December 6, 2023 • 40 mins
- Uncover the potential of inventory management for business success.
- Dive into laboratory inventory and budget management intricacies.
- Learn the art of categorizing items in databases and tracking consumable usage.
- Explore unique inventory challenges in manufacturing, including traceability and equipment reliability.
- Discover smarter solutions reshaping inventory management, from technology integration to proactive planning.
- Transform your operations with effective inventory management skills, tools, and communication.
- Prepare to revolutionize your approach to inventory management for guaranteed results.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Lawrence Wong (00:00):
The descriptions of these items are tubing set
and they usually list thedimensions of whatever it is.
That's not helpful.
You need to tell me what unitoperation this is used for and
where I'm going to install it,because otherwise nobody can
tell.
This is like three-quarter inchby two feet and it's like
that's not helpful.
Oscar Gonzalez (00:20):
Welcome to Lean by Design Podcast.
I'm your host, Oscar Gonzalez,alongside my co-host Lawrence
Wong.
We are former MBA classmatesturned business partners, with
over 25 years of combinedexperience in life sciences,
from R&D through manufacturing.
Our experiences have shed lightinto the complex, ever-changing
challenges experienced by thisindustry and many others.
(00:42):
We took a risk quit oursix-figure paying jobs in Boston
Biotech and Pharma to startSigma Lab Consulting.
Journey with us as we explorethe relationship between people
and workflow design, the goal Tolearn, inspire and deliver
practical tips to navigate theseever-changing challenges.
Stick with us and learn to worksmarter, not harder, and be
(01:05):
lean by design.
In today's fast-paced world,effective inventory management
stands as the cornerstone ofoperational efficiency,
especially pivotal in the lifesciences and manufacturing
sectors.
Consider a lab technician onthe cusp of a pivotal experiment
(01:26):
, only to find that a criticalsupply is run dry.
Visualize the exasperation ofan inventory manager navigating
a lab-rent of websites just totrace a past order.
Such real-world scenariosaccentuate the necessity of
efficient inventory processes.
In today's episode, we'llunravel the challenges and
(01:47):
strategies around distinguishingcritical items from one-offs,
the financial implications ofinventory decisions, the
operational hurdles faced byteams, the psychological stress
on inventory personnel and theundeniable importance of
seamless communication andalignment Plus.
Get a glimpse of the future aswe explore modern, smarter
(02:08):
solutions that are redefiningthe inventory landscape.
Join us as we unpack thesetopics and delve into the world
of inventory management,offering insights and strategies
that are bound to revolutionizeyour approach and help you to
become lean by design.
And we are back for anotherepisode.
(02:32):
I'm your host, oscar Gonzalez.
You know, I don't even thinkthat I introduced myself in the
last episode, so hopefullypeople know why I'm doing it now
.
Lawrence Wong (02:40):
Yeah, we can insert the.
Oscar Gonzalez (02:42):
Exactly the power of editing.
The power of editing, yeah.
So I'm here with my friend,business partner, lawrence, and
I see this again post that we'vedone through LinkedIn and we're
hoping to elaborate on a lot ofthese topics that we've been
(03:02):
pushing out through social mediaand making sure that we're
delivering the content thatmakes sense and is relevant to
our listeners.
And there's a big challenge, Ithink that comes in
manufacturing and facilityoperations and that's the
inventory.
So, lawrence, I'm looking backat what you had put together and
(03:29):
what you had put out and we'retalking about performance of
inventory operations.
What does that mean in yourterms and in your space,
inventory operations?
Can you elaborate on that?
Lawrence Wong (03:46):
Yeah.
So there's kind of two, I wouldsay, areas One is the
consumables and items that youmight use for supporting
manufacturing activities and theother part of it is your spare
parts that you have forservicing any of the equipment
and instruments that you have inyour facility.
So the post that I had put outis supposed to be relevant to
(04:09):
both areas and, depending on thenuances of your operation,
there might be certain systemsthat you use, maybe like an SAP,
versus a maintenance managementsystem where the data resides
for where you're storing themaster data around your
inventory, and so, depending onthe systems, you might have
(04:32):
unique challenges to both.
But I think, if we're justspeaking about generalities here
, there's a couple of, I wouldsay, problems that a lot of
these companies have whenthey're managing inventory.
In either situation One stockand order challenges you have
concerns with your database andjust the management of how the
(04:54):
items are stored in the facility, and then the other one is just
job management and qualitycontrol.
So with the stock and orderchallenges, you have either
overstocking, understocking andthis long procurement process.
So overstocking means you don'thave enough money and space,
but you keep ordering things andthat's really detrimental to
(05:18):
your overall bottom line.
I've seen that, yeah, and theother end of it is it's like
skyscrapers of boxes.
Yes, you have items that nobodyknows exists, and so you there,
order more things that you don'tneed, and then they end up just
collecting dust or they expirein some sense.
The other end of it isunderstocking for activities
(05:40):
that you have planned, and nowyou cannot do those things
because you did not order aheadof time and stock appropriately,
and both of those issues aresomewhat related to the
procurement process too.
So if you do need to restocksome item that you already have
in-house or you're trying toorder something new, the
(06:02):
procurement process usuallyinvolves somebody filling out a
form and then somebody has toapprove it.
