Episode 778: Supply and Demand — Are You Doing it Right?

 Consultants Tiff and Denae address a top concern of many dental practices: supply budget and tracking. They break down their advice into four main points:

1. Counting your actual supplies

2. Figuring out a system

3. Ordering calendar

4. Avoiding overspending

Episode resources:

Reach out to Tiff and Denae: [email protected] 

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Transcript:

Tiffanie (00:01.294)

Dene back again with your beautiful brain. I am so excited to talk with you today. I saved some of my big ones for you because I like to, and by big ones, I mean like budgeting ones and numbers because I know you love numbers. I love people and I love numbers too and leadership, but you like really, you love them all, but like numbers are really what drive you. So I really, really was excited to have you on this one today. How are you?

 

Denae Black (00:30.154)

doing good, Tiff. How are you?

 

Tiffanie (00:31.674)

Yeah, I'm good. Thank you. I'm so good. I'm excited to hear your ideas because this is something that I talk with practices about all the time and I actually get a lot of requests from practices. I know my PETO practice a couple months ago was like, can you please take a look while you're here at our supplies because my budget and tracking just I think is a skew. And I know a practice I'm going back into in a couple weeks, the first week of December, I get to see them. They're one of my favorite practices, but something we worked on a ton.

 

was figuring out how to track the supplies and then how to budget and track the budget. So like tracking all of it and it totally changed the game for them. They were able to decrease by like 2% a month on what they were utilizing of their budget. So it was really cool. And I thought you have probably done this in a billion practices as well. And I wanted to...

 

pick your brain a little bit on supply budget and tracking. So I think starting from the beginning, and I think one thing, one piece that has been notoriously difficult for practices, I mean, since day one of my experience in dental, which was a long time ago, I feel like, is like figuring out how to track their supplies, what they need. And I think of it as like, when I go through and I do grocery order, right? And I'm like,

 

Denae Black (01:52.974)

Mm-hmm.

 

Tiffanie (01:54.25)

What's in my pantry? How many boxes of noodles do I have? Do I need more mac and cheese for the kids? Like, I'll go through and count like what I have and think what am I going to need this month? Or I think like weekly meal planning, right? So I'm like, okay, what am I doing for dinner every week and what supplies do I need? And I think we don't transition that really smoothly into supplies for the dental world. And I think supplies for practices.

 

Denae Black (01:57.963)

Thank you.

 

Tiffanie (02:21.982)

like their entire jobs and their entire degrees, people go for degrees in supply management and we still can't figure it out in a total practice. So what are your ideas starting with square one on like tracking actual supplies? How do you, how have you seen that work really well in practices in your experience?

 

Denae Black (02:29.188)

Mm-hmm. Yep.

 

Denae Black (02:43.51)

So I am a huge fan of the tag system of going in with, I mean, cotton swabs and impression materials and your bibs, all of it, right? So bunch up that last stack that you're gonna need to get through the next month because that's gonna be your indicator. Now it's time to reorder. So if you know on average you use X amount of patient bibs, then you're gonna...

 

Tiffanie (02:47.054)

Thank you.

 

Tiffanie (02:50.71)

That's nice.

 

Tiffanie (03:06.539)

Yeah.

 

Denae Black (03:11.946)

rubber band all of those patient bibs together, and you're gonna have a tag that is actually right in the, like in between the bib and the rubber band, the team can grab the tag, laminated tag, that just says, order patient bibs, right? Then they can go throw it in a bucket or in a bin or something where whoever does the ordering can go grab that bin and they very easily have a system, right, that's your system of,

 

Tiffanie (03:20.404)

Yeah.

 

Tiffanie (03:38.011)

Mm-hmm.

 

Denae Black (03:39.87)

what needs to get ordered. So just I like to if I love that you're talking like you compare it to grocery shopping. It's like, if I go to the grocery store and I see cheese is on sale, right? Let's say I know that I need a bag of cheese. But a lot of times you'll see it's like 10 bags of cheese for $10. Nobody is going to use that much. Unless it's like you're doing taco Tuesday for a huge group of people.

 

Tiffanie (03:42.324)

I love that.

 

Tiffanie (03:46.964)

Yeah.

 

Tiffanie (03:52.392)

Yeah.

 

Tiffanie (03:59.222)

Yeah.

 

Tiffanie (04:05.778)

Yeah.

 

Denae Black (04:06.774)

But it would be so easy to go in and say, oh, it's on sale, so I have to get 10 bags. Well, if you're anything like me, I'll get the 10 bags. And then all of a sudden, a few weeks later, all the cheese is moldy. So also being aware of how much do we actually need before it's gonna expire, that tag system will help you and your team be able to see when do we need to actually go in and place the order compared to...

