Connect with us

John Marvin

Maintaining a High Performance Inventory

Take this path to big dividends and large profits.

mm

Published

on

IT’S NOT UNCOMMON for optometry practices to manage their frame inventory using a stock ordering system. This means that opticians sell the frames off the board leaving a need for replacing an empty space. If they have undisplayed frames, they will take the “under-stock” and put it in the empty space. This process continues until the frame rep visits to place a replenishment order.

It is also not uncommon for frame stock to “creep” into inventories that lack variety and fluctuate in value over time.

It is estimated that at least 50 percent of most private practice inventories turn one or less times a year (a turn is a sale). Only about 25 to 30 percent turn more than three times a year.

If a private optometry office has an inventory of 1,000 frames, then only about 250 to 300 are turning enough to generate profits. Another 50 percent hardly turn at all. This happens year after year.

Many optometry dispensaries have too many frames because they carry too many brands from too many manufacturers. A brand should have a minimum of 40 pieces to be properly merchandised. If you like a brand, then make a commitment to it.

Don’t purchase 18 pieces to “see how it will sell.” This is often done and when repeated over many months results in having 30 or 40 brands in inventory.

Advertisement

Limiting your number of manufacturers has several benefits. One is that you’re now important to that manufacturer; purchasing three or four brands each with 40 pieces gives you power. You’ll be able to negotiate unconventional exchange provisions, free shipping, better pricing (because you’re purchasing more). Selecting the right vendors is an important decision and should not be done casually.

You’ll want to know the sales representative but also their management. Make sure they have a large enough portfolio of brands that you can select more than one to display. Discuss up front your expectations on exchange policies, pricing and close out opportunities. It is your business and they should accommodate you, not force you to work on their terms.

An effective display and presentation of inventory should look like this:

  • A total of 800 frames in inventory
  • A total of 20 brands, each with 40 pieces
  • The 20 brands should be from no more than three or four manufacturers if possible

This inventory is a “display only” and opticians place an order for the frame the day it is sold. If the office finishes in-office, the frame is shipped directly to the office. If it will be finished at a lab, then the frame is drop shipped directly to the lab.

Using a computerized inventory enables an office to produce a daily, weekly and monthly report of the highest selling frames they carry. By not selling “off the board” these high selling frames are available every day for patients and customers to purchase.

When your sales reps visit the office, the report of their brands will show which frames should be exchanged due of lack of sales which continually optimizes the appeal of the frame inventory.

Advertisement

Using this approach increases the turn rate of a large portion of your inventory and doesn’t limit profit generated thanks to the ever-increasing customer appeal of your frame display.

If a brand consistently doesn’t perform, replace it all together with another brand, preferably one from the same manufacturer. If that’s not feasible, replace it with a brand from one of your other manufacturers.

By ordering frames each day from fewer manufacturers, they’ll gladly provide free shipping because they’re shipping several at once.

You will also receive smaller invoices more frequently which are much easier to manage from a cash flow perspective. Large orders placed by frame representative to restock openings in the display create large invoices they expect to be promptly paid.

This approach to managing your inventory creates a high performing optical paying you big dividends and large profits.

Advertisement

John D. Marvin has more than 25 years of experience in the ophthalmic and optometric practice industry. He is the president of Texas State Optical and writes about marketing, management and education at the practiceprinciples.net blog. You can email him at jdmarvin@tso.com.

Advertisement

SPONSORED VIDEO

SPONSORED BY WALMAN OPTICAL

Don’t Lose Patients to Online

In this compelling video, Dr. Mile Brujic of Premier Vision Group discusses all the ways that your practice beats the online competition—hands down! The formula for success? Don’t sell yourself short and acknowledge all the benefits that you, as a provider, give to your patients.

Promoted Headlines

Want more INVISION? Subscribe to our newsletter.

Comment

John Marvin

Why Do So Many ECPs Ignore the Power of Personal Touch?

Remember: your convenience is never as important as investing personally in relationships.

mm

Published

on

IN THIS TIME OF digital communication it’s easy to lose sight of one of the most important aspects of interaction — the personal touch.