If it's over a certain dollaramount, it goes to upper
management and they'll have totake a look at it and then
approve it.
So oftentimes the internalprocess is very convoluted and
complicated and certainapprovers are not involved, and
(06:24):
so the quantities that you endup ordering aren't vetted
through.
And then the other end of it isthe longer that you take to
actually place the order.
That lead time that you got onthat initial quote just keeps
getting larger, and sometimes itgets smaller.
But in past years, because ofCOVID and what we call supply
chain issues, that lead timeusually extends because the
(06:46):
companies are fulfilling ordersfor other customers Right.
Oscar Gonzalez (06:51):
Right, so we're, you know.
It's funny because this remindsme a little bit of somewhere
that I used to work, where I wasworking in the lab.
This was an academicinstitution years ago where we
just continued to purchase andwe are very frugal about the
(07:11):
money spent.
Now what happens in academicresearch is sort of like if
you're not spending the moneythat you said that you needed to
run your excuse me to run yourexperiments for that grant in
the research space, when youhave grants that are federally
funded or funded throughorganizations, usually you have
to provide some level of anupdate financially and
(07:35):
scientifically.
And I remember one incidentwhere we had four weeks left in
the fiscal year and I received amandate or, I guess, a task
from my boss to say, hey, I needyou to spend $100,000 and make
sure it arrives in the next fourweeks, but it had to be on
(08:01):
consumables, are you serious?
So we ended up with stackedboxes that almost went to the
ceiling of filters, culture,media, which is light, sensitive
, just a number of things.
And it was again a lack ofknowing the inventory, knowing
(08:25):
our budget, knowing where weneeded to go.
Now you usually don't see thatkind of issue in, I would
imagine in manufacturingfacilities, of lacking, having
to spend a certain amount ofmoney by a certain time.
But I've seen those towers ofsupplies and I also see folks
(08:46):
that go into that workspace andsay I don't know, that was here
before I got here.
Like what do you say to?
Kind of that, because I knowthese things don't just start by
themselves.
And sometimes you join in anorganization and you look at
their inventory and you go whatis all this stuff?
And everyone, scientistsincluded, shrug their shoulders.
Lawrence Wong (09:08):
Yeah so this kind of goes into that second topic
or focus here, which is thedatabase and the storage
concerns.
So we all do not work in placesthe size of Costco, so it
doesn't make sense for people toorder copious amounts of
materials to just store them ina place that you'll never use.
So I think one of the thingsthat a lot of people don't do is
(09:31):
having physical counts ofwhatever you have on hand, so
that you prevent other peoplefrom ordering extra things,
because people order thingsbecause they don't know that you
have them in-house, right?
People don't show up to workand order things just because
they want to.
It's usually because they needit for something and it comes
(09:51):
from a good place.
But to prevent that, you needto have these routine checks of
what you have in-house, and theanalogy I would use is you don't
go to the grocery store withoutunderstanding what is in your
refrigerator.
So you need to have anunderstanding of what you have
in-house and how those thingssupport your upcoming activities
.
I have, by the way.
Oscar Gonzalez (10:13):
I have done that and it's a disaster.
Lawrence Wong (10:15):
Right, you binge buy and you buy a bunch of
random stuff that you don'tactually need.
So that's one thing, right,doing the physical counts, and
the other thing I would say isthe data that you are managing
within your database also has tobe searchable.
So I've seen databases whereyou might do the physical
inspections and you might havean accurate count, but nobody
(10:37):
can find the thing that theyneed because the descriptions
are all off.
There's not enough nuance towhat exactly the item is.
Most databases don't have apicture of the actual item, so
you think it's one thing, butthen you show up and it's
another thing, and then they go.
Well, I guess we don't have it.
And then now you have to ordersomething else, and then you
have these mismatches ofdescription.
Oscar Gonzalez (10:59):
You're not gonna return.
You're not gonna return thoseother things.
Lawrence Wong (11:02):
You're not gonna return those other things
because, like you said, somebodysays that was here before I got
here, and so they're not gonnago through the effort of
removing those things becauseit's taking up space and nobody
actually uses them.
So there's gotta be a lot ofeffort around when you set up
your stock room to have a formatfor how you're gonna name
(11:26):
things so that the people thatsearch for them know what it is.
And then it's really great tojust have a spot where you can
actually have the labels, anysort of information about the
SKU, or maybe the website, justsomething where somebody can
click on and go okay, that'sexactly what I want.
In most cases, it's the personwho's inputting the data
deciding what they think isappropriate, but 99% of the time
(11:51):
the person who's putting in thedata is not the person using
the item, and so it's veryuseless for the user to look at
the description and go what isthis?
And so that creates thisdefinitely avoidable stress that
you can have and creates thatriff between your inventory team
and either your scientists,your technicians or your
(12:11):
mechanics.
Oscar Gonzalez (12:13):
There's a lot of challenges in inventory, and I
think not only just in inventory, but in databases in general,
and you're really you'retouching on that, which is sort
of nomenclature.
A lot of what I do from workingwith Project and Project
Support is I'm gonna createconsistent nomenclature across
everything.
If you adopt it, great.
