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How Todd County Animal Clinic Saved $363,000 Per Year With Inventory Ally

Learn how Todd County Animal Clinic saved $363,000 yearly with Inventory Ally, transforming inventory chaos into streamlined efficiency and paving the way for business expansion.

Emmitt Nantz
13 Mar 2024

Todd County Animal Clinic is a mixed-animal practice located in Elkton, Kentucky. With a rich history dating back to 1928, the hospital prides itself on being locally owned, locally employed, and locally committed. Dr. John Laster, who initially joined as a kennel attendant and large animal technician, assumed ownership in 2013. Under his leadership, the practice has experienced significant growth, evolving into a team of four veterinarians and 18 support staff, dedicated to serving 18,000 patients annually.

However, progress came with its share of challenges. Skyrocketing costs of goods sold (COGS) started taking big bites out of profits, and inefficient inventory management depleted team morale. These roadblocks led Dr. Laster to postpone plans for business expansion and new locations.

Pen, paper, and shaking bottles

One of the biggest hurdles with inventory management at Todd County Animal Clinic is that inventory is scattered across different locations. “We usually have two-to-four trucks on the road, and these trucks need to be stocked,” says Dr. Laster. “Back when we started, computers and a reliable internet connection were luxuries. We ran the entire business using a cell phone, pen, and paper.

In 2020, the clinic transitioned to a cloud-based PIMS for electronic inventory management. Despite this advancement, Dr. Laster shares that it was still quite cumbersome and involved a lot of manual counts. “With trucks on the road packed with inventory, plus a horse barn, a small animal hospital, and a bovine clinic in a neighboring town, it was impossible to keep an accurate count of stock, let alone predict usage. We replenished inventory reactively, guess-ordering items. At one point, our COGS hit a record of 47%.”

More impactful than the financial losses was losing team members who got worn out by the inventory management workload. “We take pride in low staff turnover,” he notes. “Losing two valuable team members within two years was nothing short of a disaster. They were great people, but the job got so frustrating and stressful that they couldn’t do it anymore.

One night, Dr. Laster came across Inventory Ally. He booked a demo the next morning, and in two days, the hospital was fully live.

In our quest for solutions, we set up an internal COGS task force, brought in outside experts, took inventory management courses, explored different tech tools, but none of it worked,” Dr. Laster shares. “In just 48 hours from our demo meeting, we implemented Inventory Ally, and it instantly resolved the problem we had been grappling with for years.

“For optimal inventory management, it’s crucial to ensure that supply precisely matches demand – neither exceeding nor falling short. Inventory Ally is designed to analyze the order history and consumption patterns and then optimize replenishment for each one.”

Emmitt Nantz, Co-Founder of Inventory Ally

Just-in-time inventory

Mixed animal practices are complex businesses, so a 34-38% COGS is considered normal,” Emmitt Nantz, Co-Founder of Inventory Ally, explains. “Todd County Animal Clinic came to us with 43% COGS. It was eating into half of their revenue. The primary reason for this was reactive ordering which leads to overstocking and waste. That’s the major driver of the cost of goods.

Dr. Laster confirms this diagnosis, as revealed during a full inventory audit. “We discovered $3000 worth of expired drugs alone. Previously, we ordered items almost every day, getting five to six boxes of inventory a week. That took time opening the packages, confirming receipt, and sorting the items on the shelf. As we organized our ordering practices and optimized turnover with Inventory Ally, we now only get one delivery on Tuesday, and we’re done for the week!

Within just four weeks, Todd County Animal Clinic saw remarkable results. In less than a month, COGS dropped from 43% to 31.9%. With $3 million in revenue, that’s $333,000 back to the bottom line.

Inventory on hand also decreased from $100,000 to $77,000, bringing another notable advantage in the form of tax savings. “In Kentucky, we have to pay taxes on all the inventory we have on hand every year,” explains Dr. Laster. “So for us, Inventory Ally brought not only the savings of cash flow but also a drop in tangible inventory tax by around $30,000 a year.

The key to this success is the unlocked predictability. “We are now in control as opposed to being reactive and chaotic,” he continues. “The beauty of Inventory Ally lies in its simplicity – no need for special training or business skills. Just input the numbers, and the system precisely guides us on what to order and in what quantities based on our consumption patterns. Inventory Ally keeps it straightforward with intuitive and user-friendly software.

Dr. Laster highlights the incredible time savings brought by the new system. “We now spend just four hours a week, compared to the need for a dedicated full-time position before,” he shares. “This newfound efficiency allows our team members to redirect their time to more meaningful tasks. For example, our technician, once solely dedicated to inventory management, can now focus on patient care and more fulfilling responsibilities. The positive effects on team well-being and employee retention are already showing long-term benefits.

“While having good people is essential, providing them with the right tools is equally crucial. Burning people out with inefficient processes is something you can’t afford.”

Dr. John Laster, Owner of Todd County Animal Clinic

Shoot the sacred cow

Talking about overcoming the biggest obstacle to growing a successful business, Dr. Laster reveals his philosophy: Shoot the sacred cow. “Don’t hesitate to question established practices. Treating a process as sacred can restrict your growth potential and limit new opportunities.
Don’t hold onto processes like managing inventory with pen and paper just because it’s the way you’ve always done it. Technology is developing rapidly, and it can do miracles for your business if you embrace it.

Now, with the significant savings and enhanced efficiency from Inventory Ally, the future looks a lot brighter for Todd County Animal Clinic.

Within this year, the prospect of opening a second location has become a tangible reality. This success also paves the way for a meaningful succession plan. We can now guide our children through veterinary school and welcome them into the fold of this family business, all made possible by the positive changes brought about by Inventory Ally. This journey is not just about overcoming challenges; it’s about building a legacy for the next generation.

“Nothing in our operations is treated as sacred. How we care for our team, help people, and contribute to our community – that’s what we hold sacred. But the processes themselves are not.”

Dr. John Laster, Owner of Todd County Animal Clinic

Three signs you’ve got a problem with inventory management:

  1. Stubborn COGS
  2. Reactive ordering
  3. Sense of overwhelm, spending excessive time on inventory