As we see smart inventory management being adopted more and more by healthcare, it only seems logical that related industries would benefit from IoT hardware and software solutions as well. Medical aesthetics is one of those healthcare adjacent industries that is handling high-value inventory, such as injectables (e.g. Botox and Juvederm) the management of which could “use a little facelift”. I recently read a 2014 article about best practices for optimizing inventory in these med spa settings and while it may seem dated, the fact that, even years later, inventory is still being managed with these ideas at the forefront is telling that it may be time for an upgrade.
In a nutshell, the article explains that medical aesthetic practices are similar to acute care facilities in that they have inventory that is extremely expensive and transportable, making them easy to misplace if not tracked properly. Other than lost inventory, the overstocking and understocking of products is also a big pain point. Not having the optimal amount of inventory in stock can impact business and revenue, especially considering the treatments being stocked account for the second largest operational expense in med aesthetic practices.
The article also breaks down the best practices as the following and I’ve provided Terso’s take on their suggestions:
Best practice #1: Schedule time to do regular counts of inventory throughout your practice
Terso’s Take: This is great advice to put into motion but doing this manually raises some questions.
What if you have inventory spread across multiple locations? This will mean that multiple people may be responsible for the same tasks and will have to communicate their inventory needs with one another, which can be tedious and error ridden even with the best system and people in place. Or, even worse, one person is responsible for managing inventory across the multiple locations, requiring them to be on-site to do regular counts (consider travel time, time spent at each location counting, travel expense reimbursement, etc).
What if the count is off? Human error is inevitable, and it should be expected that even with these regular product counts, there will be mistakes and they could be costly.
What if by the time you do the counts, certain products are at a critically low state? We have seen this happen across many industries we work with prior to the implementation of automated inventory management solutions. You think you have enough until you don’t and when that happens, you’re left in a pinch—either having to reschedule a patient’s procedure or having to expedite shipping and incur the exorbitant shipping costs.
Long story short—manual inventory is tough and although many businesses think that all they need is a good process, manual inventory processes are still, well, manual. With smart technology such as RFID, medical aesthetic practices are able to see in real-time what they have in stock and what they need more of. This isn’t done monthly, weekly, or even daily. This is done minute-by-minute, as inventory is stocked and consumed, giving these practices the visibility they need to make good business decisions quickly and efficiently through the power of data.
Best practice #2: Set PAR levels
Terso’s Take: This is a no-brainer. Determine the minimum or maximum quantity of a product that you should have on hand at any given time. This concept is easy to talk about but more difficult to implement because it requires a person to consistently enact the best practice listed above. If resources are limited or regular counts of products are inconsistent, then PAR levels quickly become a pipe dream. This is where the Internet of Things (IoT) comes in handy. Having a hardware and software solution that transfers data instantaneously with specific goals established allows businesses such as med aesthetic practices to utilize their staff in better ways. It automates the process of counting and eliminates the overstocking and understocking of inventory, greatly reducing unnecessary spend, and allows practices to schedule procedures more effectively and take on new clients more easily, which ultimately leads to increased revenue.
Terso has software that can manage this very thing for med aesthetic practices looking to streamline their inventory management process. Stratosphere provides users with the ability to:
- Set Periodic Automatic Replenishment (PAR) levels for specific products and locations
- Create default PAR levels to make it easier to apply a standard across your stocking locations
- See what is overstocked, fully stocked, in-stock, ready to reorder, and out of stock
Best practice #3: Cross check shipments vs. POs
Terso’s Take: Whether or not you have inventory management software, this best practice continues to hold true as being the best and unfortunately, it doesn’t prevent someone from making a mistake when receiving inventory. However, the right inventory management software will allow you to catch those mistakes after they have been made, allowing staff to remedy these situations faster. So, yes, continue to cross check your shipments against what you have ordered and make sure you have systems in place that allow you to have greater visibility of those products to alleviate mistakes made in the process.
Best practice #4: Put old product first
Terso’s Take: Every practice should organize products in a way that newer products are placed behind any existing items, so the older products are used first. This stocking best practice transcends manual and automated inventory management solutions. However, automated solutions can take things a step further. Inventory management software, such as Stratosphere, paired with smart enclosures, allow practices to see in real-time how much of the existing product is nearing expiration or is already expired. This provides peace of mind and elevates patient care. The last thing you want is for one of your patients to be injected with expired filler, which can have severe consequences. Luckily, with smart technology this can all be avoided.
Two things that the article failed to mention regarding managing med aesthetic inventory:
Temperature control: This is a very real issue when it comes to managing certain injectables, such as Dysport and Botox, which need to be kept at specific temperatures. A practice can have the best manual inventory process that has ever been implemented, but one power outage or faulty fridge, and they are looking at potentially hundreds of thousands of dollars’ worth of inventory lost. There are no temperature monitoring systems set in place, no ambient alarms, no specialized team waiting to jump into action with the purchase of a standard refrigerator. When we say smart technology, we mean it. Having RFID refrigerators powered by Terso means you gain real-time visibility of inventory that is securely stored in the fridge. With temperature safety and monitoring measures in place, practices can be alerted when something is amiss and help is just a phone call away.
Secure access and chain of custody: Products at med aesthetic practices may be small, but they are big in cost, which is why they are the items that most often seem to “grow legs and walk away.” While a standard lock and key enclosure may be suitable, it still doesn’t provide information as to who is accessing the products, how often, and how much they took. Many Terso smart devices are equipped with secure access technology, which allows customers to add and remove authorized users remotely and means that the devices can only be opened using an assigned access pass. With this technology, practices can instantly see who took what product and when.
Just as we wouldn’t send snail mail for daily communication, manual inventory management simply doesn’t cut it in today’s world. While the article we reference here outlines some important tactics to keep in mind when managing inventory, what’s missing is the technology required to meet the demands of inventory in 2022. Medical aesthetic practices, while unique, face many of the same inventory management challenges that Terso Solutions sees with other industries we serve such as acute care, medical device manufacturing, dental, and retinal. The issues that present themselves relate directly to trying to manage this inventory manually and while there are best practices to help counteract these challenges, the proper solution for enabling best practices lies in smart technology and IoT.