If you don't change everythingtogether at the same time,
(12:36):
because what you're seeing isthat you'll have inventory and
the search terms may havemisspelling.
That's a common thing, thatthere's a letter left off and so
it doesn't show up on yoursearch terms and you don't think
it's there.
And it's actually there.
Somebody just spelled itincorrectly or they left a vowel
or something like that.
Other places they will.
(12:57):
What part of the descriptionare they gonna put the SKU
number?
Do you look at the manufacturerSKU or do you look at the SKU
from where you're ordering?
And I think that sometimesyou'll find that there are two
different things and in somecases where we don't wanna
purchase this from this place,we wanna purchase it from
(13:19):
somewhere else, thatmanufacturing SKU is gonna be
critical to making sure thatyou're aligning one-to-one On a
much smaller scale.
I have felt a lot of what you'redescribing in laboratory
management.
So, being a lab manager, when Istarted off my career, I
(13:41):
started to notice that therewere logs of inventory products,
of products that we have,whether they were for cell
culture or for bench topexperiments and the like, but
there were so many versions ofthe same thing.
We just continued to buy a casefor this, three cases for that,
(14:04):
two cases for that, and it mayjust be for initial experimental
stuff, like we wanna see ifthis works.
And so what happens?
Oh, that didn't work, let's goto something else.
And so now you have a case hereof plates that are treated with
whatever, now just taking upspace in your inventory, and
it's valuable.
Sometimes you have these thingsand I'm imagining the cost of
(14:28):
inventory items formanufacturing and facilities is
gonna be much more expensive,especially there's heavy
equipment there.
But you're talking, hey, eachof those cases, yeah, that's 500
bucks, so there's 25 in here.
Awesome, that's a couple ofthousand dollars.
It now is just sitting, justsitting there.
(14:48):
And what's one of the mainissues with trying to develop
and trying to do research?
Oh, we don't have the money.
We don't have the money you do.
It's sitting over there in thatcloset with all those things
that you guys don't even touch.
It's crazy.
Lawrence Wong (15:04):
Yeah, I think you know two points here.
One is is the descriptions thatyou mentioned.
So as a rule of thumb, you knowthere there is the Catalog
number and then there's usuallysome vendor part number or
whatever.
Yeah, even if you don't use theeither one to do your primary
search, you should extract theinformation from the label and
(15:25):
put it somewhere so thatsomebody else can search for it.
I think the other thing is isto have the description of
whatever the vendor calls it,but have a description for what
your own people call it, becausethat's usually Something that
they know is much more helpful.
So, as an example, a lot ofsingle-use manufacturing
facilities have a lot of tubingsets, and so the descriptions of
(15:47):
these items are tubing set andthey usually list the dimensions
of whatever it is.
That's not helpful.
You need to tell me what unitoperation this is used for and
like where I'm going to installit, because I otherwise, like
nobody can tell.
Oscar Gonzalez (15:59):
You know, this is like three-quarter inch by
you don't know what a four yeah,a four centimeter by 18
centimeter.
You don't know exactly whatthat goes to.
Lawrence Wong (16:09):
Yeah, that's it.
So you know there's.
There's that, having a easy tounderstand description.
And then these databases justneed to have a picture of the
thing so that somebody can pullup and go yes, that's the thing
they need.
And Then to your second pointabout People, you know, spending
way too much money on there ontheir budget and not
(16:29):
understanding how they don'thave enough money for other
things.
Well, there it is.
Take a look at your budget foryour area and what amount of
money is being spent onconsumables.
And if you want to spend moneyon other things, well then you
should reduce money spent onconsumables.
And the way to do that isunderstand you know what things
(16:50):
did I buy that I do not use.
Get rid of it and you canallocate the money for other
areas in your function.
Oscar Gonzalez (16:59):
I mean in my function.
My function is my household.
I can look at my pantry and gookay, there's a lot of stuff in
here that we bought either onpurpose or on accident.
We came home one time with acan of I don't know.
It was like it was likesomething in red clam sauce.
We thought it was like pastaand we just like grabbed in and
(17:21):
we laughed.
I can't remember.
This was years ago.
That Existed in my pantry, Ithink, for probably like 18
months, until we're like okay,let's just I don't know drop
this off at a shelter.
It was fine, we just had no usefor it and it somehow magically
appeared because we purchasedon accident.
Now Are we gonna drive, youknow, 15 minutes, 20 minutes, to
(17:43):
the grocery store to return twosmall cans that were 80 cents a
piece?
Probably not, but you know it's.
It's the things that you'redescribing.
I was feel like I should havean inventory for my, for my
pantry as well, and inrefrigerator.
Lawrence Wong (17:57):
Yeah, and it you know back to the database that
you should have some sort oftraceability around the last
time you used it and what thetransaction data looks like,
because that way you can tell,like, okay, within a month or
you know A year, this is howmuch I used of this particular
skew, and then you can stockaccordingly to that.
And then the other thing youshould really do is have, I
(18:20):
would say, categories for yourconsumables and items so that
you can trend.
Yes, you know, for, let's say,I have a bunch of containers
that I buy.
Okay, well, what size containeris most used often and what
vendor do we prefer with theother ones?
You can start to do thisanalysis, you know.
