Inventory Management
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Every multi-location dental group ends up having to choose where purchasing authority lives.
Neither direction is inherently wrong but there are potential pitfalls with either direction can fall into
The choice is rarely all or nothing, and the groups that get it right stop treating it that way.
Purchasing is a set of separate decisions, each with a natural owner. Some produce real savings when they move to the center. Others produce support tickets.
Below is the split, decision by decision, with an owner for each, so your group keeps its buying power and your offices keep their shelves stocked.
With centralized purchasing, the support office chooses suppliers, negotiates prices, and approves products. Local teams order through a shared platform from a list the center controls.
With decentralized purchasing, each office picks its own suppliers and manages its own orders. Groups built through acquisition usually start here, because every practice arrives with buying habits already in place.
Between the two sits the center-led model. The center sets strategy and locations execute within guardrails.
The case for each model comes down to what it buys you. Start with the side that usually wins the budget conversation.
A supplier discounts a product because it can count on the volume. Twenty offices ordering the same composite at a committed quantity is a forecast the supplier can plan around. Twenty offices each ordering a few units when they run low looks like twenty small customers, and gets priced like it.
That means buying power depends on the formulary holding. If locations order off-list whenever it's convenient, the committed volume never shows up. With that condition in mind, these are the four things centralization delivers.
A negotiated price only matters on the orders placed at that price. Centralization makes the volume commitment credible, because one team can promise a supplier a defined share of spend in a category and the supplier can hold the group to it. Rebates, freight minimums, and payment terms then apply to every location at once instead of being renegotiated office by office.
Groups too small to negotiate alone can pair central buying with a group purchasing organization to add volume. The arithmetic stays the same either way. A group with a strong contract and weak adoption still pays close to list.
When every office uses the same bonding agent, a spike in sensitivity complaints at one location points to technique, and you can trace it. Standard products give the clinical side something to measure.
Clinicians often end up agreeing with procurement here, provided they had a say in the list.
A decentralized group usually learns what it spent on supplies from the monthly P&L, weeks after the orders shipped. Centralized purchasing puts the data in one place, so spend by category, supplier, and location sits in a single report, price variance on identical products shows up across offices, and off-contract purchases get flagged as they happen rather than discovered at quarter end.
Research has found that centralized procurement teams show lower rates of maverick buying and more electronic approvals than decentralized peers. Visibility makes both possible. You can't manage a purchase you can't see.
Every order carries administrative cost in the requisition, the approval, the purchase order, and the invoice match. Decentralized groups pay that cost at every location, often by hand. Centralizing the process changes the math
In APQC's benchmarking, organizations with centralized direct procurement spent $4.92 per $1,000 of revenue on procurement, compared with $6.10 for decentralized organizations. Those figures span industries, but the mechanism carries over to dental.
That's the case your CFO is making. Your practice managers' case deserves the same weight.
Centralization creates lasting costs when purchasing decisions move away from the people managing daily patient needs. The costs tend to outlive a successful rollout, because they show up in habits rather than in reports.
A central team working through a queue can't match an assistant who walks to the supply closet and sees the empty bin. When restocking depends on the center, orders wait on approvals designed for large purchases, rush shipments eat the discount the contract was supposed to capture, and staff learn that the fastest path is the old supplier. Each of those outcomes costs more than the price difference centralization was meant to save.
A dentist who has used the same impression material for fifteen years has reasons, some clinical and some habit. Swapping it by memo produces predictable results. Personal orders go on a doctor's card and never hit the platform. Rep samples become a regular supply source. Some doctors stop engaging with procurement entirely. The approved list saves money on paper while actual orders drift back to where they started.
When every order routes through the support office, the procurement team's calendar sets the pace for every location. Approval queues back up during vacations or turnover. Locations stop requesting and start stockpiling. The central team spends its days clicking approve instead of negotiating, which leaves no time for the supplier work that justified centralizing in the first place.
An acquired practice arrives with a rep who knows the doctor, delivery schedules that fit the office, and sometimes pricing it negotiated itself. Asking it to walk away at once creates friction. Staff see the switch as losing something that worked. The old supplier keeps calling and offering to match. The purchasing mandate becomes the practice's first impression of the group, and it is rarely a good one.
Each of these costs grows when centralization is treated as one big switch.
Ask a dental group whether it has centralized purchasing and you'll usually get a yes or a no. The accurate answer is almost always partial, because purchasing is six decisions with different owners and different stakes.
