MLS 316: SUPPLY CHAIN MANAGEMENT (1 UNIT)

This has to do with purchasing and inventory.

Purchasing and inventory management is a critical and essential component of the quality management system. Efficient
and cost-effective laboratory operations need the uninterrupted availability of reagents, supplies and services. Inability
to test, even for a short time, is very disruptive to clinical care, prevention activities and public health programmes.

Careful management of inventory helps to prevent waste, which can occur if reagents and supplies are stored
improperly, or if reagents become outdated before they can be used. Establishing a purchasing and inventory
management programme will ensure that: supplies and reagents are always available when needed; high-quality
reagents are obtained at an appropriate cost; reagents and supplies are not lost due to improper storage, or kept and
used beyond expiration.

Methods for obtaining reagents and supplies vary considerably between laboratories. Some laboratories may purchase
directly but, in many countries, a national procurement system is in place with a central stores area that distributes
directly to the laboratories.

The challenge of inventory management is balancing the availability of supplies and reagents in stock with their
expiration dates. The lifespan of reagents can vary from a few weeks to a number of years. It is important to continuously
monitor the expiration dates to make sure needed reagents are always on hand and have not expired. However, it is too
costly and wasteful to overstock.

Successful purchasing and inventory management requires that policies and procedures be established for managing all
critical materials and services. Some of the key components to address are: vendor/manufacturer qualifications;
purchase agreements; receiving, inspecting, testing, storing, and handling of materials—all purchased material should be
inspected and appropriately tested to ensure that specifications are met, and policies should be established for storing
and handling materials as they are delivered to the laboratory; tracking materials to individual patients—the
management system must allow for tracking materials to individual patients; that is, the laboratory should be able to
identify specific test materials used for performing tests on any given day, so that if there is a problem with a patient
result, the laboratory will know what reagents were used; assessing and maintaining inventory; controlling expiration
periods; dispatching supplies to satellite laboratories.

Importance of Efficient Supply Management in Medical Laboratories

Efficient supply management in medical laboratories is crucial for ensuring the smooth operation of laboratory
processes, maintaining quality standards, and delivering timely and accurate test results. Here are several key
reasons highlighting the importance of efficient supply management:
1. Maintaining Continuity of Operations: Adequate and timely supply of reagents, consumables, and
equipment ensures uninterrupted laboratory operations. Any shortage or delay in supplies can disrupt
testing processes, leading to delays in diagnosis and patient care.
2. Ensuring Quality and Accuracy: Properly managed supplies contribute to the reliability and accuracy of
laboratory test results. Quality control materials, calibrated instruments, and fresh reagents are essential
for maintaining the accuracy and precision of assays.
3. Compliance with Regulations and Standards: Efficient supply management helps laboratories comply
with regulatory requirements and accreditation standards, such as CLIA (Clinical Laboratory
Improvement Amendments) in the United States. Regulatory bodies expect laboratories to have adequate
inventory control measures in place to ensure the quality and integrity of testing processes.
 4. Enhancing Productivity, Efficiency, Minimizing Waste and Reducing Costs: Well-managed supplies
contribute to the overall productivity and efficiency of laboratory operations. Staff spend less time
searching for supplies, dealing with stockouts, or performing emergency orders, allowing them to focus
on performing tests and delivering results in a timely manner. Effective supply management practices
help minimize waste by optimizing inventory levels, reducing overstocking or stockouts, and preventing
expired or obsolete items. This leads to cost savings for the laboratory and the healthcare system as a
whole.
5. Facilitating Timely Patient Care and Maintaining Patient Safety: Timely access to supplies ensures that
laboratory tests can be performed promptly, enabling healthcare providers to make timely clinical
decisions and initiate appropriate treatment plans for patients. Properly managed supplies contribute to
patient safety by ensuring the accuracy and reliability of laboratory test results. Quality control
materials, calibration standards, and proper storage conditions are essential for minimizing the risk of
errors or inaccuracies that could compromise patient care.
6. Optimizing Inventory Control and Ordering Processes: Efficient supply management involves
implementing inventory control mechanisms, such as automated reordering systems, usage tracking, and
inventory audits. These measures help optimize inventory levels, prevent stockouts, and streamline
ordering processes.

