Building Relationships Is Key to Keeping a Practice’s Product Pipeline Moving

Product procurement is neither the flashiest nor the sexiest part of any industry, dentistry included. It is a detail that seemingly occurs in the background. However, recent events—like the COVID-19 pandemic and global shipping disruptions—have shown us how critical and fragile the supply chain is. Ensuring a practice has all necessary supplies, consumables, and personal protective equipment (PPE) should not be challenging. With the right precautions, it will not be.

Best Practices

Dental practices are different, so the best way to keep products in stock will vary. There are some helpful rules of thumb. Partnering with suppliers to address a practice’s specific needs is a good start.

“Relationships and consistency are key,” says Nate Sakamoto, director of procurement for Ultradent. “Having positive, long-term partnerships with trusted suppliers allows for better insights in trends and issues, earlier information on what’s happening in the market, and more consistent access to critical items during a time where every minute and every opportunity to stay ahead of the curve are crucial. Moreover, consistent orders in the pipeline are crucial for managing the flow of goods.”

Madison Schwarz, US business development and strategic relations manager for TDSC.com, Powered by Henry Schein, adds, “Some best practices that dental offices can implement include strategic planning discussions with dealer and supplier partners, establishing a supply budget, and creating and sticking to a preferred shopping list. In choosing a supply partner, dental teams should consider the product mix available, ensuring high-quality solutions, ease of placing orders, and fulfillment time. By choosing a primary dental dealer, it will make the ordering process easier, reduce the amount of time spent ordering, and save on shipping costs.”

She also advises practices to be realistic with their monthly needs, for the sake of product availability and financial responsibility.

“To further manage the office overhead goals and cash flow available, it’s important to implement a realistic, monthly supply budget and ordering cadence,” Schwarz says. “This is essentially a plan that allows offices to predictably choose their dental supply overhead percentage and reduce costs often caused by excess shipping charges for frequent and small orders. Private practices can share in the efficiencies and cost savings that a ‘formulary’ or preferred shopping list brings to the table—eliminating redundancies and incorporating a healthy mix of private label.”

Another recommendation is to embrace a system that automatically reorders supplies.

“The best practice is to have an automated system that we use at times to maintain purchasing specifics,” says Paul Tucker, president and CEO of Microcopy Dental. “But sometimes, we fall out of that and need to perform manually.”

Evolution

Procurement evolves. What was a good way to do something in 2003 is not necessarily the best way to do it in 2023.

“Over the past 20 years, procurement has changed significantly, evolving to be more strategic and value-added driven,” Sakamoto says. “Twenty years ago, I was actually working in China. During that time and over the next 5 to 10 years, companies moved items to China strictly for cost reasons. Many companies failed in the earlier years, looking at maximizing cost savings without measuring risk. Over time, good companies changed their view and looked at more total cost and value perspectives. They chose suppliers that may not be the lowest in cost but delivered higher quality at a reasonable price, thereby making the value proposition stronger.

“Over the last 5 years or so, there have been some additional concerns with natural disasters, human rights, political strife, and the pandemic,” he continues. “Having contingency plans in place has been very important.”

Like so many other facets of modern life, e-commerce is a driving force in dental procurement.

“Procurement has evolved in response to the digitization of retail, as well as the shrinking number of private dental practices and the growing number of group and DSO [dental support organization] practices,” Schwarz says. “Now, more than ever, it is easy to purchase items from our mobile phones or other devices with the click of a button. It makes it easier for offices to price-compare and research products on their own, speak to a sales [representative], or take additional time out of their day to place an order. With the increase in group and DSO practices, individual or smaller, private multisite practices need to focus on creating their own ‘formulary’ with the most transparent pricing they can find.”

Some things have not changed, however.

“Procurement has basically stayed the same,” Tucker observes. “Lead times vary and are much longer these days. Also, automation and digital procurement have advanced considerably.”

The Pandemic

One of the major headlines, because of the pandemic, was a shortage of supplies—most notably PPE. Fortunately, the supply chain seems to have caught up and learned from its shortcomings.

“The pandemic has definitely changed how we look at product shortages, but even more, it has helped us look more closely at risks in our supply chains,” Sakamoto says. “Understanding risks has pushed us to search for second sources, secure further out, analyze cost/benefits of long supply chains, and reevaluate relationships with suppliers. We can see companies that made knee-jerk reactions, that either reacted too late or overreacted to what was happening, causing supply chains that are still struggling with shortages or dealing with excess inventory, causing major issues either way. Those that reacted timely and worked closely with their suppliers without overcommitting are seeing a healthier supply chain.”