In a month when stores are filled with expressions of affection, would those of us in a serious relationship send a digital Valentine’s Day card? (If you don’t understand the problem with this, let me save you some heartache, don’t do it.) There are occasions when only something personal will connect in a way that matters.

Teen Sees Color for the First Time — Watch Her Reaction
Videos

Teen Sees Color for the First Time — Watch Her Reaction

Video Shows Just How Fabulous Eyeglasses Were in the ’50s — Take a Look
Videos

Video Shows Just How Fabulous Eyeglasses Were in the ’50s — Take a Look

He Recorded a Song with His Optometry Equipment — and Absolutely Killed It
Videos

He Recorded a Song with His Optometry Equipment — and Absolutely Killed It

For years there has been a push to move practice owners into the digital age with websites, Facebook pages, and Instagram accounts. Practices have discarded traditional recall cards and embraced digital patient communication platforms. Now with preprogramed software, thousands of emails and text messages can be sent to communicate with patients.

I love this new digital age and all it gives us the ability to do. However, now and again, I am reminded of the power of the personal touch. I’ve recently had two experiences that emphasized this.

The first occurred with my wife. We decided to plan a long weekend to celebrate her birthday where we could enjoy some sun and sand. While by the resort pool, her phone rang. She didn’t recognize the number, but decided to answer it anyway. I watched as her curiosity turned into a smile. She said, “Thank you, thank you very much, that means a lot to me,” then hung up. She told me it was her eye doctor just calling to wish her a happy birthday.

You should know that my wife is two, maybe three, years past due in her annual eye exam, but that didn’t matter. Calling his patients on their birthday is important to him. He could have his digital communication program automatically send out a birthday email, but it just isn’t the same. It’s the time and commitment that lets his patients know he cares. It tells his patients that they have a relationship to him, not just a file or a spot on his schedule.

The second is when I recently purchased some eyewear from one of our network doctors. I was told they would be ready for pick up in about a week and they would notify me when it was ready. About five days later, they left a voicemail letting me know I could pick them up when it was convenient. Up to this point, the experience was pretty conventional. However, what happened next is impressive.

A couple of days after picking up the glasses, I received a handwritten thank you from the young lady who dispensed them. It was personal and even contained a comment regarding a topic we had casually discussed. Wow! I was impressed. Then a few days later, the doctor called to make sure I was pleased with the product and service. A phone call from the doctor after a handwritten thank you note from the optician, after a personal call to let me know my eyewear was ready? That is impressive.

All of that could have been automated — it would have been far more convenient for them and, arguably for me — but, in this instance, convenience is not as important as investing personally in the relationship. There is power in the personal touch.

Continue Reading

John Marvin

Sometimes Pulling the Goalie is the Best Decision to Make

Three examples of when and how you should go on the offensive.

mm

Published

on

MALCOLM GLADWELL IS ONE of my favorite authors. You may be familiar with his best-selling books David and Goliath, The Outliers, Blink and The Tipping Point.

In a recent episode of his podcast Revisionist History, Gladwell discusses his only rule for living: Pull the Goalie.

Hockey fans will know the meaning of this term. In some instances, a hockey coach may “pull the goalie” during a game to provide a sixth attacker and create an offensive advantage. However, when a coach chooses to do this, and under what circumstances, is controversial since it can make them defensively vulnerable.

It’s an allegory for the science of decision making. Deciding when to act or not act is something ECPs do all the time. And, as in hockey, those decisions can be second guessed and criticized by others.

I want to highlight three examples of when a business owner should decide to “pull the goalie” to create an advantage.

Hiring staff. If you are like most, you are constantly trying to determine if you have enough staff, should hire more, or let someone go. There are countless opinions about this. Most owners, like hockey coaches, are conservative in their decisions. If we think five staff members is the right number, we may try to operate with four. It is, after all, less expensive. We tell ourselves, “I would rather have four excellent people and pay them well than five who are mediocre.” But then one of our four all-stars leaves. Now we have three all-stars having a difficult time delivering the quality of service and care we expect. Everyone is frustrated, so we decide to hire someone. The first person with any optical or optometry background is hired whether or not they are the best fit. Now if we had pulled the goalie early and hired a fifth person, we could still have delivered the high level of service and taken the time to interview and hire an additional person. It is a dangerous cycle. The staff is shorthanded, which frustrates everyone and the result is a greater risk of additional turnover.