 

Tiffanie (04:11.781)

deal.

 

Tiffanie (04:19.689)

Mm-hmm.

 

Denae Black (04:33.826)

how often we're actually gonna be using it and not get suckered in all of those sales.

 

Tiffanie (04:38.467)

Yeah, I love that. I love that. I do get suckered into the sales and my son's dad, Brody's dad used to tell me I'd come home and I'd be like, but it was on sale. And he's like, well, you got to spend money to save money. And I'm like, oh, that's like still in the back of my mind 15 years later. I'm like, oh, it's true. You know, I would buy 10 bags of cheese and then freeze it. And I'm like, this isn't the same unfrozen like, or defrosted. So I love that you said that. I think the tag system is fantastic. I have

 

Most of my practice is utilizing the tag system or something similar to it. And one thing I love the rubber band idea and I, I like to, um, have them like loop the rubber band through it too. Like put the laminated you guys. I think that's huge. She mentioned laminated. That's huge because then it doesn't get torn. Um, I make sure that the name, whatever the product is, and then the product number from the company you typically order from, put it on the tag and then just

 

hole, hole punch it, loop that rubber band through and then rubber band, whatever it is that you're needing to order. So I love that. And one thing you said was, be aware of what you need. So don't buy all the cheese just because it's on sale, right? So don't buy. Oh my gosh, I remember one time I had a girl doing ordering in my practice when I was in practice. And we had like bibs for two years because there was a bib sale and like, you know, they're not going to go bad. So fine, but

 

think we needed like six giant boxes of bibs. Like we had bibs for years. So sometimes the sales are worth it. Sometimes they're not. But I think the biggest piece there is like know how much cheese you need. So how many people are eating tacos? And then you're going to think like how much

 

How much cheese is each person going to utilize? Are we gonna have kids over that are gonna do quesadillas? Are we gonna need a little more cheese for some quesadillas on the side? What is this cheese situation gonna look like and there's 10 bags of cheese? Is that really, does that make sense? Is that what I need? And so, Danae, I'm thinking, logistically, I think practices struggle with supply and demand. So, bibs, for instance, right? You said take that stack of what you would need. I think that-

 

Tiffanie (06:50.19)

practices don't tend to, like they're guesstimating, and they don't tend to think, well on average, how many patients do I see in a day? How many days do I have in a month? On average, how many patients do I see in a month? On average, how many crowns am I doing a month? So I need this much cement or fillings. I need to make sure I've got two things of bond or whatever. Danae, do you think that that's on traffic? Are you seeing anything else there that...

 

comes into play on supply and demand, because I think that's a struggle for a lot of practices.

 

Denae Black (07:22.398)

Yeah, I agree. But the good news is, is you can run reports to figure out how many patients did you see, you can run reports to find out how many crowns do you typically do. And so if you're trying to gauge how much do I truly need, run the reports, run the reports, the true like there is a story behind those, run them and then give yourself a little bit extra just in case because you never know.

 

if you're gonna need a little bit extra or not. But great news is, is the story's in the numbers and all you have to do is run the reports out of your software. It's gonna tell you what your procedure mix looks like. It's gonna tell you how many patients you're seeing. It's even gonna tell you how many adults versus how many kids are you seeing on average.

 

Tiffanie (08:02.582)

Mm-hmm.

 

Tiffanie (08:08.734)

Yeah. Yeah, I love that. This is why I bring Danae and you guys the numbers. So supply and demand, I feel like that's number one, really. And to answer the question that's on everyone's mind, Danae, how many times a month shall we order? Four?

 

Denae Black (08:24.431)

Ideally order once a month. Make it simple. Give yourself one time a month where you're sitting down and you're hammering out all of the ordering. It can be hard to get to that point. So if you're currently ordering every single week, maybe try to do it every two weeks and then go every three weeks until you get to the point where it's once a month.

 

Tiffanie (08:26.708)

Yes.

 

Tiffanie (08:33.1)

Yeah.

 

Tiffanie (08:41.751)

Yeah.

 

Tiffanie (08:46.194)

Yeah, I agree. It makes me laugh so hard. And I think that often I say this a lot, we forget that like life is life. And so it might look different, but we're doing the same thing in practice as we're typically doing at home. So whenever I see practices, I see dental assistants running around like mad like chickens every Thursday, like I got to get my order and I got it. It's Thursday, I got to get my order in. And I'm like, wow, you are the you are the grocery

 

Tiffanie (09:15.326)

I'm only shopping for this week and this week only. I want you guys to think about this, doctors, too. When you grocery shop one week at a time, you're typically spending more money than if you were to bulk buy many of the things that you're ordering every month. It would be like never using Costco for anything and buying once a week from your local grocery store.

