3 action steps to stay within budget when ordering dental supplies

Did you know that one of the biggest drains in overhead for a dental practice is related to stock management and supply costs?

So, keeping a careful watch on supply costs is critical for maintaining a healthy bottom line.

Surprisingly, many local practices spend anywhere from 7-13% on dental supplies per month, which means they are negatively above average, and their inventory replenishment habits significantly affect their profitability.

Ideally, you want to spend 5-7% of your monthly revenue on dental supplies.

However, that’s often easier said than done (because saving a few dollars on nitrile gloves when you’re spending more than 7% on supplies will not necessarily help - you need to take critical steps to get full control over your budget and supply orders).

Effectively managing your supply orders will help you avoid overstocking, reduce waste, cut costs, and increase revenue.

For this reason, you will find below the most efficient action steps to stay within budget when ordering dental supplies and streamline your ordering process:

Step 1: Review all the orders

If the value of your order has exceeded 5-7% of your monthly revenue, start reviewing all the orders yourself. Compare your current expenditures with the ones of the previous year and try to identify any increases in your prices.

Then, create a spreadsheet of all items acquired in the last 12 months and determine whether or not you actually need all the products purchased.

To decide which product you no longer will be purchasing (or will be purchasing in smaller quantities), you need to have a good understanding of the 80-20 rule - which will be explained in detail below.

Step 2: Apply the 80-20 rule

According to the 80-20 rule (also known as the Pareto Principle), roughly 80% of consequences come from 20% of the causes.

So, how do you relate the 80-20 rule to dental practice management and supply orders? Simply assume that dental practices use 20% of their supplies 80% of the time.

You should therefore limit the supply selection based on the frequency of practice procedures.

Keep a watchful eye on quantities by asking questions like, “Do we actually need ten boxes of Oraqix when we have just a few procedures scheduled in the next few weeks?”

Note: Outside of supply selection, you may also want to limit supply variations (for example, you may not need five different types of gloves size M or five different types of large dry tips).

Step 3: Compare distributors prices

Suppose you’ve created your spreadsheet containing all the items acquired in the last 12 months and eliminated all the unnecessary purchases that are eating up your budget (using the 80-20 rule).

Then, the next step you need to take is creating a new spreadsheet containing the prices of other supply distributors for the exact same products (you may want to add 3 or 4 different distributors).

Compare the prices and decide whether you want to stay with your supplier or switch.

Note: Do not forget to add the shipping costs when comparing the prices (if applicable).  

What are the critical factors that make you go over budget?

Taking the three basic steps mentioned above should help you reduce waste and lower costs.

However, you still need to consider two critical elements before placing your order:

1. Expenditures can quickly go over budget with free items

Deal haunting makes you spend more. So, don’t fall into the trap of spending more just because you get free items or specials. You need three boxes of bibs, so you buy three boxes of bibs (instead of getting a “4+1” offer - that would push you into spending more).

Yes, bibs do not expire, but you can quickly go over budget if you spend more to get free items - not to mention that you may get deals on free items every month, meaning that you risk going over budget every month just to take advantage of these offers and deals.

With a specific monthly budget, it does you no good to have a lot of unnecessary items on the shelf (even if the expiration date of these items isn’t too close).    

2. Manual stock management is a budget threat

Manual stock management is inefficient, error-prone, and time-consuming and can negatively impact your practice’s profitability.  

A great stock management tool will help you stay within budget by creating sock budget goals, forecasting future stock usage, planning for busy periods, generating purchase orders for each supplier within seconds, and providing smart recommendations to save money - not to mention all the other benefits, such as simplifying stock processes and saving staff time.  

We strongly encourage you to automate your stock management processes using an efficient tool such as Invedent, Australia’s top stock management and ordering system.

Invedent was designed to help local practices save time and money and stick to a reasonable budget when ordering supplies.  

Conclusion: Ordering dental supplies does not necessarily need to be a time-consuming, repetitive, and tiresome task. Knowing exactly what items you need to buy (and how many) will bring you immediate and long-term savings and cost benefits. Therefore, we recommend all dental practices take a look at what’s on the shelf and how much they are actually spending in order for them to manage their supplies in a cost-effective way.