Oscar Gonzalez (18:38):
I think you hit something that we don't see
enough of is categorization ofinventory of activities, of
tasks, of there's so many thingsthat we need to maintain
databases for, and we try tobecome so specific that when we
do not categorize it to someextent it makes it harder to
(19:02):
find what we're looking for andI think what you're.
You know, if I can take whatyour example is for a minute and
put it into, you know, theresearch space Categorize, you
know, is this tissue culture?
Is this, you know, for in vivowork, for animal work?
Is this for stuff on yourdesktop that doesn't really
(19:24):
require, you know, require someaseptic technique but doesn't
really require you to be in abiosafety cabinet?
You know, is this, is this justfor chemicals?
You know, so that when you goback to search you could say I
Got a look for this, but I got alook for this, that's, I got a
look for this particular itemthat I can use in a biosafety
(19:44):
cabinet.
If I buy this other one.
That's something that I use onthe bench top and usually there
are differences and there'sgonna be different, the prices
are gonna be different for thosethings.
So it's, it's smart, you know.
I think you're describing.
A lot of this is is really justUnderstanding your budget and
where your money is coming fromand the amount of space that
(20:05):
you're spending to retain thingsyou know and, and this all kind
of Goes back into that, thatmotion of the, or goes back into
the flow of the, the, thesupply chain and and the lead
times and making sure thatyou're making appropriate orders
.
I know sometimes we go, ohwe're, you know, we think we're
(20:26):
gonna be doing this for a longtime without having really the
data for it.
So let's order a bunch and thenyou order a bulk of it and you
only use 10%.
So what do you?
What do you do with it Then?
What do you do with it Then,when you realize you've already
over estimated, you're listeningto lean by design podcast and
we'll be right back after aquick break.
(20:50):
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If any of this resonates, reachout to the team at Sigma lab
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(21:10):
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Find out more atwwwSigmaLabConsultingcom.
Lawrence Wong (21:24):
Places will not allow you to return things just
because they don't know whateveryou've done to the actual item.
Some of those things might comein certain packs or quantities
so that you won't take it back.
Something like chemicals andthings like that they're not
gonna take back, but it depends.
So I would suggest reaching outto other labs and people in
(21:45):
your network to see if they canrepurpose that for anything that
they're doing in their spaceand Then, to that point you know
, having traceability on whatyou're using the items for In
your experiment, or even to thelab level to understand, like,
where the consumption is.
That'll help you to forecastbetter and maybe you don't order
as much for some of thoseactivities going on in that lab.
(22:07):
I've seen, especially in labareas where you have these like
satellite storage spaces whereyou just stock them to whatever
you know amount is Available inthat space and then they just
restock the area but there's notracking of hey, this particular
lab is using a ridiculousamount of pipettes or whatever
(22:28):
and To kind of track where thespending is, because not all
functional areas will be usingthe same amount of items.
You have some areas that mightbe using.
Oscar Gonzalez (22:41):
So it's folks just walking in.
It's just folks walking in likeI need this, I need this, I
need this, but there's notraceability as to who are the
people that are actuallydepleting these items.
Lawrence Wong (22:51):
So in that case the the budget for your
consumables for the buildingshould really be some sort of
like step down analysis rightwhen you understand, like, what
labs are in this building andthen what percentage of the
budget is being consumed by eachof these labs.
Because the worst thing is youhave a lab that doesn't use you
any consumables at all and thenthey get charged for another lab
(23:14):
using something and they'relike well, why am I paying for
this if I'm not even using anyof those materials?
And so that I think that's morecommon in, like a lab space.
On the manufacturing sidethere's a lot of traceability.
So every time that you scan anitem to a batch record, it has
to record the specific item thatyou use for that batch, because
(23:35):
we have to understand this isthe exact item intended for this
process.
So you're not gonna have thoseissues there.
I think issues you have inmanufacturing are that Sometimes
people might scan the wrongthing and now you kind of have
to reconcile like, oh, did youactually use that or did you use
this?
And then you kind of have tomove that item, return it back,
(23:57):
and Doing those exchanges takesa lot of time from the actual
Team that's on the floor tryingto get their work done, because
now they have to go.
I'll have to return this backinto storage because we were
issued the wrong thing.
And again it goes back toUnderstanding what is the
process that you're running andhow many of those things we
actually need.
(24:17):
This happens all the time inmaintenance because Sometimes
you might drop a gasket or anO-ring and you need an extra one
.
So they'll issue maybe likemaybe five to ten percent more
than what you actually need,just in case, and then they make
the transactions easy.
So you bring back a, a kit, andyou say these are the items I
(24:40):
didn't use and you put them backinto storage.
Not as easy like a check-incheck out so not so easy in
manufacturing, just because alot of these things they come in
plastics and once you kind oftear it apart you can't really
store it back in the originallocation.
Oscar Gonzalez (24:55):
It's already open.
Lawrence Wong (24:56):
Yeah right, you're not gonna get one O-ring,
you're gonna get a pack withfour or you might get like a
like a tubing set With a bunchof clamps and things like that
that.
Oh well, I only use like fiveof it and well, you can't return
the rest of it because you haveto put it back in the original
container.
Oscar Gonzalez (25:13):
Right, right.
