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Managing Your Chemical Inventory

As with any other organization, successful management of your laboratory entails a significant deal of business strategy and savvy.

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How digital systems can save money, eliminate safety risks, and increase productivity

While size and complexity differ considerably among laboratories, every lab manager must master a few essential tasks. They fit into two main categories: overseeing physical assets and managing human resources, with the synergistic goal of maximizing efficiency.

If you’re exploring methods to increase the efficiency and return on investment of your laboratory, your first step should be to update your chemical inventory system (CIS). How you manage your chemical inventory—the building blocks of research—has the potential to make or break your budget. The daily function of laboratories revolves around the chemical inventory. Chemicals are the raw materials for experiments, holding the key to research innovations.

Antiquated chemical inventory management systems have a tendency to create menial tasks for the whole organization, from spending time searching for chemical containers to reordering stock that can’t be found. After years of research, what may seem to be inconsequential losses of time and funds can add up to a serious amount of wasted resources. You may also be rightly concerned about staying in compliance if you aren’t sure where your regulated chemicals are at all times. This affects not only the qualitative environment of the lab but also your organization’s long-term operational costs.

Accounting for lab managers

In addition to their daily managerial responsibilities, lab managers tell us time and again that accounting is one of the most pertinent challenges. By planning ahead with a budget, lab managers devise the best plan of action to fit the needs and resources of the lab. Comprehensive accounting audits reveal your organization’s exact spending habits and precise needs, aiding in budgeting for the future. In particular, meticulous accounting helps uncover the discrepancies between your perceived and actual chemical inventory expenditures.

The hidden costs of chemical inventory management

Inefficient chemical inventory management could be draining your laboratory of valuable time and money. Let’s take a look at the life span of a single chemical in your lab from “cradle to grave” to help illustrate.

Your initial purchase of a chemical for your lab is its first direct cost. If you purchase it under an urgent deadline, additional fees will likely be added for expedited delivery and special handling. With a traditional system, your chemical will be documented upon arrival and added to the inventory list by a designated employee. Safety and compliance measures, such as safety data sheets, employee training, and special storage measures, require additional time and funds to address.

During the chemicals’ life span, containers are likely to be shared among multiple laboratory employees. While this is an efficient use of resources, in the event that a single chemical is needed simultaneously in two places or is misplaced, someone may order an additional supply of the chemical. Without planning ahead, it is all too easy to accumulate numerous stores of the same chemical, often in different locations with disparate expiration dates. Alternatively, many laboratories contain “emergency” stores of chemicals to safeguard against depletion. While this may seem an appropriate strategy, it is only a Band- Aid on a larger organization issue, and in the end, chemical stockpiles can end up costing more as unused bulk supplies expire. The more prudent approach is to monitor inventory levels and order “just in time” as needed; this eliminates the compliance and safety risks of having excess chemicals on-site and the cost of sending unused containers to chemical waste facilities.

Hoarding excess inventory adds a host of costs to the lab. First, many chemicals are governed under strict laws that regulate total volume, with substantial fines applied during safety inspections. A cluttered laboratory bench and storage space mean greater risk of dangerous chemical spills, workplace injuries, and liability. Second, lab storage space can be expensive, especially for chemicals that need special storage arrangements, such as refrigeration, which accrue additional electricity costs. Third, when chemicals expire, you pay to dispose of them properly, whether or not you have had a chance to use them. There’s no greater tragedy in inventory organization than discarding unopened chemical containers!

At every step of the way, a single container accumulates these hidden costs of time and funds. Yet another inconspicuous expenditure is opportunity cost. Time and money that are spent on inventory management could be spent on your more profitable lab projects.

Without a systematic way to manage your laboratory’s chemical inventory, it is easy to get sidetracked with seemingly more urgent tasks. However, it is well documented that a poorly managed inventory can snowball into more “headaches” and more cost than you and your employees can afford. No matter the size of your chemical inventory, it is critical to implement a thorough, accurate chemical inventory system.

How do you manage your chemical inventory data?

