As we’ve said before, when you are fighting to achieve maximum cost savings, every penny counts, making it easy to get carried away. Unless you’re careful, aiming to purchase every item at the lowest possible price or waiting until the last possible moment can, in the end, cost you more.
Although procurement’s goal should be to strive for improvements in all three areas, price, quality, and service, by implementing the right dental procurement strategies, there is no avoiding that often one must be sacrificed for the other. Rush deliveries and high-quality name-brand goods come at a cost.
The more realistic goal should, in fact, be to purchase the right items at the right time and at the best possible price. But knowing just what is “right” for your dental practice requires a clear picture of what’s important to you.
Therefore, setting your values, knowing your risk tolerance, and communicating them to those who drive your daily purchasing decisions, ensures they make the right decisions for your dental practice.
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Firstly, you should be clear to set a standard of service that you simply aren’t willing to sacrifice. Any company you are considering purchasing from should be proven to deliver the right product, in the right quantities, on the right day, in good condition, and with accurate paperwork invoicing. If you’re not there yet and have a low tolerance for risk, this should be your first goal, as anything less puts your business continuity and profitability at risk.
Over and above this, suppliers can help you manage your purchases by keeping on top of your orders and advising of any possible delays or shortages, or showing you better ways to amalgamate your orders for savings. They should also keep you abreast of new products available on the market and offer cost-saving opportunities such as transitioning to private label or other lower-cost options.
However, just how much you actually value your sales rep’s “value-add” babysitting services is up to you. Know where you are, what you want to strive for, and where service sits on your list of priorities.
Some dental practitioners are keen on following a formulary or using specific name brands only. Others are happy to save on costs and use private labels. Your employees should know where you stand and what you’re willing to consider for cost savings.
Keep in mind, if you are looking to possibly move to a new product, to mitigate the risks to your dental practice, trial and testing procedures are highly recommended.
Of course, price is always at the top of everyone’s list. You want the best possible price, and we get it. But life is more complicated than that. Do you have the cash flow required to purchase higher volumes to save on cost? Are you willing to give up that name brand and move to a private label? Do you have the labor resources to split up orders and purchase every item from the lowest possible source, and if so, does your procurement person understand and know how to calculate the hidden costs that may bite your bottom line?
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Every day your employees are charged with making the right calls for your company. However, clearly defining and communicating your values, and setting any necessary purchasing “rules” or processes helps guide those decisions and sets your employees, and your dental practice, up for success.
That’s one of the reasons we created our cloud-based inventory management software that allows you to keep track of what you’re getting from your suppliers to hold them accountable. To see this in action, simply request a demo and one of our representatives will schedule a time to talk through the possibilities with you!