Q: Tell us about your work and the types of instruments you work with in your laboratory.
A: I work in early drug discovery doing preclinical work. I am in charge of all the analytical chemistry and compound management at this site. In my group there are eight people, and we use a number of ultrahigh-performance liquid chromatography (UHPLC) and mass spectrometry (MS) instruments. We have about fifteen UHPLCMS, ten preparative LC-MS, and four supercritical fluid (SFC)-MS systems. There is also all the other chemistry support equipment, such as ten flash chromatography instruments, microwave synthesizers, and all the robotics for automating synthesis and compound storage and management. Our site also has a biology department that handles all the screening assays, in vivo work, and bioanalytics. They have a lot of equipment for performing assays and high-content screening. The bioanalytics group also uses a number of triple quadrupole MS and Orbitrap MS instruments.
Q: When and why did you look to consolidate the servicing of all your laboratory equipment with one vendor?
A: The consolidation of lab services was done across the whole site, and all the equipment was placed under one vendor. Everything from pipettes and hot plates in chemistry to highend mass spectrometers was included in the service contract. The evaluation of vendors started three years ago, and the consolidation took place a couple of years ago. It started when our procurement group asked us to look for ways to cut spending and find efficiencies. We started out by questioning whether we needed a high-end contract for every instrument and if there was a priority set for servicing. We then decided to take advantage of the critical mass of all the instruments we had on-site to see if we could reduce the cost of servicing by offering it all to one vendor. I was the project lead of the evaluation process to figure out if service consolidation would be worthwhile for us.
Q: Can you explain in some detail the evaluation criteria and the process that you used?
A: We had some criteria that we were looking at, and we started prioritizing those. (See accompanying chart that lists these criteria.) First, of course, was the cost. Would it be different from what we were currently paying? Second, we wanted to know about the capabilities of the vendor. Could they actually do what they claimed they could? Along the lines of capabilities, were they trained and able to manage multiple vendors and original equipment manufacturers (OEMs)? Given the critical mass of instruments that we had, what would be the turnaround time for fixing the instruments? We looked at what they would offer in terms of on-site support. We envisioned that the model would have service engineers on-site to do the fixing.
There were also some specific things we wanted implemented. For instance, we wanted quality control samples to be run on routine instruments. We put all these criteria together, drafted a request for proposal, and submitted it to different vendors. Because this was something new to us, we wanted them to provide the exact same service, including preventive maintenance and calibrations, that we were getting from our current vendors. We wanted to compare apples to apples, at least during the first year to see if it would be beneficial for us to make the change. After the first year we could go back and make additional changes based on the vendor input. We started with a three-year contract because we realized that for a vendor to come in, make that investment, and create an infrastructure for the size of this contract, it needed to be a long-term partnership.
Q: How big of a risk was it? How did you make your final decision?
A: We evaluated four different vendors. We did our due diligence by finding out from their clients how the vendors operated. We had some internal expertise where consolidation of services was being done but on a much smaller scale. For the services for a whole site being consolidated, it was the first time. We got a good feeling from the proposal put forth by and the reputation of the vendor we ultimately ended up choosing. We believed it would work because they didn’t promise to fix everything themselves, and we still had vendor contracts in place for critical equipment. We knew it would succeed if it was a true partnership, where we helped them to help us.
Q: What kind of help did the vendor expect from you?
A: The vendor came in with a standard operating protocol, but then they expected us to provide them with our procedures and ways of doing things. We were expected to support them in terms of understanding the layout here. At the very beginning we had a few town hall meetings to make sure that the service engineers were introduced to the scientists. Sometimes people find it hard to make the change; hence, building a rapport was important. We believed that for this to work, the engineers had to be on-site and function as an extension of our group. That was one of the stipulations we put into the contract given the critical mass of instruments we had and the response time we needed. The service engineers were given their own offices, and they linked into our network. All calls went directly to them, and they coordinated everything for us.
In the first year we had meetings at the end of every week and quarterly calls with the vendor to evaluate how the program was going. Slowly we cut back to meetings every two weeks and then to once a month as we got used to each other. You need communication for it to work. There will be growing pains when you begin because the infrastructure at each site is slightly different and change is hard. The vendors are changing their ways, too, so communication is a must.
Q: Where did you see the biggest impact after this consolidation?
A: We did see cost savings and reduced time in administration of service contracts. Sometimes hidden costs are hard to quantify, but being an analytical chemistry group we had actually quantified the time our chemists spent on troubleshooting instruments, even with a service contract in place. Sometimes as much as 25 percent of their time was spent on non-lab activities. Once the consolidation took place, the service engineers took care of everything. We were then able to reduce the non-value-added time and increase our time spent in performing experiments. One of the common non-value-added activities was escorting the vendors in and out of the buildings and being with them while the instrument was being serviced. This was now taken care of by the on-site engineers.
The downtime of the instrument also decreased significantly. Typically, 80 to 90 percent of problems can be taken care of in a few hours, but usually with instrument vendor contracts the service engineers take time to get here. With the consolidated model the engineers on-site are able to tell us what they can fix themselves and what they can’t. For the equipment they cannot fix, they manage all the contracts with the OEM, and that really cuts down the administrative burden for us. They also have an inventory on-site for common instruments or parts, so we are not waiting for delivery. For the things they cannot fix, we don’t experience any loss in time, and yet we gain from all the front-line services and initial troubleshooting the on-site engineers provide. We have been really satisfied with this model.
Q: Does this consolidation model work well only for labs that have a certain critical mass of instruments?
A: If you have a lab with few instruments but the vendor you choose has a good presence in your geographical area, you could still take advantage of it. If the on-site engineers cannot fix the equipment, they have a good internal network within our geographical region that they can reach out to. They can bring in additional people to help alleviate the pressure and get the work done. So even smaller labs that do not have on-site engineers can benefit from the vendor expertise in the region. Ultimately it all depends on your infrastructure and needs. I saw this model as an asset management solution where the burden of dealing with multiple vendors was eliminated.