Q: What are some tips to save money on supplies?

Keith Borglum

A: Supplies in your practice may cost more than you think. It costs extra for a vendor to come to your office and stock your shelves, but your office manager's wages to cover a weekly trip to the local big-box office-supply store may exceed any savings on supplies purchased that way compared with having them stocked by a vendor.

Some approaches to consider:

• Join a purchasing group such as one offered by a state or national medical association. The hospital with which you are affiliated also may offer one.
• Buy from discounters rather than retailers, and buy in bulk, within reason.
• Have your staff buy supplies online, with delivery (but not shelf-stocking), rather than spend time visiting stores.
• To prevent staff from purchasing expensive elective items, such as $5 pens when 15-cent pens would do, specify the types or brands of items you need.

Q: How do I keep track of supplies? We often run out of what I need, and at the most inconvenient times.

A: Many offices have no inventory control system and, therefore, experience supply shortages that necessitate last-minute ordering at premium prices. Most practices can't afford, or don't have the volume to support, digital-scanner control systems. The cost of physician inefficiency due to missing items often is higher than the cost of the supplies.

The following manual system is a simple, easy-to-use one that puts control of inventory in the hands of one person while still allowing anyone in the office to use supplies when needed without first having to check with someone else. Sub-systems for stocking each examination room or work station also can be created if desired.

The system:

• Determine the buying cycle for each item (how often you will shop for it: weekly, monthly, quarterly, etc.) depending on utilization and storage space. Most offices should order supplies weekly or monthly. If you have a sub-system for exam rooms or work stations, then your cycle will apply to re-stocking those areas from the supply room.
• Determine the amount of each item typically used during each buying cycle.
• Initially, buy enough of each item to last two buying cycles, and create two bundles of each item. Each bundle should contain enough of each item to last one buying cycle (except for items with expiration dates or seasonal items such as flu vaccine). Wrap each bundle with a piece of string or a rubber band, or put each bundle in a separate box, bag, or other container. To each bundle, attach a reusable tag labeled with the item name, supplier, last price paid per unit, buying cycle, order amount, and bundle item count.
• Prominently hang an envelope marked "Reorder envelope. Put tags here" in the supply room.
• When supplies are needed, any staff person can access a bundle, remove the tag, and drop the tag into the reorder envelope. One full and one partial bundle should remain for the item accessed.
• Assign an inventory control clerk to process tags and order new supplies according to the buying cycle. If your clerk orders supplies online, then have him or her check to see whether the online supplier has a function wherein re-orders equal to one of your bundles can be placed quickly and easily.
• When supplies arrive, the inventory control clerk should be the only one to open the delivery, compare the delivery invoice with the original order to confirm accuracy, and put away the items.
• Re-bundle items, and reattach the used tag to the new bundle to complete the ordering cycle.
• Place the new bundle of items behind the remaining bundle, which already may have been opened if demand for an item surged unexpectedly (for instance, to rotate inventory).

You can change suppliers, buying cycles, order amounts, and bundle size anytime as needed. Just alter the tags to reflect the changes.

Medical Economics Consultant Keith Borglum, CHBC, of Professional Management and Marketing, has been a licensed practice broker, appraiser, author, and management consultant to physicians for more than 25 years, is based in Santa Rosa, California, and practices nationally. Send your practice management questions to mepractice@advanstar.com
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