Recalibrating lab supply chain for improved sustainability

The supply chain management of laboratory reagents and supplies in hospital is a challenging task. The crux is to strike the right balance between maintaining optimal inventory levels and avoiding stock outages.

Hospitals are continuously under tremendous pressure to drive down costs. The recent Covid has had huge negative impact on supply chains and exposed us to many unseen vulnerabilities, and it has highlighted the lack of system and the broken JIT supply chain model, resulting in the inability to obtain critical supplies, particularly lab reagents and supplies, during health crisis. It exposed the need for a greater supply chain resilience. To overcome and succeed amid disruptions, we must innovate long-term solutions that provide business continuity while keeping cost under control.

While selecting laboratory equipment, the stakeholders at all levels need to be consulted for better understanding of the requirement. Along with the price of the equipment, cost of the reagents, consumables, and calibrators, parameters like automation, interconnectivity, mobility, connectivity, remote assistance, technological updates, service support after sales, training, cost and availability of spares and accessories, feedback from the existing users on technical and support areas, software and hardware packages, life span of the equipment, etc., has to be considered.

The comparative study and analysis of the cost of buying versus the cost of renting/leasing an identical item must be carried out. If the terms of the lease include other services, such as operation and maintenance of the equipment, then the cost of availing these services should be added to the price for the purpose of the analysis. The residual value of the item at the end of the period needs to be considered.

Among the different strategies and tools that can assist in inventory management, lean six sigma strategies play a pivotal role in managing inventories and controlling expenses efficiently through eliminating non-value-added activities and help in the reduction of errors and minimizing impact variation.

The following strategies help us to achieve sustainability and build greater resilience:

• Inventory buffers. It is the most effective way to enhance resilience. The challenge is that buffers are expensive, and we can create contract manufacturers strategically for their surge needs;
• Alternate vendors. It is an effective method to manage crisis situations;
• Substitute products. The products and supplies are substituted with alternate brands and products;
• Multisourcing. It is an obvious way to mitigate risk;
• Nearshoring. This may be a little expensive, but it provides more control over inventory and moving the product closer to the end consumer;
• Effective supplier relationship management. It is helpful in maximizing value and minimizing risks; and
• Integration of new disruptive technologies like AI, data analytics, robotic process automation, and IOT facilitate smooth operations, transparency, and the desired outcomes.

No one can predict and can be prepared enough for every unknown crisis, but an agile and resilient system can help us to bounce back quickly. Effective supplier relationship management, stakeholders’ engagement, strong connections with other labs and hospitals, business continuity plan with alternate options, inventory buffers and multi sourcing and, most importantly, innovative technologies can help us in challenging situations and to overcome the demand fluctuations and disruptions.