So it's definitely you know,and I think, what you're
describing and in many casesthere are other parts of the
organization that couldpotentially use those consumable
.
So if you have this sort ofstructure that's overarching all
these different Materialprocurement spaces, you can at
least say like, oh, there's notone, you know.
(25:34):
Oh, we don't have one here, butthe third floor has four or
something.
Maybe I can check out and getbilled for whatever percentage
of that that I used, somethinglike that.
Lawrence Wong (25:45):
So, yeah, I think , when you're if, for those
people out there that are insituations where you have an
established inventory operationsetup and you're either
manufacturing or a lab space, agood way to start is just by
collecting the feedback from theteams, and That'll generally
(26:06):
point you in the right directionof where you should start to
kind of look at things andIdentify any pain points that
you want to focus on to improve.
Assuming that you don't havedata now, if you have data, you
can kind of look at thetransactions and and Understand
again where is the money goingright?
Follow the dollars and look atwhat items are we buying one off
(26:27):
versus things that we use a lot, and just make sure that you're
stocking appropriately to thoselevels and then look at you
know what activities haveoccurred in the past and what
you plan on doing in the nextcouple of months, so that it
gives your your team enough timeto order things and to stock
the appropriate items.
Now, on the flip side, ifyou're setting up something from
scratch and you don't haveanything set up, I think the
(26:49):
most important thing to do is todo it in an assessment of what
items you need to stock, becausedon't stock everything under
the Sun, because you don't haveenough money in space again.
Really, take a take a hard lookat what are those items that
you're cool, you're absolutelygoing to use, and make sure you
have enough of those to sustainyou for whatever time period you
(27:10):
decide.
Now, right, you know.
There, I think, on the equipmentside, it's a little bit more.
I think the risk is, hey, ifthis Whatever pump or something
breaks and I don't have thisitem for it, I might not be able
to sustain my operation.
Okay, well, we're not going tobuy an entire facility and put
(27:31):
in a stock room, right?
What is the probability of thathappening, right?
I think using the, theunderstanding of a failure rates
and what things might go wrongand Establishing a probability
over them allows you to stockthe right items.
If you're blindly going inthere and buying everything in
the manual, you're just wastinga lot of money and you're buying
(27:53):
things that you might not use.
Oscar Gonzalez (27:55):
Yeah, you're gonna buy something that has
like a life cycle of like fiveyears.
Why do you need that sitting,you know, and and by then
Technology may have advanced,they may have a new product in
five years.
Lawrence Wong (28:07):
I've seen in places where people will stock,
like, a spare motor and they'llleave it on the shelf and It'll
be there for five years, andthen they they try to install it
and they go, oh, it doesn'twork.
And it's like, well, when youstore a motor on an empty shelf,
you have to be wary of thevibration that is in the
building because it impacts theinternal bearings, and if those
(28:29):
internal bearings are messed up,it won't be rotating the right
way.
And so you know what's thepoint of talking that.
And it was because, oh,somebody said that they thought
it might break in the next year.
And it's like, well, if you'rebuying something that is gonna
break in the first year, thenokay.
There's a lot of problems here.
One is you even know how I wasand don't buy that, please,
right?
So you know being able to stockthe things that that won't
(28:54):
expire by the time you use themor, you know, become Not
functioning.
I think the other thing isdon't stock things that nobody
can use.
I've seen places where peoplewill buy replacement parts and
then the technicians go I don'teven know how to replace this,
like, why did we buy this?
And it makes no sense, right?
and and you have the stockpileof Items that nobody knows how
to to use, and then probably forthe lab as well.
(29:17):
People will buy things thatnobody else will use for their
experiment and Then you go well,why do we have so many of these
things?
So you know, having the rightchecks and balances there to
understand you know what are theitems that are critical and
then what things are kind ofone-off items and keep the
quantity low, have some sort ofway to track the transactions,
and how long something's beensitting on the shelf is really
(29:39):
key.
We'll be right back after aquick break.
Oscar Gonzalez (29:43):
Do you suspect your life sciences company could
do things more efficiently?
Maybe you're seeing costlyworkflow issues, or maybe the
work feels more difficult toperform than necessary,
affecting team around.
If any of this resonates, reachout to the team at Sigma lab
consulting for a freeconsultation On how we can
develop and launch a customsolution fit for your team.
(30:04):
Our consultants will build acustom workflow solution for
your team to reach peakefficiency.
Find out more atwwwSigmaLabConsultingcom.
Can you, can you?
You know we're running out oftime here, but I want to see if
(30:24):
you can estimate in some Layerwhat this amounts to in terms of
We've overstocked or we'rewasting time because we don't
have things in stock, or we havethings that people can't use,
or we purchase things.
What would you say is probablya fair range for the cost
(30:48):
associated with a lot of thesechallenges that you've pointed
out today?
Lawrence Wong (30:52):
The cost of your overall inventory.
I would say I'm going to usethe 80-20 rule and say 80% of
your budget is probablyattributed to 20% of the things
that you actually have and then,on the flip side, I would say
80% of your time is being spenton 20% of those like key
activities within that workflow.
(31:13):
For managing the items itself,I think a lot of people struggle
with like doing these routinechecks and being able to measure
okay, what things do I not useanymore?