Purchasing

Laboratories that purchase directly should look very carefully at vendors’ and manufacturers’ qualifications, examining
such things as specifications and methods of transport. Laboratories that receive reagents and supplies from a central
stores area managed by their government should interact with those managing the central stores area to accomplish
these same objectives. It may be useful to seek information from other laboratories when considering quality, reliability
of supply, and cost.

When setting up procedures for purchasing, there are a number of considerations.

 Understand any local or national government requirements that need to be accommodated in the contracts.
 Negotiate for the best price without undermining quality.
 Carefully review all contracts to make sure the laboratory’s requirements are being met. Contracts should clearly
address payment mechanisms and provisions to assure reliable availability and delivery of reagents and supplies.
Ask if there are penalties for ending a contract or inability to meet up.

Implementing an Inventory Management Programme

Inventory management refers to the process of overseeing and controlling the flow of goods and materials within a
business. It involves managing the stock of products a company holds to ensure that there's neither too much nor
too little inventory on hand. Effective inventory management aims to optimize the balance between meeting
customer demand and minimizing costs associated with storing excess inventory.

Key aspects of inventory management include:

Inventory tracking: Keeping track of the quantities and locations of all items in stock.

Forecasting demand: Predicting how much of each product will be needed in the future to avoid stockouts or
overstock situations.

Ordering and replenishment: Determining when to reorder items and how much to order to maintain optimal
inventory levels.
Stock control: Implementing measures to prevent theft, damage, or obsolescence of inventory.

Inventory valuation: Assigning a monetary value to the inventory on hand for financial reporting purposes.

Inventory optimization: Finding ways to improve efficiency in managing inventory, such as implementing lean
inventory practices or using software systems to automate processes.

The following are important steps for implementation.

Assign responsibility—without this, nothing may get done.

Analyze the needs of the laboratory.

Establish the minimum stock needed for an appropriate time period.

Develop needed forms and logs.

Establish a system for receiving, inspecting and storing supplies.

Maintain an inventory system in all storage areas, and for all reagents and supplies used in the laboratory.

Analyzing Needs

A laboratory needs a process for analyzing its needs for materials and for determining how many kits for a particular
test should be on hand. The laboratory should make a list of all the tests it performs and identify all the supplies and
reagents that are needed for each test. It is wise to use all available information to help estimate the usage of
supplies and reagents for the period of time between ordering new materials. The expiration, storage, environment
and length of time required to receive a delivery (will the order take a day, week or month to arrive) should be
carefully considered.

Methods of analyze needs

Quantification is a very important process that can help calculate how much is required of any particular item for a
given period of time. Quantification is performed when making annual plans for the laboratory.

1. Consumption-based quantification. This draws on the experience over time. This method is based on actual
consumption, so there are a number of factors to consider. For example, to determine the actual usage, it is
important to also estimate how much wastage has occurred and how many expired or spoiled reagents and
supplies have been discarded.
2. Morbidity-based quantification, the morbidity method is used for new programs or where valid consumption
data are not available. The laboratory takes into account the actual number of episodes, illnesses and health
problems that require laboratory testing. In other words, the laboratory needs to estimate an expected
frequency of the disease in question—how many cases will occur per unit of population (per 1000, per 10 000,
etc.)? Then, considering how many people the laboratory serves, it can estimate the total number of cases the
community might reasonably expect to observe.
Estimating Safety Stock

Safety stock is the amount of stock that is kept in reserve in case item in unavailable from supplier or for a sudden
increase in demand’

Safety stock = CA X LT, WHERE

CA = average monthly consumption

LT= Average lead time for projected supplier or worst case in months

When lead time is unrealistic, safety stock should increase as follows

DDE = DDP + (OD X OD%)

DDE = expected delivery date; DDP= promised delivery date; OD = average overdue period in days; OD% =
percentage of orders overdue
CATALOGING AND INDEXING OF LABORATORY SUPPLIES

