1. Inventory Control and Purchasing Jeff Steele, LDO, ABOC, CPOT Spokane Community College

2. Objectives  Define: rate of use, order point, shelf life, purchase order, packing slip, invoice and back order  List guidelines for ordering supplies  Describe the process of stocking new supplies

3. Overview  Running out of supplies can create an unnecessary crises  Effective inventory control can eliminate this problem, help reduce waste, and control practice costs  Although one person may be in charge of inventory, ultimately it is everyone’s responsibility to report when supplies are getting low

4. Establishing a System  When establishing an inventory control system, it is necessary to determine the reorder point and the order quantity for each item stocked  The re-order point is the minimum quantity of a given item which is adequate reserve  The order quantity is the optimal amount of a given item to be purchased at one time

5. Reorder Point  Based on three factors: 1. Rate of use: how much of the product is used in a given period 2. Lead time: time lapse between ordering and receiving the product 3. Margin of safety: time allowed to accommodate any delay in delivery

6. Order Quantity  Factors: 1. Rate of use: inefficient and not cost effective to order supplies too frequently 2. Shelf life: many products have a limited time before expiring, so too many will result in waste 3. Storage: large, bulky items consume a lot of valuable storage space 4. Probability of use: is there a new version or better product on the horizon? 5. Price breaks: often discounts relative to larger quantities are given

7. Ordering Guidelines 1. Be prepared: review the inventory and ask the doctors and staff if they have any additional requests (reduces multiple shipping costs) 2. Be specific: know what you need and how much. Have product numbers available if ordering on phone or internet, including descriptive details if there are multiple products similar in nature, to assure accuracy 3. Purchase orders: many practices use purchase orders, so have the number ready before placing order

8. Handling Back Orders  If the supplier can not fill the order, it is placed on back order  Back order notice should include an estimated arrival time for product. This give you an opportunity to seek supplies elsewhere if you cannot wait

9. Be Alert!  Be on the lookout for specials and authentic savings  Don’t be afraid to look elsewhere to see what other companies supply similar products for less costs  Take advantage of promotions and savings programs when applicable

10. Be Informed!  Part of your job is staying current on products and new products on the horizon that can make your office easier to manage  Review journals and catalogs and look for ideas that can be adapted to your office

11. Storing Supplies  Storage areas should be well organized  Bulky and heavy items should be stored low or on the floor  Clearly label all shelves and bins (also helps you identify when stocks are running low)

12. Stocking Fresh Supplies  Always check the invoice and packing slip against the products received to ensure accuracy  Immediately address any discrepancies with the supplier. Have purchase order number, packing slip and invoice numbers handy for quick service  Time sensitive supplies should be checked for expiration dates and those that expire quickest should be moved to the front of the shelf!

13. Summary  The key to an effective inventory system is organization and a clear understanding of the needs of the practice  Everyone must contribute, to ensure the practice never runs out of much needed inventory!