Boost Medical Lab Vitality with Better Control of Your InventoryBoost Medical Lab Vitality with Better Control of Your InventoryBoost Medical Lab Vitality with Better Control of Your Inventory

Having a profitable medical laboratory depends on properly managing all aspects of inventory control.

Understanding what your inventory costs are, allocating inventory costs to specific cost centers, replenishing inventory efficiently, handling reagents properly, managing vendor contracts and calculating test costs are just some of the unique challenges testing laboratories face.

So, who cares about controlling costs in a medical lab? Everybody should!

For the stockholder or owners of the company, unnecessary inventory costs are eating away at profits. But the skyrocketing costs of healthcare affects everyone – consumers, other healthcare organizations, and every business that provides healthcare insurance to its employees. So, let’s look at some of the ways to control inventory costs.

1. Make Sure You Don’t Have Excessive Inventory

Start with a software solution that tracks inventory in real-time – a must for controlling costs. Beyond that, however, we find many laboratories have each test area maintain their own bench inventory.

This results in overstocking of items across the overall company.

You can greatly reduce your overall on-hand inventory by having centralized purchasing and storage of common items (disposable supplies and reagents) so you are managing quantities at a company level rather than at an individual bench level.

2. Ensure “Just-in-Time” Inventory for Each Bench

Assuming you have a centralized storeroom for common items, one of the best ways I have seen this done is by a “peel-the-label” system. This is essentially a kanban system in which replenishment is done based upon real-time demand.

When the item is received in the warehouse, a peelable label with a barcode identifying that item is applied. When the item is consumed the lab technician peels the label and sticks it to a board. This is later scanned to reduce that lab’s inventory and the system creates a replenishment order for that lab based upon a predefined reorder level.

3. Know What Your Tests Are Costing You

Most laboratories cannot calculate test costs accurately because they don’t have proper business intelligence around their inventory costs.

Your system should track how much each item costs and the amount that each item is used for any particular test. Then associate which items are used for which tests, apply overhead costs and you have the basis for your cost analysis.

4. Handle Reagents & Other Sensitive Materials Efficiently

Many labs have their technicians put away items because one needs to know, for example, should it be refrigerated, frozen or stored at ambient temperatures.

You can minimize involving technicians (who should instead be creating revenue by running tests) if your ERP solution provides “handling” information to the warehouse staff during the receiving process so they can do the majority of that work.

Standardized Best Practices Needed

Controlling inventory costs in a laboratory testing facility involves implementing standard inventory-control best practices and having a real-time inventory-control solution. But you also need to be sure your ERP solution has the flexibility to address your unique needs, and have management prioritize controlling and understanding inventory costs.

Next, sit back and watch your profits rise! Now, who cares?

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