It’s not the size that matters.
When comparing frame inventories between large and small practices, it’s expected that larger practices will have larger frame inventories. But does having a larger inventory mean higher sales? A 2015 assessment of optometric practice performance found that “inventory requirements do not grow in a linear fashion as the practice expands” (Management and Business Academy).
For example, the smallest 10% of MBA practices, with median annual gross revenue of less than $493,000, carried a median of 600 frames, while the largest 10% of practices ($2,133,000 or higher gross revenue) inventoried just twice as many frames (1,250 median).
- Management and Business Academy
Takeaway: While having a large inventory isn’t going to increase your bottom line, having an ideal selection that is optimized will.
Guidelines for frames by practice size (Management and Business Academy)
Having too much or too little inventory eats into your bottom line – money that should be put towards growing your practice. In addition, costs of inefficient inventory management include expenses such as extra costs for urgent restocking needs or replacing lost items.
In addition to optimizing your inventory, cloud-based software can help by:
ELIMINATING MANUAL INVENTORY MANAGEMENT
Adjustments, re-orders and constant checking is both a time suck and can result in errors. Having your inventory in the cloud frees up your staff by keeping the most up-to-date status of your inventory as changes happen. Use software such as OD Online’s to scan inventory barcodes directly into the system.
CREATING ACCOUNTABILITY
Misplaced or lost inventory are often written off as an expected expense, but an inventory tracking system can help reduce this expense by keeping your practice’s staff accountable. It does this by maintaining a record of when and where a person had access to the system. This passes ownership on to each individual and brings accountability to members of your staff. A transparent system helps reduce mistakes related to misplacement and mismanagement of inventory.
Practices who utilize an inventory management software can benefit both from cost savings and increased sales. When looking for software, some questions to consider are:
- How will it fit in with your practice’s current process?
- Does it include other integrations such as billing and EHR to bring everything under one umbrella?
- Will the inventory be updated automatically when new products get released?
- What is the process for updating inventory within the practice?
Invest in a good cloud-based inventory management software and both your practice and your patients will benefit.