But dental was not the only health care sector affected. Happily, suppliers were responsive and able to meet clients’ needs.

“The entire health care industry was put in an extremely difficult position during the pandemic, especially in the PPE categories,” Schwarz says. “The supply chain reacted almost immediately, starting with manufacturers working to increase production capabilities and better handle spikes in demand. As a distributor, TDSC responded by vetting and adding additional sources of product. We also increased inventory levels to better meet demand spikes. However, the supply chain is a unique ecosystem and unexpected circumstances can certainly challenge us. With what we learned through that process, we believe we are far better positioned to address challenges as they come.”

Balance

There is always somewhat of a balancing act between cost and quality. Dentists do not want to spend an inordinate amount of money, but they also want the best supplies. In some cases, there really is not a choice.

“We have no choice because our products are specialized, so we, at times, are at the hands of the supplier,” Tucker observes.

When the choice is available, Schwarz recommends finding the best partner to supply and support that brand.

“‘Best product’ can only be defined by what is important to an office or the professional using the product,” Schwarz says. “At TDSC, we recommend looking for a supply partner that is an ‘authorized dealer’ of the brands our customers love. This is important when handling any potential promotions, product quality inquiries, and product education. If a dealer is authorized, offices can be confident that the product they are getting is safe and they can search for prices that fit their budget, while knowing they will get professional support if there are any issues. These benefits are important to consider when purchasing products from distributors.”

Sakamoto recommends seeking partners who are as interested in you as you are in them.

“Find a partner that is there for the long haul—that will treat you well and support your business,” Sakamoto says. “Another thing to consider is cost over time. Will the quality of the product impact the value of the purchase due to the ability to use the product over a longer period with less maintenance and other costs? Many times, a cheaper price will correlate to a shorter duration that the product will last. So, take a look at the cost/benefits as you look at initial cost vs cost over time.”

Mistakes

Learning from one’s mistakes helps in figuring out the right ways to do something. However, learning from someone else’s mistakes is an even better way to learn while avoiding the pain.

Sakamoto warns against reactionary buying and advises fostering a close relationship with suppliers.

“Practices that are reactionary in practice, overbuying or underbuying based on rumors or not staying up with what is happening in the market, really cause practices to purchase based on false information,” he says. “Stay in touch with your salespeople, ask them questions on what is happening in the market, try to understand short-term vs long-term supply chain issues and gather as much information as possible.”

Buying only what one needs saves money and reduces the amount of stock maintained in-house.

“Inventory mismanagement occurs in the order placement process, and it has a huge effect on the bottom line,” Schwarz says. “To drive further efficiencies in ordering, reduce the amount of inventory in the practice, reduce the chance of expired products, and free up cash flow. Offices should place focus on discontinuing the use of redundant or duplicate products in the practice, as this contributes to money sitting on the shelf in the form of supplies that will not be used over the next 30 to 60 days.”

Diversification

Although it is smart to maintain a good relationship with your supplier, that does not mean you cannot have relationships with others. Having multiple suppliers provides a layer of security.

“I would be very careful in single-sourcing,” Sakamoto says. “However, maintaining the majority of purchasing spend with a few key suppliers is the best practice to ensure that you can have priority with your major suppliers and can get product and information on the future outlook.”

Now, it is easier to compare suppliers to find the best match for your practice.

“Today’s landscape makes it easier than ever to compare prices and not waste too much time in that process,” Schwarz says. “That said, it has become more realistic for offices to have 2 to 3 preferred suppliers. This allows offices to compare prices of their preferred brands and keep an eye on promotions. However, more frequent purchasing and dividing your supply spend can lead to increased shipping spend, inventory inaccuracies or duplicate orders, plus additional time spent shopping. There is certainly a ‘risk and reward’ factor to a multiple-supplier strategy. The time it takes to source products from multiple suppliers can be extensive, and that time could be used in more productive ways to help enhance the practice.”

Something as run-of-the-mill as procurement and the supply chain used to be a minor detail in day-to-day business processes. However, because of several mitigating circumstances, the supply chain was thrust into the limelight. It underscores just how critical that seemingly minor detail can become.

“Supply chain has never received more attention than ever before,” Sakamoto says. “Ships stuck in the Panama Canal or lining the California coast, shortages of toilet paper and cleaning supplies, gas prices, wars, natural disasters, and politics have all contributed to unstable or fractured supply chains. Many people are jumping from place to place to try and get what they can without developing relationships that will support them in the long term. Looking at both the short-term needs while keeping an eye to the future will help companies make good decisions that will impact their business over time.”