Veterinary inventory management: Best practices for improving efficiency

Effective veterinary inventory management is crucial for a veterinary clinic to operate smoothly. Stocking too much can lead to product expiration, resulting in wastage and lost revenue. Stocking too little can put team members in a tricky situation, where they cannot treat a pet or provide clients with necessary food, medications, or convenience items. Clunky inventory management systems also distract team members from other essential tasks. Here are some strategies to optimize veterinary inventory management and boost your practice’s efficiency.

Establishing inventory thresholds

Over- or under-stocking can impact the clinic’s bottom line or cause frustrations on the floor. Identifying inventory thresholds by evaluating product usage and cost can help practices maintain proper stock levels with less effort. Start by determining how many items you purchase in a given period. Then, estimate how much you use in two weeks - this is the minimum inventory to keep on the shelf.

Reorder levels tell the inventory team when to reorder an item to avoid running out. Generally, you should have a two-week supply of everything you need on the shelves. You can estimate reorder levels by looking at previous sales and using reports in your veterinary practice management software and then setting minimum quantities that trigger an alert in the system. Your software may automatically order items or populate them on a want list for manual ordering.

Evaluate and adjust reorder levels as practice conditions change. Mistakes happen, and you’ll likely overstock or run out of products from time to time, but you can use these incidents to refine reorder levels or assess your reorder process.

Conducting routine audits

Regular audits are the foundation of effective veterinary inventory management. Counting and reconciling stock with actual on-hand quantities helps identify serious discrepancies (e.g., theft) and allows for quick corrections. If you aren’t regularly counting items, you may have to deal with a big mess when you complete a count at year’s end. Plus, accurate counts help you monitor use and purchasing trends to determine appropriate stocking levels.

During audits, check expiration dates and compare them with what’s in your tracking system. Use a first-in, first-out technique to stock shelves, so the oldest items get used first - and ensure you train all team members on its importance. Keeping a close eye on expiration dates ensures product efficacy and safety.

Automating inventory processes

Many veterinary practice inventory managers use a manual or “want list” order system. They populate the order based on information others have added to the list and then look at the current inventory to see if a restock is necessary. This process is not only inefficient but also can result in forgotten items.

Software with integrated veterinary inventory management tools can automate the manual order process by populating the order list with real-time tracking of stock, usage, and sales. When order day arrives, the manager can quickly review the list and submit the order rather than start from scratch. However, automation can’t replace quarterly hard counts because these help reconcile discrepancies and account for consumables. Keeping up with quarterly counts can reduce the time and energy required to reconcile at year’s end and helps ensure efficiency.

Solid veterinary inventory management software can be invaluable for the overworked veterinary inventory manager. These tools augment your practice manager’s built-in inventory management systems by automating tasks and analyzing use patterns to reduce human error and eliminate extra steps.

The ideal veterinary inventory management application integrates with your practice management software and augments built-in features, rather than complicating or working against them. If you’re struggling with two separate systems, consider adopting cloud-based veterinary management software that allows ongoing updates and easy access from anywhere, including at home.

Training the staff

Veterinary inventory management is more complex than it initially seems. Most team members elevated to this position are left to devise an order process that meets clinic needs. However, investing in a training program or CE course for your inventory manager can get them up to speed quickly. Also, reducing the trial and error period can significantly improve overall hospital efficiency and ensure everyone has the necessary supplies to care for pets and pet owners. Additionally, all team members should understand how the inventory system works and their role in reporting low stocks or expired items.

Assign a team member as the dedicated inventory manager and provide training to ensure consistent protocols. Once the inventory person establishes protocols, the rest of the team should be trained to follow them properly.

Implementing technology

If your practice management software lacks the functional inventory features your hospital needs, consider a dedicated veterinary inventory management software that integrates with your existing software. Like software-based systems, standalone inventory platforms can provide real-time data on stock levels, track usage, generate automated reorders, and enhance efficiency.

Veterinary distributors can also provide clinics with technological solutions to their inventory woes. Barcoding and radio-frequency identification (RFID) systems can improve inventory tracking and reduce human error during the order process, especially for larger hospitals. This strategy works well if your clinic partners closely with one distributor instead of many, which can also help streamline order day.

A software system can help you determine when items need reordering, but this is not a fail-safe method because missed charges and wasted products can lead to inaccurate counts and stock depletion. Relying on team members to report items to a “want list” is also unreliable. A physical tagging system provides a backup - place a tag around the box or package that, once opened, triggers a reorder. Team members drop the tags into a specific container, and the inventory manager uses them to help create weekly order lists.

Optimizing supplier relationships

Strong supplier and manufacturer relationships can get your hospital priority service and beneficial extras, such as continuing education opportunities. Building a relationship with your rep will also ensure you stay informed about new products and supply changes that may affect your clients or patients.

Streamlining unpacking

In addition to tracking and ordering, unpacking boxes can be inefficient. To reduce the physical workload of unpacking and breaking down boxes, consolidate orders to once weekly. Work with your distributor to find local warehouses that offer reusable packaging to minimize waste and eliminate box and packing material cleanup.

Considering security checks and balances

Theft, diversion, or misuse is a concern for veterinary practices, especially with controlled substances. Keep close tabs on inventory counts to help you identify these issues. Take preventive steps such as limiting access to storage areas, especially for controlled substances and high-value items, and consider strategically placed security cameras.

Conclusion

Training inventory managers and providing them with capable veterinary software empowers them to own their role and establish processes that solve the practice’s inventory problems. Leveraging technology to implement veterinary inventory management best practices ensures you have products when needed and streamlines the inventory manager’s job. Investing time and resources into overhauling inventory benefits your bottom line and enhances patient care.