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Making Good Decisions about Laboratory Services

Making Good Decisions about Laboratory Services

Factors to consider when deciding which tasks to do yourself and which to outsource

Scott D. Hanton, PhD

Labs need a great many things done for the science to continue, independent of the kind of science practiced by the organization. Most labs don’t have the expertise or people power to complete these tasks all independently—they make a series of decisions about what activities to complete themselves and what to outsource. While every lab has a unique set of conditions and boundaries defining their organization, most lab managers and leaders follow similar patterns when prioritizing and making decisions about what services to buy and from whom to buy them.

While there is a huge list of potential services available to labs, most are actively considering a rather short list. Some of the most popular services include:

  • Instrument service contracts
  • Calibration
  • Accreditation
  • Lab monitoring
  • Training

Services like snow removal, pest eradication, security, and lawn and grounds maintenance are largely delivered by the landlord or facilities staff, and won’t be considered here.

Underlying questions

As lab managers consider what services to purchase from external vendors, many share common aspects to these decisions. Some factors in these decisions include:

  • Does the lab have people with the needed expertise?
  • Does the lab have employee time available to deliver the service internally?
  • What are the priorities for existing staff?
  • Is there an opportunity to hire new staff to fill either the expertise or time dimension?
  • What has the lab historically outsourced to external vendors?
  • What can the lab afford?
  • What are the relative priorities of the different potential external services?
  • What is the trend on annual budgets?
  • How will the lab address contingencies around potential services?
  • What risks will the lab be willing to take?

Experienced lab managers are thinking through these different underlying questions—the answers will provide the framework in which external service options will be considered, and in which the key decisions will be made.

We all laugh (or grimace) about the statement, “Do more with less.” Unfortunately, most lab managers face that dilemma every day. We see consistent trends of flat or lower spending in budgets with expectations of additional output from the lab. A key factor in addressing flat or decreasing budgets is making good decisions about services and managing risks. To maintain staffing levels, many labs have addressed the issue of “Do more with less” by reducing spending on external services. This has led to a risk management approach to the decisions regarding these services.

One approach to risk is to differentiate between the probability of an event and the severity of an event. This is common practice when addressing safety concerns. We can think of the potential service as the solution to a future problem. To help address the priority, we can assign each of the potential future problems a probability score and a severity score from 1 (low) to 5 (high). The risk is estimated by multiplying the risk and severity scores. Those scores then range from 1 to 25. Here is an example of this approach. What if we don’t renew our environmental monitoring service? Last year, the freezers and refrigerators had no failures. For once, everything worked as needed. We won’t be that fortunate this year. The probability of an asset failure is ~3. However, if a freezer or a refrigerator fails, we could lose samples contributing to a 10-year study and waste a number of years of research. The severity is a 5. The risk is a 15.

Specific services

Independent of the specific service required, vendor selection contains a few common characteristics. Lab managers will want to find and retain vendors that fulfill all of these four criteria: provide the level of service required, complete the work accurately and efficiently, create trust, and provide the service at a price that works for your lab. Selecting vendors for the overall value they provide, rather than simply by cost, will lead to improved service relationships for your lab.

Instrument service contracts

Many labs have complicated relationships with instrument service contracts. Of course, science cannot proceed without functioning instruments. However, full-service contracts can be very expensive. Most labs cannot afford to have every instrument covered by service contracts. Begin with which instruments are mission critical and which have some flexibility in their repair. For those that are mission critical, finding the right partner to ensure instrument uptime is a good decision. For those having some flexibility, it becomes a matrix of contract cost, expertise to do it yourself (DIY), and time available to DIY. It is important to realize that the DIY approach is not free. DIY requires internal resources and fixed costs to complete the required repairs and maintenance. Another factor impacting service contract decisions is the availability of redundant instruments. The more the lab can shift work around similar instruments, the more it can find flexibility in repair options.

Once the decision is made to cover a set of instruments under contract, it is important to find the right partner. There are generally three types of service contract partners: OEM vendors, independent vendors, and total coverage vendors. The OEM vendors built the equipment and have detailed knowledge and direct access to parts. They are generally easier to engage and more expensive. The independent vendors focus on repair and maintenance without the build and sell portions of the business. These vendors are often focused on related types of instruments and can be more difficult to find and are less expensive than OEMs. The total coverage vendors are more like an insurance policy. They use greater buying power to bring lower costs, but can have disadvantages in timing of repairs and access to certain parts.

Calibration and metrology

Calibration of lab equipment is a common service labs purchase. This includes calibration of balances, pipettes, relief valves, thermometers, and the like. While most labs have the expertise to complete these calibrations internally, it is tedious, time consuming work, and the lab’s customers and auditors like to see traceable calibration records. Calibration of instruments is also available as a service and is much more varied. Some instruments like mass spectrometers and spectroscopy instruments require the high levels of expertise most often found in internal scientists. Other instruments like chromatographs require more common forms of calibration and can often be serviced well by external vendors.

The key to calibration services is to completely understand the timing and frequency of the calibrations as required by the lab’s quality management system (QMS). That will guide the lab to those calibrations best completed internally and those best completed by a service partner.

Accreditation

Many labs prefer to carry an external accreditation to demonstrate to customers the rigor of their QMS. Some industries, like pharma, require a QMS that is audited by the FDA. Other industries, like contract testing, often have external vendors to demonstrate compliance with ISO accreditation. There are relatively few external vendors available for accreditation. In some places, like the UK, there may be only one. If there is a choice, it is important to research the specialties of the different vendors and explore how their existing customers feel about the services they receive.

Lab monitoring

Lab and environmental monitoring come in many different variations. Many labs follow a DIY approach with manual monitoring or the use of relatively simple data logging. These can be effective for labs that have lower risk profiles for an asset trending out of compliance, or a lab that doesn’t store and do work on highly valuable samples. For labs with greater compliance needs, there are really three different choices: building management systems (BMS), environmental monitoring, and full-service monitoring. BMS is really designed for building-related controls and is best suited for landlords and facilities organizations. These systems can be rigid, expensive, and require significant installations. They can also control different functions of the building and greatly reduce building-related costs over time. Environmental monitoring can measure more lab-related sensors, but can’t control different functions, which is often what is expected in GxP applications. Full-service monitoring systems can dynamically monitor many kinds of sensors, provide full data and analytics, and can generate a range of alarm and communication options. These systems are highly effective, but that full service requires ongoing monthly payments.

Training

All labs complete a significant amount of internal training every year. Internal training can be as basic as teaching a new hire how to run an instrument, or as complex as knowledge sharing from senior staff. However, there are also needs for external training. Budgeting the appropriate amount of training is getting more difficult in this “Do more with less” world. Training provides a benefit in the future, which is hard to justify in a “just in time” world. Clearly understanding what training the lab staff need that cannot be provided internally is the key to purchasing the right level of service. Since training is predominantly a future driven activity, buying training services around succession planning is a common path for labs. There are many different training service providers, including professional training companies, consultants, and academic institutions. Using a small training budget to ensure successful transitions in the organization is one path to success.

Summary

Labs face critical decisions about which activities to DIY and which to outsource to service vendors. Clearly understanding both the needs of the lab and the ability of lab staff to deliver DIY options enables the lab manager to parse which activities will be completed internally and which will be purchased services. In each of the major areas of available services, there are important choices and decisions to be made. The best outcomes tend to occur when those decisions correlate to total value, rather than simply price.