Medical/Dental Industry: Biz Savvy Makes Perfect Practices
By Stephen Bon

Vendor Relations and Purchasing: Strategies That Work

In the realm of medical and dentistry practices, the purchase of provisions and equipment happens on nearly a daily basis. The high price of everything - from office and exam room supplies, to furniture, pharmaceuticals, computers, x-ray machines, imaging tools and kitchen gadgets - can drain a smaller operation's resources, especially in start-up practices.

Even so, there's an upside. Industry pundits say several practical strategies derived from corporate models go a long way toward expediting purchasing tasks. Chief among these are an efficient inventory management system and effective communication with vendors.

Get a grip on inventory

Unplanned and last-minute purchasing habits can well nigh nickel-and-dime a practice to insolvency. To avoid cash leaks, or deluges in some cases, set up a few universal protocols.

• Devise a standard inventory management system. A large number of software packages feature inventory tracking components, which personnel can master with a bit of training. Many small to mid-size practices report saving hundreds to thousands of dollars a year just from keeping tabs on supplies.
• Appoint one staff person to research all purchases prior to buying. With so much information available via the Internet, price comparisons on software systems, computers and medical appliances are simpler than ever. Some vendor Web sites can pinpoint estimated costs almost to the penny, and many offer free product demonstrations.
• Assess current stock. It's not unusual for a practice owner to discover that support staff is ordering 20-pound copy paper for routine jobs when the 15-pound counterpart would do just as well; or that the office pens cost $6 apiece, when multi-packs of a cheaper brand would suffice.
• Join a purchasing group for greater discount opportunity. Some professional groups, such as the American Association of Family Practitioners provide this service, which allows considerable savings on routine purchases.
• Buy online. Internet "stores" frequently offer products at lower costs than their brick-and-mortar cousins, primarily because online operations carry minimal overhead.
• Demand product back-up. Repair service and warranty coverage are musts when purchasing items such as machinery or network hardware. Research the vendor's services regarding product guarantees, ongoing tech support and the availability of repair.
• Maintain meticulous vendor files and review them regularly. Include full contact information, invoice/payment dates and product particulars. Every six months or so, compare the data with new market prices for the same product or services. If current costs are too high, seek several competitive bids.

Vendor relations: Upfront works

A variation of the Golden Rule works nicely here: "Communicate with vendors as you would want them to communicate with you." The revised adage implies many criteria - honesty, clarity and negotiation, to name a few, that will benefit both vendor and purchaser.

• When dealing with several pharmaceutical representatives, consider hosting a single lunch or reception, with time set aside to speak with each sales rep individually. This method, rather than separate appointments, saves both vendor and practitioner a lot of time and energy.
• Ask vendors for consideration based on anticipated future purchases. To be competitive, major suppliers offer significant discounts if they expect clients to add or upgrade products in the next year or two. The best results come from assertive negotiation, with the buyer clearly communicating long term goals around the purchase. This strategy likewise applies to large-volume or repeat orders.
• Approach negotiations with a written list of pertinent questions. Examples are:

  - What support comes with the initial purchase?

  - Will the vendor's staff install equipment (e.g. network hardware, copy centers)?

  - Will the vendor provide training services for the practice's staff? When, where and for how many personnel?

  - Will new personnel receive training on equipment or software programs, if needed?

  - For new office management or ERM systems, will the vendor provide data-transfer assistance from the existing system?

  - What types of benefits are available with future purchases (e.g. additional training, discounted fees, etc)?

• Be assertive about payment terms. Do not hesitate to request a larger payment window, or lower monthly fees. As businesspersons, vendors understand the value of flexibility.

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