Top 40 Inventory Reorder Tweaker Tool

Welcome and Instructions

This tool will help you manage inventory orders more cost-effectively by identifying the reorder points that make
most sense for your practice, based on your willingness to risk running low on or depleting your stock.

What This Tool Can Do for You

The Top 40 Inventory Tweaker is a 2-part tool. It allows you to

Assess your attitude toward risk in inventory management: Are you cautious, moderate or aggressive when it
comes to reordering inventory?

Based on your attitude toward risk, determine the best reorder points for your practice, tweak reorder points for
seasons of high use, and spot opportunities to gradually phase-in the most cost-effective reorder points for your
practice.

How It Works

At the bottom of the screen you will see three tabs.

The first is this welcome screen
The second is a spreadsheet for calculating reorder points based on risk, seasonal use, and cost-
effectiveness: The Top 40 Reorder Tweaker Tool.
The third is a quiz that identifies your attitude toward risk in inventory management: How Risky Are You?

To Get Started

Identify your best-selling products.

Determine sales patterns over several months or one year. (Shelf counts, inventory purchasing records, and
sales receipts provide this data.)
Fill in the name of each product and your annual sales of that product in Top 40 Reorder Tweaker Tool
The Tweaker Tool will calculate reorder points for you.
Take the How Risky Are You? Quiz (Click on the second tab at the bottom of the screen.)
Match your color-coded attitude toward risk to the color-coded results in the Tweaker Tool to determine what are
the best reorder points for your practice
If sales peak and trough during the year, use the Tweaker Tool to determine seasonal reorder points.
(Instructions on Tweaker Tool page.)
To become more cost-effective in managing inventory, gradually adjust your reorder points to the next level of
riskiness. (Instructions on Tweaker Tool page.)

That's it! You now have a tool you can use to improve inventory management in your practice, based on your
willingness to balance risk against cost-effectiveness.
Source: www.aahanet.org
 Top 40 Inventory Tweaker Tool, Part 2
How Risky Are You?
Take This Quiz to Find Out!
Question Put an X in the box below your answer
Strongly agree Agree Disagree
I'd rather tie up money in inventory than risk losing a client.

6 weeks or more About 4 weeks Less than 3 weeks

How long does it to order, receive delivery, and stock a product?

Invest in a marketing Make a downpayment

campaign to boost on an expensive
Save it compliance piece of equipment
If I freed up $2500 by managing inventory turns, I would:

What Is Your Inventory Management Style?

Count up the number of X's in each color. If most of your responses are

Red = You are fearful and hesitant, worried more about making a mistake than maximizing cost-effectiveness. This can be appropriate for essential
veterinary supplies, such as needles, and for strategically timed orders of products that have high use during specific seasons.

Blue = You are confident, accepting that no system is perfect but certain that moderate ordering works for most products most of the time. This is
appropriate for some veterinary supplies and your most popular client supplies, such as pet food.

Green = You are willing to take the risk to get the return. This is appropriate for nonessential, low-use veterinary supplies and client products.
Now that you know your management style, please go to the bottom of the screen and click on Top 40 Reorder Tweaker Tool.
Copyright 2007 American Animal Hospital Association
Input information about your Top 40 products on this side of the form. The Tweaker Tool Calculates New Reorder Points for You!
Extreme Moderate Bold

# of Units Your Normal Cost- Go for

Product Name Sold Annually Reorder Point* Fearful Hesitant Cautious Confident Effective the gold!
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
 0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0

Notes:
*Many practices reorder based on the number of units in inventory. Your normal reorder point is the number of units sitting on the shelf that triggers
a reorder.
Use This Tweaker to Reduce Shelf-Sitting Time and Boost Cost-Effectiveness
By comparing Your Normal Reorder Point to the numbers generated by the Tweaker Tool, you can judge the cost-effectiveness of your inventory
management. The following list explains how long supplies sit unprofitably on the shelf before they are sold:

Fearful: A minimum of 3-month supply on hand. Unless supplies are difficult to obtain or your distributor is entirely unreliable, this is probably too
conservative, even for essential supplies.

Hesitant: Averages 2-month supply always on hand. Does it really take 8 weeks to order, receive and stock these products?

Cautious/Confident: A 6-week or 5-week supply always on hand. May be appropriate for most essential or hard-to-get veterinary supplies.

Cost-Effective: A 1-month supply always on hand. This is appropriate for most popular client products.

Go for the Gold!: Less than 3-week supply always on hand. This is appropriate if your staff and distributor are on top of their game and you are
willing to risk the possibility of occasionally running short (or out of) some supplies.

To become more cost-effective: For each product, read across the row until you find the color-coded number that most closely matches Your
Normal Reorder Point. Then adopt the reorder point given in the next column to the right. In this way you can gradually work your way across
the chart until you settle on the reorder point that makes most sense for your practice's needs and your tolerance for risk.