And then going back to removethose things to make more space
for the things that you actuallyneed.
It is a lot of work to do thosephysical counts and keep track
(31:36):
of the dollars that go alongwith it, but at the end of the
day, that money can be allocatedto other things that are much
better valued right.
Oscar Gonzalez (31:48):
Value generated.
Lawrence Wong (31:50):
There's other things that you can spend the
money on.
The last thing you want to tellyour management is hey, we
bought a bunch of boxes thattake up half the lab, that we
don't know if they're goodanymore, right?
Oscar Gonzalez (32:03):
Or they were purchased before we got here.
Okay, well, now what do we do?
You know, lawrence, I've you'vehit on so many things that I
have experienced on a smallerscale within a laboratory.
But just you know, I thinkbringing this level of clarity
(32:24):
to the overspend, the underspend, the lack of managing the
materials that we maintainwithin our organizations, our
laboratories, manufacturingfacilities, etc.
It's a real challenge, it's areal problem that we need to try
to address, because there's,you know, money is only getting
(32:45):
tighter and we still need tocontinue to produce science in
new ways and innovative, usinginnovative technologies, and
those require additional, notonly just additional headcount,
but additional consumables andadditional supplies, etc.
And so I think we need to havethis renewed focus on what are
(33:11):
we actually spending and how canwe best assess what is
necessary?
You know, how do we create,dare I say, a lean environment
that allows us to be preparedwhen something goes short, and
prepare ourselves to or preventourselves from over-ordering
(33:35):
topics?
So anything, anything else thatI missed that you want to add
before we say goodbye.
Lawrence Wong (33:41):
One more thing is something that is very
difficult to measure and Ihaven't seen anybody be able to
measure.
It is the amount of stress thatis placed on the inventory
operations team when thingsdon't work right, because
they're usually stuck in themiddle where you have management
telling them hey, you need tospend less.
And then you have other I wouldsay users that are like we
(34:04):
don't have enough of this, so weneed to buy more, and you're
balancing this.
Oscar Gonzalez (34:07):
I need this yeah .
Lawrence Wong (34:08):
What do you want me to do right?
And so there's this stress thatgets placed and blame, I would
say, on the inventory teams.
A lot of times, and a lot of itis, I think it's blame that
should be spread around.
Right Management should haveclear indications of how do we
know whether or not we arestocking enough to schedule the
(34:30):
experiments that are going onand the operations that are
going on.
Right, because if you'retelling your teams to do a bunch
of things and now you have tobuy a bunch of material but
you're not factoring that intoyour budget, how does that do
anybody good when the scientistsare trying to order stuff and
the inventory is telling them no, you can't order it because our
budget is X right.
And so there's now you havethis stress right, full
(34:50):
situation that definitely couldhave been avoided if everybody
was on the same page.
Oscar Gonzalez (34:57):
Right, I can't agree with you more, lawrence.
Thanks again for thatdiscussion, for those points.
I think it's super critical andit's going to be really
important for folks to hear youknow to our listeners.
You know, take these things andthink about how is your
(35:19):
inventory in your space?
It could be a laboratory, itcould be the manufacturing space
, it could be in a certainfacility.
You know how are you guysmanaging it and how, what value
can you drive toward yourorganization?
You know these are small winsthat I think are capable to be
delivered by folks that are newin the organization or folks
(35:43):
that have been there for a while.
You know these are small winswhere you can say, hey, I've run
this quick analysis and I seethat we're only using, you know,
40% of what we're ordering oversix months.
So you know you can run theseanalysis in a very controlled
space and controlled setting.
You know when you have the dataand if you don't have the data,
start collecting it.
Think about those individualorders.
(36:04):
I think I told you before,lawrence, when I was first
working in the industry, I wasreplacing a lab manager and I
was getting order requests on apost-it note and it would just
say, like six wall plates.
There are like 45 differentvariations of six wall plates.
(36:25):
I said where did you order from?
Oh, I don't know.
Just start going into all thedifferent, go to these different
websites and see where the mostrecent order was.
That's crazy, that's.
I mean, how much time am Igoing to spend, how much am I
getting paid, to now searchorder history on various
websites to find out where welast purchased this item?
(36:45):
Yeah, let's think about how weuse our time a little bit more
efficiently.
Lawrence Wong (36:48):
Unfortunately, that is very common in our space
and you know, I think the lastthing that a scientist or a
manufacturing operator or atechnician wants is when they're
about to do their job and theydon't have the materials that
they need to do their job.
Oscar Gonzalez (37:07):
Right, right.
Well, that's the time that wehave for today.
So, lawrence, again, I alwaysappreciate our conversations and
we hope that all of ourlisteners get something from
this and really can take it backto their organizations and
start to rethink about how youmanage the work that's going on
(37:31):
in your supply chains, in yourinventories, in your spaces.
Yeah, so, thanks again, and, inthe words of my man, lawrence,
over here, what's smarter?
Lawrence Wong (37:44):
And if if anybody has a topic that they want us
to discuss, please just shoot usa message on LinkedIn or email
and we can bring that up as well.
