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Managing your Inventory



Competent inventory management is critical for all laboratories, regardless of size, to ensure

that supplies for all phases of testing are available, accessible and in-date. This is not only

critical for providing quality patient care, but necessary to achieve fiscal solvency, operational efficiency, responsive customer service and staff morale. After all, these supplies constitute close to 50% of a laboratory’s operating budget 1


The goals of any inventory control system should include 2 :

  • Current inventory information

  • The maintenance of sufficient amounts of reagents and supplies for current patient testing

  • Tracking dates when a lot number has been in use, and ensure that none of the reagents and supplies have expired,

  • Establishing reorder points and adequate timeframes for timely replacement

  • Improving operating budgets by limiting extra inventory and associated costs;

  • Proper storage conditions through environmental monitoring

An effective inventory control system should include the following 3 :


1. Inventory Identification

Each item in your inventory should have an item number, a quantity, and a basic description

that includes the vendor name and any other important details (such as lot number and

expiration date).


2. Inventory Updates

Pick an interval of time to regularly check inventory. The interval depends on how fast your

supplies move. Then compare what was purchased / acquired / received within a certain

time period (say, a week), as well as what was used during the same week. Your current

inventory should be equal to whatever the count last week was, minus all usage for the

week, plus the new inventory purchases.

Note: Store updated documents in an organized manner. Make sure to store your periodic

inventory checks organized according to month. This way, if you need inventory data for a

particular week, you can readily find it. It is also helpful in the case your accountant needs

any information.


3. Maintenance of the Right Level of Inventory

a. Analyze usage data

The goal of inventory management is to keep up with demand, and this means having

enough inventory to meet projected usage. If test systems or procedures have been in use

for a period of time, use historical data to predict (approximately) what the future use will be.


b. Decide how much stock to order and keep

How much you keep and how much you order depends on your level of usage, the type

and variety of supplies, and how much space you have available. If you have minimal

space, look at previous usage and ensure you have slightly more than that to meet

projected demand and for any unexpected situations. Always choose reliable suppliers who

can get you your inventory quickly and on time. If you have a larger space, consider taking

advantage of bulk discounts.


c. Choose a re-order point

The goal is to always have enough inventory to meet demand, while not carrying too much

inventory, as this ties up your capital and space unnecessarily. To know when to re-order,

one approach is to specify a minimum level of stock, at which point you always re order. For

supplies that move quickly, or have the potential to move quickly set a higher minimum level.Arrange to have some "safety stock" to get you through shortages from unexpected events.


d. Maintain proper storage conditions

Storage of reagents and supplies should always follow manufacturer’s recommendations

Consider inventory management software 4

Are you using a Laboratory Information Management System (LIMS) or an Electronic Lab

Notebook (ELN) to track your stock, standards and reagents?  If not, you should consider it. 

These systems can track and associate the reagents and consumables that are used with each test.  Today’s LIMS can provide also provide you with dashboards to track stock levels and notify you when you are getting low to trigger a reorder. 


Computerized inventory management systems provide many benefits that are hard to obtain

using paper methods or an in-house spreadsheet.  The ability to analyze the inventory, item

usage, purchasing history, and other areas (e.g., lot numbers) are important improvements to

spreadsheets and paper systems. A computerized system allows the lab to automate some of the manual physical counting steps using barcode scanning and provides the ability to analyze all aspects of inventory control and purchasing 5 .

The ability to streamline and automate many of the inventory control tasks will be increasingly important to reduce hands-on time while reducing stocking issues, and avoiding expiring reagents. The ability to ensure that the right reagent in the right quantity is present at the right time is critical to laboratory operations. This is especially relevant during this time of supply-chain problems and back-orders, compounded with personnel shortages. Negotiate the best price from vendors. Your stock ordering system should alert you when stock reaches a certain threshold. Your daily, monthly and annual product usage estimates will provide a good starting point for negotiating

with suppliers.


Many suppliers offer a discount for buying in bulk or setting up a repeat order. If you do not see the quantity you need on their website, it’s worth a quick call or email to the supplier. Most suppliers will be happy to put together a custom bulk order and you could save on their generic per-item prices.


Conclusion

The benefits of improved inventory management include the improved reliability of the

laboratory to deliver test results on time; a more efficient laboratory operation with improved

staff morale; improved vendor relationships; more accurate budgeting, and better cost control (reduced stock-outs and overstocks). Consider the advantages of automation to streamline these processes, and save on personnel time.


1 Computerized inventory management systems help labs stay in control. MLO staff. July 1, 2011

https://www.mlo-online.com/home/article/13004073/computerized-inventory-management-systems-

help-labs-stay-in-control

2 Inventory management from counting supplies to analyzing expenses. McHugh, T. Medical laboratory

Observer (MLO). June 1, 2012. https://www.mlo-online.com/home/article/13004454/inventory-

management-from-counting-supplies-to-analyzing-expenses

3 How To Control Inventory: 12 Steps. Hill-Trawick, K. Wikihow. November 13 2020.

http://www.wikihow.com/Control-Inventory

4 Laboratory Inventory Management Tips. Weed, K. Sept.27 2019. ThermoFisher.

https://www.thermofisher.com/blog/connectedlab/laboratory-inventory-management-tips/

5 Computerized inventory management systems help labs stay in control. MLO staff. July 1, 2011

https://www.mlo-online.com/home/article/13004073/computerized-inventory-management-systems-help-labs-stay-in-control

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