Correcting a problem. Reluctance to do so is the result of three stages:

1) Denial, where we attempt to convince ourselves we don’t have a problem. We rationalize, justify and procrastinate. Like in hockey, we tell ourselves, “We are only down one goal, we can still win.” The longer we stay in this state the worse our problems become.

2) Attempting to minimize the effect of the problem, since it is less disruptive than doing what is necessary to solve it. We move a difficult person into another position, we attempt to work out the delivery issues with the supplier to avoid changing vendors. We spend a lot of energy trying to avoid making a decision.

3) Accepting reality and recognizing we should have pulled the goalie early and avoided the problem all together.

Embracing innovation. Too many ECPs are waiting out the clock and hoping for the best. They believe that somehow, someway, all of the competition, innovation, changes in reimbursement, and demanding consumers will just go away. It will go back to the way “it used to be.” This is a dangerous place to find yourself. The competition just gets stronger. What used to be a secure and predictable practice begins to lose ground. Other services and providers are offering more and charging less. The industry itself is fighting to stay relevant. The best advice when you find yourself in this situation is to pull the goalie early and go on the offensive. Attend meetings, conferences, visit innovators, learn about the consumer. Fight to grow, build and win.

The good news is that many won’t and that gives you the advantage.

Continue Reading

John Marvin

This Simple Addition to Your Daily Routine Can Make You a Better Manager

Keeping a journal is easier today than ever before.

mm

Published

on

EVERY DAY of your practice you create a health record of the patients you examine and prescribe for. You meticulously make note of not only refraction results but also pathology or potential pathology that might be indicated by the patient’s family history.

Can you imagine if you did not keep these records? Besides not being eligible for third-party payments, each time you examined the patient, you’d be starting over. What quality of care would you be providing if your attitude was, “I really don’t need to write anything down. I can keep it in my head.” Sounds ridiculous, right?

The reality is: This is an important part of building a practice that provides quality care — keeping meticulous records of each patient visit. Here is my question: Then how do we think we can manage our practice without the same attention to note-taking or using the same approach to building our practice?

As an owner/operator optometrist, you wear two hats, one as a qualified health care practitioner and the other as the business owner and manager. Currently you are probably keeping very good records and taking excellent notes as the OD but my guess is that you are trying to perform the other responsibility by just keeping everything memorized. I don’t know about you, but I learned long ago that you can’t trust your success to your memory. We learned that in high school. Then why do we not think this is a bad idea for ensuring our success as owners and managers of our business?

Keeping a journal is easier today than ever before. There are countless smartphone applications that enable you to dictate your thoughts and interactions with employees and vendors. I use an application called Evernote. I find it easy to use and keep an ongoing record of daily notes related to my professional responsibilities. I have also set up a separate personal journal, which I use to record thoughts, ideas, notes from books I read, etc. I consider this my personal health record.

There are a number of different approaches: Some like pen and paper, others prefer a combination of digital and analog. The method matters less than the consistency of writing down the notes and building the record. If you commit to doing this for 90 days, you’ll see how it can help you be more productive and provide you with a base of information on which to make good decisions. In my case, it’s helped me be a better professional, husband and father.

This is a perfect time of year to start creating your personal health record. To start, simply decide before you go home each evening (or better, throughout the day whenever you have a few minutes), to jot down your thoughts as the business owner and manager. Plan time each week to reflect back on your notes, and plan the upcoming week building on the record you’ve created. You will be amazed at what you’ve learned and recorded in one year’s time.

Continue Reading

Advertisement

Advertisement

Advertisement

Subscribe


BULLETINS

Get the most important news and business ideas for eyecare professionals every weekday from INVISION.

Instagram

Most Popular