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Lab Managers' Best Purchasing Practices

Direct technology spending and the time and effort expended to source, assess and buy equipment, raw materials and consumables make the acquisition of laboratory equipment a dominant expense category on the balance sheets of laboratories. Lab Manager shares the results of its annual lab investment study here.

by Bernard B. Tulsi
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Direct technology spending and the time and effort expended by a variety of laboratory personnel to source, assess and buy equipment, raw materials and consumables make the acquisition and maintenance of tools and lab wherewithal a dominant expense category on the balance sheets of laboratories. In fact, in its annual laboratory investment study, Lab Manager found that 37%—more than one of every three dollars—of laboratory expenditures was linked to the acquisition of instrumentation, systems and supplies.

Still, no substantive guide delineating the best practices for acquiring laboratory technology and materials currently exists. In a number of cases, lab managers and their staff evolve ad hoc and idiosyncratic evaluation and acquisition approaches, or they rely on or are expected to comply with often arbitrary organizationwide guidelines designed to satisfy multiple departmental requirements.

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Focused on its role as the business management publication for professional decision makers, Lab Manager recognized the need for a guide that shares the best approaches on choosing vendors, selecting equipment and materials, negotiating with vendors and formulating return-on-investment parameters for technology investments, among other key issues.

This seemed all the more urgent in light of the financial pressures emanating from the global economic downturn. The wise use of available funds and the realization of maximum returns seem almost imperative for survival in the current economic environment.

It became clear that the time to address this important unmet need was at hand. As a result, Lab Manager initiated original research aimed at identifying some of the best practices in laboratory equipment acquisition to share with its readers. It was felt that such findings likely would translate into greater confidence and competence among lab personnel charged with making acquisitions for their operations.

In mid-2009, Lab Manager initiated the first of what is expected to become an annual broad-ranging survey of lab staff in leadership roles. In the survey, 767 staffers drawn from a large number of laboratories in the United States and Canada provided responses to a range of questions about their acquisition practices.

Most (77%) of the respondents worked in facilities where the total workforce was 25 or fewer people. Only 7% operated in labs with 100 or more workers, 8% worked in labs with 51-100 workers and almost a tenth (9.6%) were attached to labs with 26-50 workers.

More than half (52.2%) of the survey participants were attached to organizations that employed more than 251 workers. About a quarter (24.9%) belonged to organizations that employed less than 50 workers, 8.4% worked for organizations with 51-100 workers and 14.5% were with organizations employing 101-250 workers.

Less than half (42.5%) of the participants identified themselves as the leaders in their labs/organizations, while just less than a third (30%) described themselves as one of a handful of leaders. About 18% indicated that they were part of a larger group that provided leadership and less than 10% reported that they were not involved in any leadership role.

The labs spanned a broad cross-section of industry and academia, with almost half of the participants, when combined, attached to either industry (25%) or university/ college (22%) labs. Most of the other participants were drawn from government labs; clinical research, hospital and medical settings; and manufacturing labs, among others, as indicated in Table 1.

Almost a quarter (22.4%) of respondents were involved in research and development. The proportion of participants in quality control, assurance and validation was close to 20%, 16% listed their job functions as technical services and a little more than 10% listed their roles as corporate management. These and other categories are shown in Table 2.

The participants, all whom are Lab Manager readers, have a broad range of technical and managerial responsibilities. More than half (54.4%) of the respondents held the title of supervisor, manager or director. Researchers, staff scientists and chemists made up the second largest segment (14.4%) of survey participants. The proportion of participants in all other title or function categories was under 10%, as indicated in Figure 1.

The participants work in a variety of disciplines, with the largest proportion (more than 10%) in the microbiology, pharmaceuticals, clinical/medical and environmental areas. The distribution of these and other disciplines among the participants is shown in Figure 2.

Turning to the issue of changes that likely will occur in their labs within the next two years— those changes that will require the purchase of new laboratory equipment and related technologies—more than a quarter (25.5%) of the participants indicated that they will be involved in updating current technology needs. While the survey makes no scientific claim about completeness or being all-embracing, the responses of the participants provide a useful microcosm of likely changes and activities in the laboratory sector in coming years. Activities planned at varying scales for the next two years include initiating new research projects, expanding existing and building new laboratories, and hiring more staff, as shown in Figure 3.

The survey addressed the roles of the lab leaders who participated in the survey and focused on how they were involved in identifying new technology needs and in evaluating vendors. More than 10% of the participants reported involvement in each of the following areas: assessing resources to determine the needs of their labs, directly gathering information from vendors and making initial contact with vendors. The exact proportions of these and other responses from among the participants are provided in Table 3.

In an attempt to attribute key roles to specific lab leaders, the participants were asked to identify who in their labs (for example, lab manager, engineer or IT manager) is engaged in four major areas of activities: exploring solutions—writing and implementing the plans; negotiating with vendors; making final vendor selections; and identifying categories of personnel who are not involved in the process. Lab managers, according to 43% of the participants, are involved in making the final vendor selections. More than a third (36.7%) of the participants identified a role for lab managers in solution exploration and in writing and implementing the plans, while more than half (55.5%) see this as the role for researchers—scientists and chemists. On the other hand, 69% of participants indicated that in their settings, engineers had no role in this process, while 67% did not recognize these as roles for IT managers, 45% did not see them as roles for financial management and 50% identified no role for corporate management in these areas (Table 4).

On the question of how the relationship between lab leaders and equipment and technology vendors has changed over the past few years, the survey showed that more than half of all participants hold the view—11% strongly agree and 48% agree—that there is less focus currently on personal relationships, in favor of professional, business-like relationships. Labs now require vendors to create more custom solutions for their needs, according to about 50% of the participants, while 54% reported that vendors are being held more accountable for performance and are expected to stay involved after the sale. In addition, the data showed that while about 42% of the participants saw a trend toward lesser-known brands, 58% reported reliance on the industry’s well-known brands for laboratory products and equipment.

One innovation that has evolved over the years is the purchasing consortium, in which labs seek to integrate themselves in hopes of increasing their negotiating clout with equipment suppliers. The survey showed that 63% of the participants reported that their labs were not affiliated with any such consortia, which are essentially aimed at procuring better pricing and support from vendors. Of the participants (about 37%) whose labs used such consortia, 36% reported that they have been effective at obtaining better pricing, 44% reported that they were only occasionally able to obtain better pricing and 16% reported that the consortia approach did not help them to get better pricing.