5 Strategies to Optimize Dental Procurement
Dental procurement plays a critical role in helping practices streamline their operations, reduce costs, and maintain the quality of care. As practices grow, procurement strategies become vital in managing the supply chain, ensuring consistency in patient care and supporting financial health.
Without an effective system in place, practices can face inefficiencies that increase expenses and reduce profit margins. To address these challenges, industry experts from this year’s DentalForum 2024 Fall Conference shared five key strategies to help optimize procurement and drive savings.
Top 5 Tips for Dental Procurement
Procurement within the dental industry involves the strategic sourcing and inventory management of materials, supplies, and services necessary for day-to-day operations. From negotiating with suppliers to ensuring adherence to formularies, procurement impacts every aspect of a dental practice’s financial performance.
For dental practices or DSOs operating at scale, the ability to streamline procurement processes can be a game-changer. Here are five expert-backed strategies to help dental practices enhance their procurement processes:
1. Implement uniform systems across locations.
Dr. Viren Patel, CEO of Smile Obsession, highlighted the importance of having a standardized system across multiple locations. “Smile Obsession currently operates fifteen locations with a team of thirty dentists and lacks a formal procurement system. Originally developed when we had just three locations, our formulary is now implemented from the outset of every new acquisition or de-novo establishment.”
By implementing a process from the beginning, Smile Obsession ensures consistency in both quality and operations. “As a branded entity, we mandate adherence to this formulary by all staff and practitioners to ensure uniform quality and consistency across all locations. Our objective is to deliver a consistent patient experience at each site, striving to build a best-in-class brand.”
2. Leverage relationships with manufacturers.
Aziza Abed, CEO of Empire Dental Arts, underscored the value of building strong relationships with manufacturers. “We do not have a formal procurement system, but the process we implemented saved over $200,000 in just the past year.” Abed explained that they started with creating a formulary based on the practice’s needs, and then worked directly with manufacturers to negotiate prices.
“Our management team monitors the cost of goods closely on the monthly profit and loss [P&L] statements and reviews the numbers with practice leaders to elevate their understanding of the impact that adhering to the formulary has on EBITDA [earnings before interest, taxes, depreciation, and amortization],” said Abed. Continuous education and engagement with team members also ensure adherence to procurement guidelines, further driving efficiency.
3. Adopt a centralized procurement platform.
The Heartland Dental senior director of strategic sourcing, Angelina Davito, emphasized the benefits of adopting a procurement platform. “Heartland implemented Dentira as our preferred procurement platform for clinical supplies purchasing in 2021, when we had about 1,500 supported offices.”
The platform helped Heartland achieve significant savings, with supplies spend decreasing by 25% as a percentage of revenue. However, Davito noted, “A procurement tool alone cannot fully transform purchasing behaviors. A coordinated change management plan led by doctors, executive leadership, and operations is essential for success.”
4. Ensure data-driven decision-making.
Abigail Castro, procurement specialist at GPS Dental, shared how visibility into procurement data is crucial for large DSOs. “We implemented Dentira’s procurement module when we had thirty-five practices in Q1 of 2023, with a plan to onboard new acquisitions as they went through the integration process.”
Having a centralized platform allowed GPS Dental to track spending, compare vendor pricing, and streamline budgets. “It definitely takes time to adjust and learn the system, but after the initial implementation, it becomes such a timesaver for everyone,” Castro explained. With access to detailed reports, GPS Dental can better manage procurement budgets and ensure practices focus on patient care.
5. Automate procurement processes.
Thomas O’Toole, director of procurement and logistics at Aspen Dental, advocated for automation within procurement systems. “Companies that support a wide network of locations should have an automated system where they can build out their formularies.”
An automated system allows locations to access contracted supplies and add non-formulary items when necessary. “The system should be able to tell them both preferred and global products, utilize an approval hierarchy, and electronically share data with distributors and manufacturers,” said O’Toole.
Automation ensures that procurement processes are not only efficient but also integrated with financial reporting, enhancing overall business control.
Drive Success in Dental Procurement
Effective dental procurement management can lead to significant cost savings and streamlined operations. By implementing uniform systems, leveraging relationships with vendors, adopting centralized procurement platforms, and ensuring automation, practices can better control their supply chain and financial health.
For successful procurement, it’s essential to not only invest in tools but also create a culture of collaboration between doctors and procurement teams. The result is more time focused on patient care and a stronger bottom line—both crucial to a thriving dental practice.
