After over 30 years working in, owning, and building dental practices in Canada and the United States, there are some truisms that are pretty much common to any practice, large or small. Performing dentistry is demanding, as is running a profitable business, especially with rising costs and a slowing economy. Nevertheless, there are a few great ways to impact your bottom line favorably, simply by paying attention to the line item on your P&L for dental supplies.
Fortunately, unlike so many other dental practice expenses, dental supply management and cost control can save you a small fortune. Here’s how:
1. Recognize the disparities in pricing in the dental industry. It is a fact that depending on where you source your supplies, pricing for the exact same OEM (Original Equipment Manufacturer) product can vary widely. Savings up to and beyond 50% are commonplace.
2. Create an efficient inventory storage structure. Top-notch physical placement and management of dental supplies are essential. Disorganized distribution of supplies in every nook and cranny, closet, and drawer will undermine any efforts to save money. The average practice should not have more than three major points of storage, with the most important storage cabinet being as close to the center of the clinical area as possible. It is fine to have heavily used consumable supplies like gloves, masks, and bibs, stored in each operatory with bulk storage centrally located.
3. Overlay physical inventory storage with efficient systems. Keep it simple. For instance, maintain products neatly arranged on shelves for easy visibility, including labels as needed for precise identification. As much as possible, don’t juggle product positions on shelves. Ideally, to ensure that everyone involved in inventory management and supply purchasing is on the same page, the best practice is to create an SOP (Standard Operating Procedure) for purchasing and storage of supply inventory. This will avoid mislaid products, double ordering, products not being ordered that are out of stock, etc. Good documentation of procedures will also save your butt or your bum, depending on whether you’re in Canada or the United States, should you lose a key ordering person (see #4 below). Keep in mind that a less-than-perfect SOP for supply management is light years better than a free-for-all inventory management “system.”
4. One person leads the show. The internal responsibilities for inventory management, purchasing, and receiving dental supplies are best handled by a single person primarily for leadership and accountability considerations. The ideal person for being responsible for saving money on dental supplies would have these characteristics:
- Deep and broad knowledge and experience in a clinical dental position. For a solo practice, this typically will be the practice owner or a dental assistant.
- “The Dental Supply Owner” will be most effective if he or she understands the needs of the position (“gets it”), is excited about the position (“wants it”), and can do the job (“has the ability”).
- Clearly, the dental supply owner needs to be heavily involved in determining the practice’s dental supply storage system and putting together an SOP manual, as well as making sure that ALL team members respect and follow the required processes.
- As an aside, I would strongly recommend that the practice not allow a new person to reorganize the supply cabinets and/or purchasing systems. My experience is that new persons may want to reorganize the practice more to make themselves comfortable (i.e., Like their previous practice) rather than improve the efficiency of the new practice.
5. Internal Efficiencies. Now that we have discussed the importance of defining key locations for dental supplies, along with creating standard operating procedures that will support predictable positive team behavior, we have structure and procedures that will very much enable maximizing savings on supplies, primarily on behalf of the leadership and actions of the dental supply owner. In fact, the dental supply owner is the key person who will be primarily responsible for anticipating needs, achieving healthy but not overstocked inventory, and maximizing savings. Here are some ways for the dental supply owner to make it happen:
- One source of truth: It’s fine to have multiple team members submitting requests for supplies. However, this is probably the most common area where things go awry in practice. For example, it’s perfectly fine to write down requests on Post-its notes so long as the Post-its are placed in the same place, meaning the dental supply owner should not have to scour the practice to pick up posts from operatories, doctors’ offices, break room, or sterilization area. Better yet is to utilize a digital Dental Supply Order List that can be accessed from any dental office computer (assuming appropriate credentialing). Ideally, the dental supply owner has a particular area, such as a small office, cubicle, or lab, where Post-its can be placed or dental items can be directly added digitally. It is ideal if the ordering location is close to or in a major storage area such as a lab or sterilization area.
- Make the rounds. With good practice systems, the dental supply owner can scan the supply closets with a predictable cadence, such as Monday, Wednesday, and Friday, to get a sense of inventory levels. For an average practice, the dental supply owner may wish to review overall purchasing needs on a weekly or bi-weekly basis.
6. Purchasing efficiency and effectiveness. When it comes to saving money on dental supplies, your most powerful partner is the Internet. There are literally hundreds of manufacturers and distributors that are selling dental supplies online. There has never been a better time for comparison shopping. With dental supplies averaging between 6% to 8% of expenses, having great internal systems in your practice, coupled with comparison shopping, creates an opportunity to reduce your dental supplies expenses to 4 to 5 percent. Savings for many practices can amount to thousands or tens of thousands of dollars of savings per year. But how do you avoid the potentially mind-boggling task of hopping from 1 website to another?
Here are some tips:
- Many practices tend to choose a single large distributor for all their dental supplies, equipment, and services, in which case they may be paying much more than necessary, especially with consumables and small equipment. Comparing pricing amongst the most popular distributors is a good start in the right direction, although the savings may not be optimal.
- Smaller regional distributors often have favorable pricing relative to the large national distributors, where significant savings can be had.
- Purchasing directly from manufacturers that sell through distributors as well as sell directly can save substantial costs. In my opinion, dental manufacturers are leaning more and more towards selling directly to dentists than they have in the past in order to have access to better margins and access to providing dentists with the lowest possible pricing.
- Marketplaces often include both manufacturers and distributors, where dental practices benefit from capital market competitive pressures that organically drive pricing down substantially.
- All these types of e-commerce players provide a set of features to dental customers. Some of the desirable features that you may want to look for when you are shopping online include:
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- Easy, intuitive shopping experience
- Unconditional 30-day money-back guarantee.
- Genuine OEM (Original Equipment Manufacturer) products.
- Broad product offering
- Evidence of a history of great customer service. (Example Google reviews)
- Free shipping (or free shipping threshold).
- US-based customer service team
- Comparison shopping of multiple vendors.
- Substantial time in business. At least 5 to 10 years.
- Subscription ordering possibility. Assists with managing inventory automatically.
- Predictive ordering capability based on previous ordering history. Know what is needed most urgently.
- Savings in the area of 15% to 50%
If you are looking for a new way to buy your dental supplies, learn more about how Net32 works.
Wishing you the best in dental supply savings.
ABOUT THE AUTHOR
Dr. Cassidy received his MPH degree from the University of North Carolina, Chapel Hill, and his DMD degree in general dentistry from the University of British Columbia. He is a seasoned dental professional with a history of leadership and innovation as both a practicing clinician and an entrepreneur. Currently the chief dental officer at Net32, he builds upon his extensive experience in shaping the dental supplies marketplace. Having served as CEO and co-founder of Net32 from its founding in 1997 to 2022, he made a significant impact on the organization and the dental industry as a whole. Prior to Net32, Dr. Cassidy founded Research Triangle Dental in 1992 and held prominent roles in the British Columbia Division of Dental Health Services. Dr. Cassidy is based in Cary, NC. He can be reached at pcassidy@net32.com.
Dr. Pat Cassidy, DMD, MPH
Disclosure: Dr. Cassidy is co-founder and chief dental officer of Net32, Inc.
