How to Quickly Assess Your Stock Room and Inventory Management System

As lab management experts, we are almost always brought in to “make things run better.” Over the years we have come to realize that this is means that we will find a messy consumables inventory program, and little to no cohesive asset management.

We will discuss Asset Management another day, but when it comes to consumables management, what lab manager wouldn’t want to decrease manual operations, paperwork, and lab operating costs?  Having an efficient stock room and Inventory management system in place is an often overlooked way to help accomplish these objectives.

Start with taking a look at your existing systems and ask yourself, “Do they make sense?”

Simple things to take a look at and assess in your STOCK ROOM:

  1. LOCATION – Is you stockroom easily accessible? Does the distance your staff have to travel allow for inherent delays? Is there an opportunity for materials to get lost or damaged?
  2. LAYOUT – Does material move quickly between areas? Is there adequate space for people to operate and get in and get out?
  3. INVENTORY MAP – Are locations easily identifiable? Do you have a master list with locations? Can items be located with ease and in a timely manner?
  4. SPACE USE – Is there dead space? Are pallets and boxes randomly stacked everywhere? Do you have old outdated material? Do you think you are out of room?

Next – Inventory Management! Being efficient and effective in managing inventory can increase the accuracy and speed of laboratory operations, such as receiving, stocking, inventory counts, inventory moves, picking, shipping, and receiving.

A simple checklist for your inventory management system should include the following:

  1. INVENTORY – Are your counts accurate? Is it the correct product? Is your pricing current? Are your mins/maxes set up? Can your existing inventory system customize inventory reports in a way that is meaningful for your lab in a timely matter?
  2. STOCKING – Are your labels up to date? Are they easily readable and/or identifiable? Does the product fit on the shelf? Is the product clean?
  3. SHIPPING/ RECEIVING – Are packages properly received? Are packages visually inspected for damaged? Do you have a return system in place? Can end users track their orders?

The majority of these questions should have simple answers. If you find yourself clueless or answering “No” to most then maybe it’s time for you to reevaluate your current system. Think big but start small. As contracted lab managers, we often see sites take on too much right from the start, only to revert old habits, simply because the challenge is too great.

Assess your situation, come up with a plan of corrective actions, execute that plan, maintain and adjust accordingly.

How to Make Your Operations Stronger via an Asset Management System

How many freezers do you have in your facility? When were your balances last calibrated? Can you answer both questions, within 1 minute? If you can’t, whether you’re the CEO, the Lab Manager, or a scientist, then you need to up your game. By developing an asset management system, note this does not always mean an expensive system, you will have the data you need to make good decisions surrounding your lab operations at your fingertips. A solid asset management system will let you house and track any key pieces of data that you need surrounding your lab assets, which will in turn, allow you to have data driving the decisions that you make regarding your lab.

What these data points are vary from lab to lab, but they generally surround a few key points: what do you have, where is it, how much did it cost, and how much is it costing to maintain. In 95% of the labs to which I consult, I see that decisions that are made about lab equipment with little to no data. Examples:

  • Full service contracts on equipment that is never, or rarely breaks- resulting in huge, unnecessary spend
  • Equipment that is repaired regularly at full cost annually, often past the point at which a service contract would be financially beneficial
  • Equipment that dies because no lifecycle information is being tracked, so it dies when capital funds are already spent, or in the middle of a key project
  • Like items are PM’d on different schedules, due to inconsistencies in data management, that mean increased service/ travel costs

These things add up and can make a large financial impact on your lab maintenance costs. In one instance we cut $600,000 from a service contract budget for 1 client in 1 YEAR, simply by analyzing equipment service history vs. cost of a service contract. The ROI here is laughable, and is the gift that keeps on giving as your lab grows.

To many, the task of creating such a system seems daunting. It shouldn’t be. While the size and scope of your asset management, can, and should, become quite large as you grow, it is a very simple concept, and once you find the right system, just requires a methodical approach. The key to creating a successful system is in consulting the right members of your team, and making sure that you collect all of the data that your organization deems important. This generally means that you let Finance, Facilities, and Operations weigh in. I see way too many companies that allow Finance dictate what an asset is. Just because it is less than $5,000, doesn’t mean that it is unimportant (maybe just that it is unimportant to the accountants). That $3,000 centrifuge may be your only one, or it may require routing calibrations for GLP…but it is important to someone. Make sure that you speak with all governing groups within your organization to make sure that the system you create will support everyone, and make your whole Operations Team stronger. Finally, once you’ve figured out what you need, the implementation comes in a few methodical steps:

  1. Evaluate what data points you want to track:
    1. Obvious examples: Description, make, model, manufacturer, S/N, etc.
    2. Add ons: service history, end user, calibration schedules, costs, etc.
  2. What functionality do you want: will this simply house asset data or will it also function as a work order and document management system?
  3. Pick a system (Excel spreadsheet, Access database, purchased boxed CMMS)- all systems work, you just need to find what will meet your internal needs
  4. Gather the data from your internal assets
  5. Enter the data
  6. Write protocols to keep the data current

It is my believe that absolutely every organization can make better decisions with better data, and an asset management can provide that for you.