Blog Series: Top 3 Supply Chain Realities In 2022 and How They Affect Your Bottom Line
In this series of 3 blog posts, we discuss the state of the supply chain in 2022 and what you can do to navigate challenges and protect your bottom line.
It was in the early months of 2020 that the world first experienced major supply disruptions. From toilet paper to groceries, the pandemic certainly played havoc with the global system, dubbing 2020 the “year of the supply chain”. Dental practices certainly were not immune to the rapid shocks and surges that occurred during this time. As a dental provider and practice owner, not only did you have to navigate a “new normal” with its ever-changing safety and sanitation protocols, reduced in-person visits, etc., but procuring the necessary personal protective equipment and day-to-day supplies became an immense challenge, one that undoubtedly cost both time and money.
Looking back on 2020, we can see that the industry has recovered from some of the initial challenges brought on by the pandemic. Patient load has increased, as has the supply of goods. Improvements in online scheduling and teledentistry have also eased some of the tension created by social distancing. Yet two years later, world-wide production and distribution bottlenecks still exist, causing the price of supplies to continue to rise. Pre-pandmeic, US dental clinics had spent an average 5.5% to 6.0% of their revenue on dental supplies. Post-pandemic, this spending has increased to 8.0% to 9.0%1.
Looking ahead, the reality is that the price hikes initially spurred by the pandemic are likely here to stay and a new new normal is beginning to set in. As an article recently published by The New York Times2 explains, “Mayhem at factories, ports and shipping yards, combined with the market dominance of major companies, is a key driver for rising prices…With the havoc at ports showing no signs of abating and prices for a vast array of goods still rising, the world is absorbing a troubling realization: Time alone will not solve the Great Supply Chain Disruption.”
So what can you do to help offset rising supply costs and protect your bottom line? There are a few strategies you can implement:
- Continue to keep a close eye on quotes and hold your vendors accountable to pricing commitments, especially when invoiced. If any discrepancies arise, be sure to flag them.
- Don’t hesitate to take advantage of any available discounts and promos. Tracking and acting on loyalty programs or yearly rebates is a great way to ensure you’re always getting the best price on supplies you need to keep on hand.
- Consider shopping with a primary supplier vs. multiple distribution channels, which can help you avoid additional shipping charges. Many suppliers offer dedicated customer preferred pricing as well as the opportunity to build an ongoing relationship, which is critical during periods of inflation.
If your practice, like many others, is struggling with the operational support necessary to facilitate supply management strategies such as these, consider an affiliation with Heartland Dental. Our Strategic Sourcing team negotiates with a network of preferred labs and suppliers to ensure our supported doctors have opportunities to receive an average of 45-50% savings. In addition, Heartland Dental has agreements in place with Trusted Strategic Partners, which secures pricing on dental supplies, labs, and equipment through 2023.
As a dental practice owner, your reality is that every minute and dollar spent on procuring supplies affects your bottom line. In today’s economic environment, it’s clear that procurement processes must evolve to keep pace with rising challenges and costs. Agility is going to be paramount—ensuring that your procurement process is as efficient as possible will be one of the primary keys to success. With the right operational efficiencies and support plan in place for your practice, Heartland Dental can support your day-to-day administrative workflow while you maintain your clinical independence, all while alleviating the stress of supply chain management so you can focus on what matters most: your patients.
Be sure to read the next two upcoming blog posts in this series and learn more about how you can successfully navigate the Supply Chain Realities of 2022.
Interested in learning how Heartland Dental can help?
Give us a call at (866) 929-0040 or request more information today.
References
1Booth, Jeremy. 2022. “Supply chain crisis increases dental costs.” Dental Tribune. https://www.dental-tribune.com/news/the-bullwhip-effect-supply-chain-crisis-increases-costs-for-dental-practices/.
2Goodman, Peter S. 2022. “A Normal Supply Chain? It's 'Unlikely' in 2022.” The New York Times. https://www.nytimes.com/2022/02/01/business/supply-chain-disruption.html.