 

instead of buying taquitos in bulk from Costco or buying every two weeks you're buying paper towels because you only got three the last time instead of buying in bulk from Costco. So I think of it the same way if we can get down to one time per month maybe two and that two would be like a spare like a flex order if there's something in there.

 

I think that really, really truly saves money, saves time, saves energy, and saves so much stress that running around frantic like it's order day is chaos. And you can't, it's hard to keep up to on the tag for any system that you're using when you're doing it so frequently. So I think that's great. So be aware of what you need. So figure out your supply and demand, which is actually really simple. So don't let that overwhelm you. Figure out your system. The tag system is fantastic. And then make sure you're ordering one time, maybe two times a month.

 

And like Dene said, if you're ordering more than two now, back it down to two a month and do every other week, every two weeks or whatever. And then Dene, so tracking is huge, right? So we've got supply and demand, but then we've also got a budget, right? So our grocery bill, we could easily, I'm sure, spend 2000 plus dollars a month on groceries, but-

 

does our account allow for that? We typically will budget at home to say, what does our account allow for when it comes to food, when it comes to eating out, when it comes to things like that. So we have to do the same thing in the practice. So this is also really great for team members to know, because I don't think everybody understands this, but there's a percentage that goes along with every expense that a practice has when money's going out and that's part of your overhead. So, Denae, what do you typically tell practices

 

Tiffanie (11:36.798)

And I think it's a dental 18 standard and across the, it's a dental standard, you guys, just FYI, like this is a standard. But Danae, what do you suggest, one, for what that budget should be, how do they find it? And then two, what's your best way that you've found to really keep track of that and make sure we're not overspending?

 

Denae Black (11:55.21)

Yeah, yeah. So anytime that you're looking at expenses and a dental practice, right, there's two different types of expenses. You have fixed expenses, which are pretty standard, your mortgage or your rent is always going to be the same. It's a fixed expense. Typically, your team expense is pretty much a fixed expense, it's going to be the same, no matter what you produce or collect. But the other type of expense is a variable expense. And that's going to be an expense of

 

the more you produce or the more that you collect, the more that expense is gonna go up. So your dental supplies, your labs, those are gonna be considered variable expenses. So the best way to figure that out is gonna be based off of a percentage of what you produce or what you collect. What we typically say is you wanna keep your dental supplies and your labs within 5% to 8% of what you produced.

 

Tiffanie (12:40.238)

Thank you.

 

Denae Black (12:51.23)

or collected, adjusted production, what you produced the month before.

 

Tiffanie (12:54.126)

Mm-hmm.

 

Yeah, I love that. I love that. So yeah, your supplies should then be five to eight percent of your collections or your production. But to explain that gap, because that's a pretty big gap, I really, really love to see practices closer to the five, six percent. The reason that it's a little bit of a buffer there is because of the PPE costs, which I think are starting to settle.

 

So I think backing it down and maybe just giving yourselves a budget of like five to six percent But knowing there's a little bit of flexibility there if you need it is a good place to start and whatever If you guys can keep your collections where they need to be at ninety eight percent of your production You should be able to utilize them that five percent of your collections towards your back office supplies and you guys

 

That also does not include front office supplies. Front office supplies were like a half percent because you're all electronic. You're not using all of the stamps and the paper and the envelopes and the business cards and all of those like we were before. So really they're just getting fun pens and sharpies and things that keep their lives more interesting and organized up front. So like a half percent will do up there. But really making sure the collections is in line so that you have that spend because if we're not taking it from there,

 

you were spending money that's like a credit card. I love credit cards. I'm spending money that I don't have yet. We're on those credit cards and then having to figure that out later. So I love that. So five to 8% really like I think both of us like that 5% number that makes us really, really happy. But then having that flexibility for PPE. I think that's beautiful. So finding that budget, figuring it out, telling the person who's ordering. So today I know we were chatting earlier, you're like one person ordering.

 

Tiffanie (14:49.57)

one time a month, keeps it clean, keeps the accountability there. How do you suggest that they really keep that accountability in line with like a tracking system? What do you usually have offices do?

 

Denae Black (15:01.642)

So absolutely, one person owns that task or is responsible for making sure that they know what the budget is, that they're tracking what's been ordered and that they're actually going in and ordering it. Easiest way to do it is gonna be an Excel tracker. So think very similar to like the envelope system, right? So let's go back to the grocery store scenario. If I go into the grocery store with $200.

