Effective dental procurement has the unique ability to drive increased profits while creating a standardized, scalable process and foundational framework that ensures operational efficiencies, and safeguards your organization against margin leakage. By missing out on procurement opportunities, you may not only be leaving money on the table, but you could be exposing your organization to increased risk.
Like any business, DSOs require a myriad of dental supplies and services to operate effectively. A well-developed Procure-to-Pay (P2P) process — beginning with the knowledge that you require a good or service and ending with invoice payment — ensures you not only have what you need when you need it, but that you’re taking financially effective actions along the way.
Efficient, effective processes contribute to profitability, allowing you to do more with less. When the cost of production, including both fixed and variable costs, can be lowered or spread over higher production rates, an organization becomes more efficient. Lowering the costs of servicing a single patient means better margins and increased profits.
Let’s take a look at how effective procurement serves as the backbone of organizational health and improved profitability.
When it comes to gaining control over the buying practices of their individual dental practices, many DSOs seem to struggle. Lacking the proper tools to streamline and standardize processes, unify efforts and gather the critical data necessary to leverage purchasing power, for many, the procuring of supplies remains mainly a clerical task with little to no strategy- and all the while profits suffer.
One of the best ways to ensure your P2P process is as fruitful as possible is to invest in software specially designed with DSOs in mind.. Using procurement software means you can track your inventory, monitor spend against your budget, control purchasing behaviors, easily see and compare real-time dental supply prices and validate invoices prior to payment, all within a single interface.
The advantages of streamlined dental purchasing go far beyond convenience, however, and the bigger your organization, the heavier the impacts. Below are just a few other ways using a digital purchasing platform can transform your dental service organization’s success.
Making data-driven decisions helps you understand how elements of your organization interact with one another and allows you to maximize your Return on Investment (ROI).
Remember, when it comes to savings, a dollar saved is literally a dollar earned. Revenue, however, comes with cost (typically 66 cents of every dollar your practice makes goes towards funding business operations), so only a small portion makes it to your bottom line. This means to earn a dollar in actual profits a typical practice would need to bring in $2.90 in revenue.
The key to making these data-driven, profit-increasing decisions is having easy, accurate access to critical data such as tracking spend against budget, current inventory levels and real-time visibility on market pricing.
Whether you're searching for discount dental supplies, comparing quotes or finding the best deals on dental instruments, an integrated procurement platform, like Method, will help you get the most value from your budget. Standard procurement and inventory control practices ensure you buy what you need when necessary, and in quantities that make sense for your practice, improving your cash flow and minimizing your inventory risks.
With an electronic bidding system, you can ensure your ROI will be maximized as you can see offerings from numerous suppliers. Whether you're searching for discount dental supplies, comparing quotes or finding the best deals on dental instruments, an integrated procurement software will help you get the most value from your budget.
Competitive sourcing and negotiating can bring you other benefits, such as improved payment terms and shorter lead times.Your suppliers should be fighting for your business — and if you’re exploring your options, that means more than just lower pricing. Top suppliers should continuously search for leading industry trends and new product developments. They should be on the industry’s cusp, bringing you competitive advantages by offering you the latest items on the market or lower-cost alternative sources such as private label products.
The more extensive your procurement process is, the more innovative solutions you're sure to find and the more value you can extract from every dollar of spend.
At most dental practices, the office staff responsible for purchasing supplies has a host of other responsibilities demanding their attention, so procurement can become rushed and error-prone. The lack of an established process combined with a high volume demand and a wide-ranging list of supplies can create an overwhelming process for office staff to deal with. Poor inventory practices frustrate employees as they fail to locate supplies or know what needs to be purchased, wasting both time and potentially money due to the lack of accuracy in stock tracking.
Reliable, integrated inventory control alleviates these pain points while also providing more accurate financial reporting. Streamlining your procurement process with a comprehensive interface frees up your employees for other tasks, including training new staff members on the system and manually keeping track of supply stock. Using a cloud-based system also makes it easier for new employees to be trained in procurement while ensuring all valuable information is retained and easily accessible, regardless of turnover.
Price creep is the increase of prices, often without written notification, in small enough increments that they are likely to go unnoticed. However, they are implemented regularly enough that when gone unchecked, they can end up making a significant difference to your bottom line. Suppliers understand the dental industry. They know just how busy your employees are and they are aware that prices often go unmonitored and therefore, unchallenged. This leaves the door open for price creep to run rampant, eating away at your returns.
Establishing a robust procurement process signals to your suppliers that you are a standards-based business. Changes can easily be detected when consistently compared against your budget on an automated platform. Plus, maintaining an advanced procurement platform signals to suppliers that you do your due diligence both in verifying and challenging their prices, which motivates them to put their best foot forward.
Delivery performance directly affects production efficiency. If supplies do not arrive when needed, production delays occur while vendor solvency can leave you hanging out to dry. When using a refined procurement system, you can rest assured this robust platform will select predetermined vendors suited to meet your requirements.
Solid P2P processes further mitigate your risks, ensuring you pay the price you committed to for the items you received, no more and no less. Automating various processes allows you to scale your practice with no need for additional resources while driving maximum value from your suppliers and saving money.
The results of Dell’s second annual Global Technology Adoption Index (GTAI) reveal that organizations actively investing in big data, cloud and mobility have up to 53% higher growth rates compared to those who aren’t using the technologies. Creating an improved digital process for managing purchasing activities can eliminate costs associated with employee training, inaccuracies in inventory management, failure to discover the gaps in supply pricing and various other aspects of your practice. A cloud-based operating system provides an extra layer of security for your data. Should anything damage your hardware, all your data will remain untouched. You can save space, time and money with an automated system that gives you a competitive edge and keeps you on track with your financial goals.
All in all, an electronic procurement program allows you to streamline processes while maximizing results. Digital methods uncomplicate the complicated, leaving less room for error and more time for you to focus on making strategic cost-saving purchasing decisions. In the end, the process is all about being efficient with your money, and that’s just effective business.
We developed the Method platform as a comprehensive procurement system for dental practices. At each of the critical purchasing steps, Method makes it easy to control your spending and drive results to your bottom line. From digital inventory management to easy price comparison and streamlined ordering, Method takes the guesswork out of procurement. Our software is your place for all things budgeting, inventory tracking, reporting and staying up to date with comparing dental office products prices. Learn how we can improve your practice with our proven procurement process by contacting one of our experts or requesting a demo for our various dental supply management applications.
With Method, we make it simple to analyze data on your buying patterns and identify areas for improvement that will deliver financial results quickly. For larger organizations, Method can promote contract compliance and formulary usage across your entire team.
Our procurement analytics and user-friendly Amazon-like marketplace will help you ensure you never miss out on opportunities for savings. And our robust P2P process ensures suppliers are held accountable to quoted pricing, correct shipments, and accurate invoices, so you pay no more than you should.
Ready to leverage your purchasing volumes, maximize profits and get ready to scale, profitably? Call us now to arrange a personalized demo.
Method Procurement Technologies gives independent dental practices and DSOs the inventory management and procurement capabilities they need to succeed. With our full, end-to-end solution, ordering dental supplies is straightforward and hassle-free.
Learn how Method Procurement's spend management solutions can improve your bottom line. Get in touch with our team today or request a demo to see it for yourself.