’s potential, but they feel like their team is already maxed out, and that’s where the technology comes in. Choose a tool that helps you automate and streamline because it’s worth it. It really is a solid financial move.”