If you’re like many laboratories we’ve visited around the world, your chemical inventory may be recorded on a piece of paper that is tucked away in a binder or a cabinet, or on a digital spreadsheet, or on the lab manager’s desktop computer. Occasionally, this list will come out of storage for several common reasons. First, the purchase of new chemicals requires their addition to your inventory list. Second, in the unfortunate case of a spill, fire, or other accident, these records contain safety information that you or the relevant safety personnel need to access.

Besides these two events, however, the typical chemical inventory list usually sees little use. Instead, record keeping takes a back seat to more urgent research tasks. Chemical inventory management is anything but a back-seat matter, however. If your daily tasks revolve around the use of chemicals, then your chemical inventory list is relevant minute by minute. As your laboratory uses chemicals, the inventory is in fact changing. Quantities are shrinking, and chemicals are gradually approaching their expiration date. Reordering cannot and should not wait until your chemicals are depleted or expired; this adds additional headache, stress, and expedited shipping costs. What, then, is the best way to keep your inventory records current?

Chemical inventory systems for the modern laboratory

Paper records are no longer adequate for the majority of modern laboratories. While they may suffice for extremely smallscale facilities, laboratories with tens, hundreds, or thousands of chemicals require a different organizational system. As the scale and scope of your research expand, inventory management should evolve as well. The solution to the demands of the modern lab is a digital inventory management system with bar-code technology that can track chemicals from receipt to disposal. Almost immediately, it transforms your chemical inventory from an afterthought to a real-time research tool that saves time, resources, and other troubles.

The benefits of a digital inventory system

How exactly can a digital chemical inventory management system transform your research and save you money? By tracking your chemicals’ inventory, location, quantity, safety information, users, and regulatory compliance requirements, you have this data available at the touch of a button.

With a best-practices system in place, realtime data about your inventory becomes available to every relevant individual. You can look up exactly what you have, where it’s located, how much you use and how often, when to reorder, and how to use, store, and dispose of the chemical safely.

In daily use, a best-practices chemical inventory system can shave hours off inventory searches and dollars off redundant orders. In emergencies, a remotely accessible, real-time inventory list can serve as a critical guide for emergency responders to react appropriately to an accident. The cost of installing the software and training your staff is typically recovered within a surprisingly short period. For instance, a study of Accelrys’ CISPro inventory system calculated a potential $770,500 cost savings per year for a mid-sized research company with 50 employees and 10,000 chemicals. For your organization, this yearly savings could amount to $12,900 per laboratory employee and $12.50 per container of chemical inventory.

Personnel time and funding enable your valuable research, so efforts to improve efficiency vastly expand the quality and quantity of results that your laboratory can produce. When you use a chemical inventory system with bar-code technology, you and your staff are free to pursue new avenues of research instead of spending hours trying to track down and reorder chemical inventory. The difference is both quantitative, with an improved return on investment, and qualitative, with increased productivity and employee morale.

Transitioning to digital chemical inventory management

When you decide to implement chemical inventory software, be sure to choose a system that is right for your lab’s needs. It should be configurable, scalable, and intuitive enough that everyone in your lab, from assistants to the principal investigator, can learn to input and interpret data with minimal training. With a bar-code tracking system, a unique bar code adheres to every chemical container. When scanned, this bar code reveals the location, identity, quantity, and all safety information pertaining to the chemical. In addition, web-based chemical inventory systems provide access to all the inventory data you need at any time. The option to access your inventory information remotely, even when you’re visiting a facility in another city, means more convenient, flexible, and worryfree monitoring of safety and inventory information.

Being a lab manager today is a more complex job than ever, requiring expert juggling of a gamut of responsibilities and taking on some personal liability for team safety and compliance. As your laboratory’s research grows in scope and the size of your chemical inventory expands, make sure you can keep up by upgrading to a best-practices chemical inventory system.

Note: The full study referenced in this article is a part of Accelrys’ white paper titled “Quantifying the Financial Benefits of Chemical Inventory Management Using CISPro.” It can be accessed online at http://media.accelrys.com/literature/misc/White-Paper-How-to-Calculate-the-Financial-Benefits-of-a-Chemical-Inventory-Management-System.pdf.

Categories: Business Management

Published In

Growing Green

Published: April 7, 2014

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