There's no reason to become alarmed, and we hope you'll enjoy the rest of your flight. By the way, is there anyone on board who knows how to fly a plane? – Airplane (1980)
Yeah I called her up, she gave me a bunch of crap about me not listenin' to her enough, or somethin'. I don't know, I wasn't really payin' attention. – Dumb & Dumber (1994)
I recently concluded a survey that’s been about 2 years in the making. Over that period of time, I’ve collected responses from 86 practices on the following question:
Which of the following concerns about your inventory prompted you to investigate Grasshopper Mouse™? (Check all that apply)
- Running Short of Product 26
- Communication Between Staff 22
- Inventory Cost >6% of Gross Production 19
- Want to Keep Track of Inventory 15
- Excessive Inventory 15
- Expired Product 12
- All or Most of the Above 11
- Tracking Credits &/or Free Goods Due 5
- Lack of Storage Space 5
- Other 1
As I’ve discussed in previous posts, because inventory costs are such a significant percentage of overhead, they merit careful monitoring. However, there is something that cannot be monitored quite so easily – lost productivity due to hidden costs.
Let’s discuss the list above in terms of hidden cost. It’s easier if we delete the items that are less hidden-cost driven:
- Inventory cost - which is what you’re paying, so it’s really just “price”.
- Expired product (costs hard cash, because it must be replaced – although keeping track of it takes time (read: $$)).
- Excessive inventory is a function of Opportunity Cost: money that could be used for other things is tied-up in inventory.
So, what about the others? Here are a couple of big ones:
Twenty six (15, plus 11 “All or Most of the Above”) respondents realize that there’s a need to keep accurate track of inventory. Why? For the same reason that Walmart, Costco, General Motors, and countless other businesses do: because it’s a basic expectation of any well-managed business to know what inventory is on-hand. Can you imagine Toyota having to close down an assembly line because somebody forgot to order a bolt? But, scaled-down, it happens countless times in dental offices all over the world and has the same scale of impact on their production.
When I was growing up in the business (I’ve been around for 40 years), many dental practices felt it mercenary to discuss or even think about good management practices. It was like a ministry. But, even a ministry can’t last long if its resources are poorly managed.
Manage your practice – or your practice will dictate to you what your resources are and, along with limiting those resources, it will limit your choices. Don’t allow poor inventory control to limit possibilities for your practice’s growth. Believe me, I’ve seen it. Poor inventory control can be an anchor that can put the brakes on in places you never anticipated.
Need help with controlling your inventory? Go to https://www.ghmouse.com/ or call us at 714.912.4183 to schedule a ½-hour demonstration.