 

cash. I have no cards on me, no debit cards, no credit cards. I just have $200 cash. I am going to find a way to stay within that $200 cash. So when they are tracking, when your team is tracking the expenses, have them start in the Excel with what their budget is. So ideally 5%, maybe up to 8%, but ideally 5% of what you collected the month before.

 

Tiffanie (15:38.301)

Oh, for sure.

 

Denae Black (15:55.894)

That's their cash on hand that they're going into the month with that they have to stay within. And then as they make those purchases and they're tracking it, they're able to start deducting from that top balance so that at the bottom they can see how much they have left.

 

Tiffanie (16:13.006)

That's perfect. I love that. I love the grocery store analogy. That's so smart because I would not go up to that cash register if I did not know for sure that I was $200 or less, including tax. I'm not standing up there telling them to put things back while people are behind me waiting in line. That would be so embarrassing. That was a good one. Good job. I love that. I think you guys, we forget because we're in this day and age of technology and everything, there's got to be an app for everything. There's got to be

 

Denae Black (16:22.199)

Yeah.

 

Denae Black (16:33.89)

Thank you.

 

Tiffanie (16:42.59)

a way that this can be automated. And we forget that sometimes doing an old school with an Excel spreadsheet gets the best results because it's forcing us to do the work and look at it instead of just having something automated that spits out the answer, right? So then we're like, oh, you have $50 left of your budget. And they're like, great. But when they had to do the work to put those numbers in there and watch it deduct, it hits home differently and it feels different. So those Excel spreadsheets truly are amazing.

 

Denae, I love it. Thank you so much. I knew your brain. I knew you'd just go wild for me for these percentages and everything. And I was like, she's going to be great. So things that we said, supply and demand, be aware of what you need. Pull those numbers. Denae is totally right. All of it's in your system. You just have to pull it. If you don't know how to pull it, you can reach out to us. We do know a lot about the systems. But honestly, you guys, reach out to your operating software company. They should be able to walk you through it. Or Google, I find most of my answers when it comes to those things on Google.

 

Denae Black (17:19.368)

Yep.

 

Tiffanie (17:40.118)

So figure out your supply and your demand for a month. What would you need for a month? Figure out your system that you're gonna utilize, if it's the tags, if it's something different, put it into place right away. So supply and demand first, put your system into place, figure out who's going to do your ordering consistently and doctors, it should not be you. Figure out who that's going to be and have them ordering one time a month, max two. Figure out your budget based on last month's collections. We really liked that 5% mark, we told you that.

 

And then make sure that tracker is in place and that you're utilizing it and that person is utilizing it. So you guys are both looking at it. It's being everything's being put in there and documented and you guys are both using it. Denae, can you think of anything? That felt like a lot of lots of laundry list of to do's, but that is how you're going to get your back office ordering supply and tracking in line. And you can use that same thing with the front office as well. But Denae, is there anything that you can think of that they need to add into there to make sure they're successful with this?

 

Denae Black (18:38.827)

I don't think so.

 

Tiffanie (18:40.774)

sweet. Awesome. Yeah, you give a ton of great ideas. I loved it. Thank you. I hope we're all ready to grocery shop as well. I hope you do the same thing at home. I know I am sitting here thinking like I could really update my process here, especially travel every other week. I'm like, it gets a little rough. So thank you for those ideas today. I think maybe I should do the, I think I need to do the envelope thing. That's my problem.

 

Denae Black (18:47.35)

Thank you.

 

Denae Black (19:03.338)

Yeah.

 

Tiffanie (19:03.702)

I love it. Thank you for being here today, Dene. Thank you for all of your ideas. I really do love like probing you and just picking out different things out of your brain. I truly appreciate you and value you. Guys, if you need anything, we're all here for you. We answer the questions. I don't know if you guys know that or not. But when you email us in at hello at thedele.a.team.com, those messages often come to the consultant team. So you are getting our brains on those.

 

newsletters, we write those, we do these podcasts. So just so you know, you are getting our true selves, our true info on all of that. And we'd love to hear from you. So either email us hello at thedollytom.com or drop us a review below, especially if you've got a tracking system idea. You love what we said and you've got an idea you want to add to it, put it below in those comments and those reviews, those five star reviews, because we see them. But then also guys, people who come to listen to our podcast or look at our stuff online, you can put it on our socials, because I know they go out there, like they're reading through those comments too. So you're not only helping us yourselves, but you're helping everybody else too. Thank you so much. Go serve. Denae, thank you for being here. And we'll catch you next time.