Pays to be Organized
Pays to be Organized
Numerous laboratories have thousands of dollars lying around everywhere. No, not in the form of cash; in the form of unused, mismanaged, obsolete and poorly organized supplies. Inventory accounts for 45 percent to 90 percent of most businesses expenses. Therefore, most laboratories cannot absorb or afford poor inventory management. Sound inventory management practices and an inventory control plan will reduce the amount of wasted money within a laboratory.
Inventory management is a systematic process to determine the most effective means to procure and utilize resources to manufacture or sell goods. Simply put, how you buy, store and use supplies? This process includes forecasting, quality management, organization, replenishing, determining cost of inventory, returns and inventory storage and organization. Effectively managing supplies will reduce the amount of money tied up in non-working assets. It also reduces the cost to procure supplies. Carrying too much inventory takes up space, increases chance of spoilage and runs the risk of becoming obsolete.
Most dental laboratories have supplies in use throughout the business. Poor organization can lead to ordering duplicate or triplicate items. Having a specific area for all supplies will reduce the chance of excessive ordering. A dedicated supply closet or room has many functions:
- Secures and locates all supplies in one area.
- Reduces time to find supplies.
- Helps keep supplies organized.
- Decreases clutter in work areas.
- Reduces time determining what supplies are needed.
To reap the full benefits of a supply closet, it must be organized. Placing shelves on the wall will help to maximize the use of space in the room. Bins or old case pans can be used for small items. The supplies should be grouped together by like items. For example, place all office supplies in one area, housekeeping supplies in another, burs can be placed on the shelf or in organizing drawers, stones and plasters can be grouped together on the floor, etc. Once everything is organized in the closet, create a list of everything in the room. This list will simplify ordering by being able to indicate the amount of each needed item on one piece of paper. Production in the lab will not have to stop for everyone to determine what supplies are needed. A check-out list should be placed next to the door for each technician to log what and how many they have taken out of the supply room. This information can be used to determine usage trends. A technician's use of supplies should correlate directly to the amount of units produced. Excess use of supplies and few units produce shows an incorrect technique or waste of supplies. Technicians should have a dedicated day to stock up their bench with supplies for the week. This will eliminate several trips to the supply room throughout the week.
Inventory Control Plan
The inventory control plan is a five-step process to balance on hand stock while maximizing the use of assets to turn a profit.
- Inventory plan. The first step in any process is to have a plan. Planning will determine what supplies are used within the laboratory. Standardizing all items within the lab will reduce wasted money for various products that perform the same function, simplify ordering, increases discounts for bulk ordering and reduce number of vendors used.
- Create order cycle. Utilizing the check-out list will help to determine usage trends needed for ordering. Knowing how much of any item used will enable the purchaser to negotiate discounts, determine stock levels, calculate cost per unit and re-order quantity. Past ordering trends can be useful when budgeting for the upcoming year and predicting busier months. Using a set day of the month for ordering will maximize the time of the purchaser and minimize shipping costs on orders.
- Balancing inventory levels. This is the process of determining how much to have on hand without running out. Proper inventory levels should be kept low without sacrificing service or performance of the lab. Running out of supplies is costly financially and from lost fabrication time. A balanced inventory allows a lab to save money on choosing slower shipping times for supplies. Utilizing exchange programs for denture teeth can help to keep stock and costs low.
- Review supplies. Supply room organization is crucial in this step. Overstocking of materials with expiration dates runs the risk of not being used in time. As supplies are received, rotating the stock in a first in, first out method is beneficial. This reduces the chance of materials expiring.
- Follow-up and control. Physically doing periodic inspections of inventory can identify obsolete or underutilized materials. Obsolete materials should first be tried to be liquidated and then discarded. Materials no longer used take up valuable space that can be used for other supplies.
Inventory management provides a systematic process to procure and use supplies. An organized and dedicated supply closet or room is an effective way to manage materials on hand. The five steps of an inventory control plan will determine and balance supplies on hand. Combining inventory management with an inventory control plan will minimize the procurement time and cost of supplies while increasing profits.
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