Oscar Gonzalez (37:55):
Yeah, we'd love to hear from you, we'd love to
talk about that and we'd love toyou know, bring that attention
into the space to really driveefficiency in our operations.
Thanks again for listening,until next time.
(38:17):
From our discussion today oninventory management, we looked
into the delicate balancing actbetween overstocking and
understocking, which cannot bestressed enough.
Ensuring that we have the rightquantities of essential items
while minimizing surplus notonly protects the scarce
financial resources, but alsofosters efficient operations.
We also delved into the immensevalue of proactive planning,
(38:42):
which acts as an antidote tomany operational disruptions.
Moreover, communications andalignment stand out as the
backbone of inventory management, bridging gaps between
departments and ensuringeveryone remains on the same
page.
We also recognize theunderlying psychological strain
on inventory personnel,emphasizing the importance of
(39:03):
adequate training, support andacknowledgement of their pivotal
role.
Lastly, in the ever-evolvingworld of inventory, embracing
technology and innovationsolutions should be the beacon
guiding companies towardoperational excellence.
A proactive, communicative andtechnologically adept approach
to inventory management is theway forward for all
(39:26):
organizations aiming for peakperformance and to become lean
by design.
Thanks for listening.
Don't forget to leave us areview, like and share on
Spotify, apple and GooglePodcasts or wherever you get
your podcasts, and, if you'reinterested in being on the show
(39:47):
or becoming a sponsor, send us amessage at Lean by Design at
SigmaLabConsultingcom.
The descriptions of these items are tubing set
and they usually list thedimensions of whatever it is.
That's not helpful.
You need to tell me what unitoperation this is used for and
where I'm going to install it,because otherwise nobody can
tell.
This is like three-quarter inchby two feet and it's like
that's not helpful.
Oscar Gonzalez (00:20):
Welcome to Lean by Design Podcast.
I'm your host, Oscar Gonzalez,alongside my co-host Lawrence
Wong.
We are former MBA classmatesturned business partners, with
over 25 years of combinedexperience in life sciences,
from R&D through manufacturing.
Our experiences have shed lightinto the complex, ever-changing
challenges experienced by thisindustry and many others.
(00:42):
We took a risk quit oursix-figure paying jobs in Boston
Biotech and Pharma to startSigma Lab Consulting.
Journey with us as we explorethe relationship between people
and workflow design, the goal Tolearn, inspire and deliver
practical tips to navigate theseever-changing challenges.
Stick with us and learn to worksmarter, not harder, and be
(01:05):
lean by design.
In today's fast-paced world,effective inventory management
stands as the cornerstone ofoperational efficiency,
especially pivotal in the lifesciences and manufacturing
sectors.
Consider a lab technician onthe cusp of a pivotal experiment
(01:26):
, only to find that a criticalsupply is run dry.
Visualize the exasperation ofan inventory manager navigating
a lab-rent of websites just totrace a past order.
Such real-world scenariosaccentuate the necessity of
efficient inventory processes.
In today's episode, we'llunravel the challenges and
(01:47):
strategies around distinguishingcritical items from one-offs,
the financial implications ofinventory decisions, the
operational hurdles faced byteams, the psychological stress
on inventory personnel and theundeniable importance of
seamless communication andalignment Plus.
Get a glimpse of the future aswe explore modern, smarter
(02:08):
solutions that are redefiningthe inventory landscape.
Join us as we unpack thesetopics and delve into the world
of inventory management,offering insights and strategies
that are bound to revolutionizeyour approach and help you to
become lean by design.
And we are back for anotherepisode.
(02:32):
I'm your host, oscar Gonzalez.
You know, I don't even thinkthat I introduced myself in the
last episode, so hopefullypeople know why I'm doing it now
.
Lawrence Wong (02:40):
Yeah, we can insert the.
Oscar Gonzalez (02:42):
Exactly the power of editing.
The power of editing, yeah.
So I'm here with my friend,business partner, lawrence, and
I see this again post that we'vedone through LinkedIn and we're
hoping to elaborate on a lot ofthese topics that we've been
(03:02):
pushing out through social mediaand making sure that we're
delivering the content thatmakes sense and is relevant to
our listeners.
And there's a big challenge, Ithink that comes in
manufacturing and facilityoperations and that's the
inventory.
So, lawrence, I'm looking backat what you had put together and
(03:29):
what you had put out and we'retalking about performance of
inventory operations.
What does that mean in yourterms and in your space,
inventory operations?
Can you elaborate on that?
Lawrence Wong (03:46):
Yeah.
So there's kind of two, I wouldsay, areas One is the
consumables and items that youmight use for supporting
manufacturing activities and theother part of it is your spare
parts that you have forservicing any of the equipment
and instruments that you have inyour facility.
So the post that I had put outis supposed to be relevant to
(04:09):
both areas and, depending on thenuances of your operation,
there might be certain systemsthat you use, maybe like an SAP,
versus a maintenance managementsystem where the data resides
for where you're storing themaster data around your
inventory, and so, depending onthe systems, you might have
(04:32):
unique challenges to both.
But I think, if we're justspeaking about generalities here
, there's a couple of, I wouldsay, problems that a lot of
these companies have whenthey're managing inventory.
In either situation One stockand order challenges you have
concerns with your database andjust the management of how the
(04:54):
items are stored in the facility, and then the other one is just
job management and qualitycontrol.