Developing an appropriate record-keeping system is an important step for inventory management. Good tools for
managing the stock include: standardized forms, card systems and log books. For any system that is used, the
following information should be recorded: date reagent or set of supplies are received; lot numbers for all
supplies, reagents and kits; whether pass or fail acceptance criteria; date the lot number or box of supplies was
put into service or, if not usable, the date and method of disposition. The stock logbook or card system will provide
a way to keep track of all supplies and reagents that are on hand at any given time. In addition to information
mentioned above, it is a good idea to record: name and signature of the person receiving the materials; date of
receipt; expiration date; quantity of the material received; minimum stock that should be on hand; current stock
balance. Additional information to record could include: shelf number or name; destination (e.g. to –20 o C freezer
to media room). It is a good idea to keep the stock logbook in the storage area.
Types of Laboratory Supplies to be Cataloged and Indexed
Laboratory supplies encompass a wide range of items necessary for conducting various tests, experiments, and
research activities. When cataloging and indexing laboratory supplies, it's essential to include all items that
contribute to laboratory operations. When cataloging and indexing laboratory supplies, it's important to include
detailed information such as item name, description, manufacturer, part number, unit of measure, quantity on
hand, location, and reorder point. This comprehensive catalog helps ensure efficient inventory management,
accurate tracking of supplies, and timely replenishment of stock when needed
Here are some common types of laboratory supplies that should be cataloged and indexed:
1. Reagents:
 Chemical reagents
 Biological reagents (e.g., antibodies, enzymes, cell culture media)
 Molecular biology reagents (e.g., nucleic acid extraction kits, PCR reagents)
2. Consumables:
 Laboratory glassware (e.g., beakers, test tubes, pipettes, flasks)
 Plasticware (e.g., microplates, tubes, pipette tips)
 Filters, membranes, and filter papers
 Disposable gloves, lab coats, and protective gear
3. Equipment and Instruments:
 Analytical instruments (e.g., spectrophotometers, chromatography systems, mass spectrometers)
 Laboratory centrifuges
 Incubators, ovens, and autoclaves
 Microscopes and imaging systems
 Molecular biology equipment (e.g., thermal cyclers, gel electrophoresis systems)
4. Calibration Standards and Controls:
 Calibration standards for instruments (e.g., pH buffers, conductivity standards)
 Control materials for quality control (e.g., serum controls, proficiency testing samples)
5. Laboratory Supplies for Sample Collection and Processing:
 Collection tubes and containers (e.g., blood collection tubes, urine containers)
 Swabs, brushes, and collection kits
 Cryogenic storage vials and containers
6. Safety Supplies:
 Personal protective equipment (PPE) such as gloves, lab coats, safety glasses, and face shields
 Chemical spill kits and emergency eyewash stations
7. Media and Culture Supplies:
 Cell culture media and supplements
  Microbiological culture media and agar plates
 Antibiotics and antimicrobial agents
8. Miscellaneous Supplies:
 Laboratory furniture and fittings (e.g., benches, shelves, cabinets)
 Labels, markers, and documentation supplies
 Cleaning supplies and disinfectants
9. Specialized Supplies for Research and Development:
 Specialty reagents and kits for specific assays or experiments
 Custom-made or specialized equipment and consumables for research projects

