Chapter 13 Inventory Systems and Supply Ordering Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.

Inventory Systems and Supply Ordering  Inventory includes ordering, receiving, and storing supplies.  Only one person should be in charge of ordering and inventory control. ◦ This person manages ordering, receiving, and storing supplies; manages hazardous waste; and maintains Material Safety Data Sheets (MSDSs).

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Managing Inventory  Inventory can be managed manually or using an electronic system.  An effective inventory control system need not be complicated. ◦ A list taped to the inside of the supply cabinet can be just as effective as an inventory control on a computer or an Internet system.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Types of Supplies  Expendable ◦ Items that are single use: anesthetics, cotton products  Nonexpendable supplies ◦ Reusable items of moderate cost: hand instruments  Capital supplies ◦ Reusable, costly items that are seldom replaced: computer, dental chair, dental unit

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Selecting Supplies  Dental supplies may be purchased. ◦ From a "full service" supplier  Advantages include next-day delivery.  Equipment repair  May have a representative coming to the office with advice and information about new products ◦ From "mail-order" suppliers  Can price shop for the best deal  Some have a problem with backorders.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Selecting Supplies  Medicaments can be purchased from a local pharmacy.  Surgical supply companies sell materials such as thermometers, surgical scissors, and hemostats.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Selecting Supplies  Business supplies may be purchased from local business office suppliers or by online ordering.  Cleaning supplies may be purchased at local merchants or discount houses.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Designing an Inventory System  An inventory system is a list of the stock and assets in the dental office.  Can be divided into two parts ◦ Capital equipment ◦ Expendable and nonexpendable supplies

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Capital Equipment Inventory Control  A spreadsheet can be used to maintain an inventory of capital equipment. ◦ Software such as Excel or Access can be used.  Computer software ◦ Allows you to track all of the data about a product ◦ Will help the accountant in determining depreciation

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Expendable and Nonexpendable Supplies Inventory Control  Can be maintained manually or on computer

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Automated Inventory Systems  Desired minimal and maximal stock levels need to be determined in advance ◦ When items are received, shipment data are entered into the program. ◦ When items are used, the removal of stock is entered into the program.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Dental Supply Inventory Systems  Types of systems include ◦ Tag  Products are placed in bins with tags that identify the product, quantity to order, and the reorder point. ◦ Barcode  A barcode reader is used to upload the product information and then download it into the dealer’s ordering system.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Manual Inventory Systems  The two common systems are ◦ The card system ◦ An alphabetical list  The computer software system is becoming more common.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Maintaining the Inventory System  Identify reorder points.  Determine supply quantity.  Receive supplies.  Receive credit.  Follow-up on back-ordered supplies.  Produce purchase orders (in large facilities).  Store supplies in appropriate location.  Maintain inventory control routinely.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Identifying Reorder Points  Automated systems will have some form of reorder point built into the program.  If using an in-office data system or a manual system, some form of identifying the reorder point must be selected. ◦ For example, colored tape or tags can be placed on items identifying the reorder point.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Determining Supply Quantity  Factors to consider when determining inventory amounts: ◦ Rate of use  Some items that do not expire can be purchased in bulk at a reduced rate. ◦ Shelf-life of a material  Some items such as film, impression material, and anesthetic deteriorate.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Determining Supply Quantity  Amount of capital outlay ◦ It is not wise to have large amounts of cash tied up in inventory.  Length of delivery time required ◦ If an item takes a long time to arrive, you will want to have a larger amount on hand.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Determining Supply Quantity  Amount of storage space ◦ It is not wise to fill up the storage space with one item just because it was a good deal.  Manufacturer's special ◦ Manufacturers and supply houses periodically offer specials (e.g., in mailers) that may be worthwhile.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Receiving Hazardous Material  Any hazardous material delivered to the office must contain an MSDS. ◦ These sheets should be kept on file.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. MSDSs  Include the manufacturer's name, address, and emergency numbers and information about their product including: ◦ Storage ◦ Health hazard data ◦ Spill or leak procedures ◦ Special safety precautions

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. MSDSs  If products are stored in their original containers, they do not need to be labeled.  If they are removed from the original container, they do need to be labeled. ◦ The label should have health hazard data.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Receiving Supplies  Every order that arrives in the office should have an invoice, a packing slip, or both. ◦ A packing slip just lists the enclosed items. ◦ An invoice lists the contents, prices, and total charge. ◦ The invoice may also serve as a statement.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Receiving Supplies  Check the contents against the packing slip to make sure everything is correct.  If payment was not sent based on the invoice, a monthly statement will be sent by the vendor.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Receiving Credit  Occasionally, an item must be returned. ◦ The supplier will send a credit memo indicating credit for the cost of the returned item.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Back-Ordered Supplies  If the item is not in stock at the supply house, a back-order memo will be issued, or it may be noted directly on the invoice.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Purchase Orders  In large organizations such as dental schools, supplies are ordered through a purchasing agent.  The items are listed on a requisition, and a purchase order is created.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Storage of Supplies  Supplies should be cycled so that existing stock is used first. ◦ Materials such as dental stone need to be stored in a dry area. ◦ Materials such as film and bonding agents are stored in a cool area.

Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved. Assumption of Responsibility  Remember, it is not possible to run an efficient office and treat patients without adequate supplies. ◦ To prepare to cement a bridge without the appropriate dental cement is a loss to the practice and can result in the loss of your job!