Inventory Control and Maintenance

1. Inventory Control and Maintenance Office Management

2. Introduction • Maintenance of an active working inventory requires both planning and continuous monitoring. • Failure to do so may result in shortage, inefficient use of time, increased costs, and added stress. • Ideally quantities stocked should be as small as possible without running out between reasonable ordering periods.

3. Managing an inventory can be overwhelming.

4. Inventory turnover- the number of times per year that an item is bought and sold. Should be at least 4 to 6 times a year. May be greater in instances of food or frequently used inventory. Lead time- When a re-order should be placed.

5. Strategic Inventory Analysis

6. Computer Aided Inventory Control • Computer systems are great at monitoring inventory control. • Physical inventory should still be done at least once a year (preferably twice a year). • Higher the turnover, the lower the investment in an item.

7. Inventory Maintenance • Primary disadvantage to large inventory is money that is tied up in drugs and supplies. • Large inventory makes switching to equivalent drugs difficult even if cheaper. • Large inventory may lead to expiration or spoilage. • “Savings” for investing in large amount of product should be approached with caution. Need to accurately predict how much product will be used before ordering massive quantities.

8. Frequency and amount of orders may be dependent on what is policy of distributor in which you are ordering from. • May increase and order to decrease frequency of order and therefore reduce cost. • Most veterinary hospitals employ a “just in time” ordering system.

9. 80/20 Rule • 80% of inventory dollars are represented in only 20% of inventory items. • Heartworm and flea preventions. • How to determine what is 80/20 • List total inventory in descending dollar value. • Whatever is at top represents what you spent most on in last 12 months. • Things at bottom of list may not need to be reordered as frequently. However always try to keep one of everything on hand in case of an emergency.

10. Shrinkage • Shrinkage- decreases in inventory that can not be accounted for. • May be due to not being charged, not noted when used or theft.

11. Things to Avoid • Stocking multiple brands of same medications. • Having multiple doctors use multiple medications, • Having a large inventory of medications with similar qualities. • Ex: Rimadyl, Deramaxx, Metacam, Previcox

12. Rules to Remember • Have one person in charge of hospital inventory to prevent confusion. • Have an inventory control system. • Tells you when you need to reorder items. • Tells you who you ordered from in the past and how much you paid. • Tells you how much you ordered previously. • Provides accurate data on current inventory. • Have a “want list” and mark by urgency that product is needed.

13. Who do you order from? • Veterinary Suppliers • Veterinary wholesale or distributors • Butler, MWI, Webster • Veterinary Practices • Maintain relationship with close veterinary clinic for emergency needed items. • Directly from Company • Some companies will only sell directly to the veterinarian. • Pfizer, Merial, Novartis, Ft. Dodge, Hills, Iams, Bayer, Idexx, Purina, etc • Pharmacies • Human pharmacies may have common drugs available or be able to compound certain medications. • Other suppliers • Human hospitals • Chemical suppliers • Mail order companies

14. Receiving and Recording • When product arrives in clinic, look for packing slip. • Packing slip includes list of items in package and should be checked against contents to ensure everything is there and in good condition. • Check expiration dates. • Place items in appropriate areas. • Record inventory in appropriate logs.

15. Order Control Sheet • Should have • date ordered • Source • item • strength • number in stock • ideal number to order for minimum cost (EOQ) • last price • new price • number ordered • date received • if backordered

16. Computerize or Not Computerize Without computer system may be using manual system that is harder to control and manage.