Best practices for organizing and categorizing supplies

Organizing and categorizing supplies in a medical laboratory is essential for efficient inventory management,
easy retrieval of items, and maintaining a well-functioning workspace. A laboratory needs a process for
analyzing its needs for materials and for determining how many kits for a particular test should be on hand. The
laboratory should make a list of all the tests it performs and identify all the supplies and reagents that are needed
for each test. It is wise to use all available information to help estimate the usage of supplies and reagents for
the period of time between ordering new materials. The information necessary for analyzing needs includes: a
complete description of each item used; the package count or number of units in which the item is supplied (e.g.
a kit can include 12 tests or 100 tests, and pipette tips can be packaged as 100 per box or 1000 per box);
approximate usage per month (quantification, e.g. 6 boxes used per month); y the priority or importance level
the item has in doing the work of the laboratory (e.g. used every day or only once a month?); length of time
required to receive a delivery (will the order take a day, week or month to arrive?); storage space and conditions
(will a bulk order use too much storage space? Does the item require storage in a refrigerator?). Here are some
best practices for organizing and categorizing supplies effectively:
1. Establish a Logical Layout: Designate specific areas or zones within the laboratory for different
categories of supplies, such as reagents, consumables, equipment, and safety supplies. Arrange these
areas in a logical layout that facilitates easy access and navigation. Maintain an inventory system in all
storage areas, and for all reagents and supplies used in the laboratory.
2. Use Standardized Naming Conventions and Categorize Supplies by Function or Application: Develop
standardized naming conventions or codes for supplies to ensure consistency and clarity. Use clear,
descriptive names or codes that accurately reflect the nature and purpose of each item. Organize supplies
into logical categories or groups based on their function, application, or type of analysis. Create broad
categories (e.g., chemistry reagents, microbiology supplies) and subcategories within each main
category to further classify items. Group together items that are similar in nature or used for related
purposes. Assign a number (or name) to different areas of the shelves. Record in the logbook what
shelves are used for which reagents and supplies. Consider Frequency of Use: Prioritize storage space
for supplies based on their frequency of use. Keep frequently used items easily accessible and within
reach, while less frequently used items can be stored in less accessible areas. t is also useful to number
cold rooms, refrigerators and freezers for the same purpose.
 3. Implement (First-outdated, First-Out) Method: Adopt the method for managing inventory to ensure that
older stock is used first before newer stock. Rotate supplies regularly to prevent expiration and minimize
waste.
4. Regularly Audit and Reorganize: Conduct regular audits of inventory to assess stock levels, identify
expired or obsolete items, and reorganize storage areas as needed. Adjust storage arrangements based on
changes in inventory and workflow patterns.

