contact lens economics
Contact Lens Inventory: Yes or No?
BY GARY GERBER, OD
Your 2:00 PM patient, Mrs. Inahurry, is complaining to your front desk staff that you never have her disposable lenses in stock, and she always needs them right away. It is, of course, your fault that she waits until the last day of wearing her last lens to alert you that she needs more lenses.
At 2:15 PM, your accountant calls to say your contact lens inventory has increased 10 percent over the year before. He advises you to pare it down.
More lenses or fewer lenses? Happier patients or bigger bank account? Let's look at both sides of this common problem.
In a perfect world, you'd have every patient's lenses available every time she needed them. In a perfect world, you'd also have a warehouse to store them and a system to keep track of what you had as well as the money to pay for them. In this perfect world, you gain the advantage of exceptional customer service. You also find that your revenue from dispensing lenses increases dramatically. Why? Because your previous competitors (telephone and Internet dispensers) are having a tough time dealing with the ultimate convenience you provide. Indeed, no one can compete with your ability to dispense lenses any lenses immediately after examining your patient. So, the biggest benefit to a large inventory of lenses is immediate dispensing, resulting in happier patients and higher profits.
In this other perfect world, you have a lot of money in the bank. Why? Because it isn't tied up in inventory. Realize that after you buy a box of disposable lenses, you own it. You can't use the money spent on the lenses for anything else. Walk into your contact lens room and imagine that each box of lenses isn't filled with lenses but with the exact of amount of money you paid for each box. Now, add up all of the boxes in your lens room. All of that money your inventory carrying cost is not working for you. You can't spend it, you can't invest it you can't even see it.
The World Isn't Perfect
Admittedly the two above examples are on the extreme ends of the spectrum. But they do demonstrate that there are advantages to a large inventory or having none at all. Which is best?
As in most opto-dilemmas, there is no right answer, other than what works best for you. In this case, the "correct" amount of lenses to inventory would be the amount that maximizes patient satisfaction and decreases inventory carrying costs. My experience with clients is that keeping a small inventory of the correct powers is the best way to ride this admittedly elusive wave of too many vs. too few. Contact lens companies can be very helpful by recommending which powers to inventory. Cross-reference their recommendations with a quick scan of the powers you fit most (usually the same list), and you'll know what to stock. Also, many companies offer special pricing for inventory orders.
As far as how many, "just in time" inventory is your goal. Look at monthly trends and recall rates from previous years to determine the quantity to have on hand that will assure just the right mix. For those powers you do not have in stock, I recommend shipping the lenses to the patient directly from the company. This saves time and money and eliminates excess inventory, which is the worst kind of all.
So should you have a lens inventory? My answer is yes a small, manageable one that allows you to service most of your patients most of the time.
Dr. Gerber is the president of the Power Practice a company offering consulting, seminars and software solutions for optometrists. He can be reached at 800-867-9303 or www.PowerPractice.com.