Centralize all six and the support office manages orders without knowing each practice's needs. Leave all six local and offices pay different prices for the same supplies. Neither extreme survives contact with a Thursday afternoon when a location runs out of impression material.
The split that holds keeps suppliers, pricing, and product selection central, where group buying power produces savings. Ordering, inventory, and small approvals stay local, where teams can see the schedule and the stock levels. APQC found that ordering is the costliest procurement process, and a shared platform with electronic approvals and automatic purchase orders can bring that cost down while local teams keep placing the orders.
Schedule a demo with Method to map purchasing by location and decide where each responsibility belongs.
For DSOs growing through acquisition, every new practice restarts the centralization question at one office. The instinct is to cut the practice over to group suppliers right away. That instinct is how maverick spend starts. A practice suddenly cut off from familiar suppliers keeps ordering from them anyway, off the platform, where nobody can see it.
A sequence that holds up better runs in four steps.
Sequenced this way, the new practice gets a reason to adopt the system before anyone asks it to give something up.
Your locations need to restock fast. Your group needs to buy at the best price. The pressure between those two needs is why the centralized vs decentralized question never seems to settle, and picking one side for the entire purchasing function guarantees you'll feel the costs of the other side every week.
Method gives multi-location dental groups one system for both halves of the split. Your central team manages suppliers, pricing, and the formulary, while each location orders from its approved list on Method's procurement platform, with approval thresholds, location budgets, and purchase orders built in.
Schedule a demo to see how your group's spend would look under a category-by-category model of centralized purchasing.
What is centralized purchasing?
Centralized purchasing is a structure where one team manages supplier relationships, pricing, and approved products for every location in an organization. In a dental group, that team usually sits at the support office and maintains the formulary locations order from. Locations often still place their own orders, but from a list the central team controls. The goal is to concentrate volume so the group negotiates better prices and sees total spend in one place.
What is the difference between centralized procurement and decentralized procurement?
Centralized procurement puts sourcing, pricing, and product decisions with one team. Decentralized procurement lets each location make those decisions for itself. Centralized procurement typically delivers lower costs and better visibility, while decentralized procurement delivers faster local response. For a dental group, the difference shows up in whether ten offices pay one price for the same glove or ten different prices.
Does centralized purchasing actually save money?
Across industries, the benchmarking says yes. APQC found that organizations with centralized direct procurement spend $4.92 per $1,000 of revenue on procurement, versus $6.10 for decentralized organizations. For a dental group, the larger savings usually come from pricing, since committed volume earns better contract terms. Those savings depend on compliance, so a centralized contract that locations ignore saves very little.
What is a hybrid or center-led procurement model?
A center-led model keeps strategic decisions like supplier selection and contract negotiation at the center, while local teams handle day-to-day purchasing within set rules. Gartner's research shows center-led structures are now more common than fully centralized ones, at 51% of respondents versus 39%. For dental groups, the hybrid usually means central control of suppliers, pricing, and the formulary, with ordering and small approvals at each location.
How do you keep dentists on board when centralizing product selection?
Give clinicians authority over clinical products. A clinical committee with doctors from each specialty can approve which composites, bonding agents, and impression materials are acceptable, and the business team then picks the best price among those options. Non-clinical items like bibs and pouches can be standardized without doctor sign-off. Doctors who helped build the list are far more likely to order from it.
How does centralized purchasing affect multi-location inventory management?
Centralized purchasing gives the group a view of usage and stock across every office, which makes it possible to spot overstock at one location and shortages at another. Inventory counts and par levels still work best at the location, where the supplies sit. The combination lets each office manage its own shelves while the central team spots patterns, like a product that runs out every month at three offices.
What is maverick spend, and how does the hybrid model reduce it?
Maverick spend is any purchase made outside approved suppliers, contracts, or channels. In Ardent Partners' research, best-in-class procurement teams keep about 91.7% of spend under management, compared with 61.1% for everyone else. A hybrid model reduces maverick spend by making the approved path the fastest one, with approved products shown first and routine orders skipping approval. Staff tend to order around systems that slow them down, so speed works as a compliance tool.
Where should a dental group start with centralized purchasing?
Start with visibility. Put every location's ordering on one platform before changing suppliers or products, so you can see actual spend by category, supplier, and office. Next, centralize non-clinical categories, where savings are easy to show and resistance is low. Clinical categories come after that, through a committee that includes your doctors, and Method can map your current spend by location to show where to begin.