Tools and Software for Effective Cataloging and Indexing

The challenge of inventory management is balancing the availability of supplies and reagents in stock with their
expiration dates. Several digital tools and software are available to facilitate effective cataloging and indexing
of laboratory supplies. These tools streamline inventory management processes, enhance organization, and
improve accessibility of supply information. When selecting a digital tool or software for cataloging and
indexing laboratory supplies, it's essential to consider factors such as the size and complexity of the laboratory,
budget constraints, user requirements, and compatibility with existing systems and workflows. Additionally,
training and support options should be evaluated to ensure successful implementation and utilization of the
chosen solution. Here are some examples:
Developing an appropriate record-keeping system is an important step for inventory management. Good tools
for managing the stock include:
Standardized forms
Card systems
Log books.
Software
For any system that is used, the following information should be recorded:
Date reagent or set of supplies are received;
Lot numbers for all supplies, reagents and kits;
Pass or fail acceptance criteria;
Date the lot number or box of supplies was put into service or, if not usable, the date and method of disposition
The stock logbook or card system will provide a way to keep track of all supplies and reagents that are on hand
at any given time. In addition to information mentioned above, it is a good idea to record:
 Name and signature of the person receiving the materials
 Date of receipt
 Expiration date
 Quantity of the material received
 Minimum stock that should be on hand y current stock balance.
1. Laboratory Information Management Systems (LIMS):
 LIMS software is specifically designed for managing laboratory operations, including inventory
management.
  LIMS allows users to create a centralized database of laboratory supplies, track inventory levels,
and automate ordering and reordering processes.
 It typically includes features such as barcode scanning, inventory tracking, usage tracking, and
reporting capabilities.
2. Inventory Management Software:
 There are various inventory management software solutions available that are adaptable for
laboratory use. E.g. Dendi LIS, LabVantage, spreadsheet etc
Spreadsheet Software:
 Programs like Microsoft Excel or Google Sheets can be used to create simple inventory
databases and track laboratory supplies.
 Users can customize spreadsheet templates to include relevant information such as item name,
description, quantity on hand, location, and reorder point.
 While not as sophisticated as dedicated inventory management software, spreadsheets can be a
cost-effective solution for smaller laboratories or those with less complex inventory needs.
Quality control and maintenance of the cataloging system
Quality control and maintenance of the cataloging system for laboratory supplies are essential to ensure the
accuracy, reliability, and integrity of inventory data. Successful purchasing and inventory management requires
that policies and procedures be established for managing all critical materials and services. Some of the key
components to address are: vendor/manufacturer qualifications; purchase agreements; receiving, inspecting,
testing, storing, and handling of materials—all purchased material should be inspected and appropriately tested
to ensure that specifications are met, and policies should be established for storing and handling materials as
they are delivered to the laboratory; tracking materials to individual patients—the management system must
allow for tracking materials to individual patients; that is, the laboratory should be able to identify specific test
materials used for performing tests on any given day, so that if there is a problem with a patient result, the
laboratory will know what reagents were used; assessing and maintaining inventory; controlling expiration
periods; dispatching supplies to satellite laboratories. Here's how to implement quality control measures and
maintain the cataloging system effectively:
1. Regular Data Verification:
 Conduct regular audits and data verification checks to ensure the accuracy and completeness of
inventory records.
 Compare physical inventory counts with cataloged data to identify discrepancies, missing items,
or incorrect entries.
 Schedule routine data verification procedures to coincide with inventory audits or on a periodic
basis.
2. Standard Operating Procedures (SOPs):
 Develop standardized procedures and protocols for cataloging and indexing laboratory supplies.
 Document detailed SOPs outlining the steps for adding, updating, and removing inventory items,
as well as guidelines for data entry and maintenance.
3. Data Validation and Accuracy Checks:
  Implement data validation rules and accuracy checks within the cataloging system to prevent
entry of incorrect or incomplete information.
 Use validation mechanisms such as dropdown menus, predefined lists, and required fields to
enforce data consistency and accuracy.
4. User Training and Education:
 Provide comprehensive training and ongoing education to staff responsible for cataloging and
maintaining inventory data.
 Ensure that staff understand cataloging procedures, data entry guidelines, and the importance of
maintaining data integrity.
5. Version Control and Change Management:
 Establish version control procedures to track changes made to inventory records over time.
 Document changes, updates, and revisions to inventory data, including timestamps, user IDs, and
reasons for modifications.
 Implement change management protocols to review and approve proposed changes to inventory
records before they are finalized.
6. Backup and Data Recovery:
 Implement regular backup procedures to protect inventory data from loss or corruption.
 Store backup copies of inventory databases in secure locations, both onsite and offsite, to ensure
data integrity and availability in the event of system failures or disasters.
 Test data recovery processes periodically to verify the integrity and reliability of backup systems.
7. Data Security and Access Control:
 Implement robust data security measures to protect sensitive inventory information from
unauthorized access, tampering, or theft.
 Restrict access to the cataloging system to authorized personnel only and enforce user
authentication mechanisms such as passwords, encryption, and multi-factor authentication.
8. Performance Monitoring and Optimization:
 Monitor system performance metrics such as database response times, query execution times,
and system resource utilization.
 Identify and address performance bottlenecks, inefficiencies, or issues that may impact the
usability or reliability of the cataloging system.
 Optimize database indexing, query optimization, and system configuration settings to improve
performance and responsiveness.
9. Feedback and Continuous Improvement:
 Solicit feedback from users of the cataloging system to identify areas for improvement or
enhancement.
  Regularly review and assess the effectiveness of cataloging procedures, data validation rules, and
system functionality.
 Implement continuous improvement initiatives based on feedback, user experience, and evolving
business requirements.
10. Compliance with Regulatory Requirements:
 Ensure that the cataloging system complies with relevant regulatory requirements, industry
standards, and best practices for data management and security.
 Stay informed about changes to regulatory standards and update the cataloging system
accordingly to maintain compliance.
By implementing these quality control measures and maintenance practices, laboratories can ensure the
accuracy, reliability, and security of their cataloging system for laboratory supplies, ultimately supporting
efficient inventory management and effective operations
savings, time efficiency, research continuity, and overall performance.