So with the stock and orderchallenges, you have either
overstocking, understocking andthis long procurement process.
So overstocking means you don'thave enough money and space,
but you keep ordering things andthat's really detrimental to
(05:18):
your overall bottom line.
I've seen that, yeah, and theother end of it is it's like
skyscrapers of boxes.
Yes, you have items that nobodyknows exists, and so you there,
order more things that you don'tneed, and then they end up just
collecting dust or they expirein some sense.
The other end of it isunderstocking for activities
(05:40):
that you have planned, and nowyou cannot do those things
because you did not order aheadof time and stock appropriately,
and both of those issues aresomewhat related to the
procurement process too.
So if you do need to restocksome item that you already have
in-house or you're trying toorder something new, the
(06:02):
procurement process usuallyinvolves somebody filling out a
form and then somebody has toapprove it.
If it's over a certain dollaramount, it goes to upper
management and they'll have totake a look at it and then
approve it.
So oftentimes the internalprocess is very convoluted and
complicated and certainapprovers are not involved, and
(06:24):
so the quantities that you endup ordering aren't vetted
through.
And then the other end of it isthe longer that you take to
actually place the order.
That lead time that you got onthat initial quote just keeps
getting larger, and sometimes itgets smaller.
But in past years, because ofCOVID and what we call supply
chain issues, that lead timeusually extends because the
(06:46):
companies are fulfilling ordersfor other customers Right.
Oscar Gonzalez (06:51):
Right, so we're, you know.
It's funny because this remindsme a little bit of somewhere
that I used to work, where I wasworking in the lab.
This was an academicinstitution years ago where we
just continued to purchase andwe are very frugal about the
(07:11):
money spent.
Now what happens in academicresearch is sort of like if
you're not spending the moneythat you said that you needed to
run your excuse me to run yourexperiments for that grant in
the research space, when youhave grants that are federally
funded or funded throughorganizations, usually you have
to provide some level of anupdate financially and
(07:35):
scientifically.
And I remember one incidentwhere we had four weeks left in
the fiscal year and I received amandate or, I guess, a task
from my boss to say, hey, I needyou to spend $100,000 and make
sure it arrives in the next fourweeks, but it had to be on
(08:01):
consumables, are you serious?
So we ended up with stackedboxes that almost went to the
ceiling of filters, culture,media, which is light, sensitive
, just a number of things.
And it was again a lack ofknowing the inventory, knowing
(08:25):
our budget, knowing where weneeded to go.
Now you usually don't see thatkind of issue in, I would
imagine in manufacturingfacilities, of lacking, having
to spend a certain amount ofmoney by a certain time.
But I've seen those towers ofsupplies and I also see folks
(08:46):
that go into that workspace andsay I don't know, that was here
before I got here.
Like what do you say to?
Kind of that, because I knowthese things don't just start by
themselves.
And sometimes you join in anorganization and you look at
their inventory and you go whatis all this stuff?
And everyone, scientistsincluded, shrug their shoulders.
Lawrence Wong (09:08):
Yeah so this kind of goes into that second topic
or focus here, which is thedatabase and the storage
concerns.
So we all do not work in placesthe size of Costco, so it
doesn't make sense for people toorder copious amounts of
materials to just store them ina place that you'll never use.
So I think one of the thingsthat a lot of people don't do is
(09:31):
having physical counts ofwhatever you have on hand, so
that you prevent other peoplefrom ordering extra things,
because people order thingsbecause they don't know that you
have them in-house, right?
People don't show up to workand order things just because
they want to.
It's usually because they needit for something and it comes
(09:51):
from a good place.
But to prevent that, you needto have these routine checks of
what you have in-house, and theanalogy I would use is you don't
go to the grocery store withoutunderstanding what is in your
refrigerator.
So you need to have anunderstanding of what you have
in-house and how those thingssupport your upcoming activities
.
I have, by the way.
Oscar Gonzalez (10:13):
I have done that and it's a disaster.
Lawrence Wong (10:15):
Right, you binge buy and you buy a bunch of
random stuff that you don'tactually need.
So that's one thing, right,doing the physical counts, and
the other thing I would say isthe data that you are managing
within your database also has tobe searchable.
So I've seen databases whereyou might do the physical
inspections and you might havean accurate count, but nobody
(10:37):
can find the thing that theyneed because the descriptions
are all off.
There's not enough nuance towhat exactly the item is.
Most databases don't have apicture of the actual item, so
you think it's one thing, butthen you show up and it's
another thing, and then they go.
Well, I guess we don't have it.
And then now you have to ordersomething else, and then you
have these mismatches ofdescription.
Oscar Gonzalez (10:59):
You're not gonna return.
You're not gonna return thoseother things.
Lawrence Wong (11:02):
You're not gonna return those other things
because, like you said, somebodysays that was here before I got
here, and so they're not gonnago through the effort of
removing those things becauseit's taking up space and nobody
actually uses them.
So there's gotta be a lot ofeffort around when you set up
your stock room to have a formatfor how you're gonna name
(11:26):
things so that the people thatsearch for them know what it is.
And then it's really great tojust have a spot where you can
actually have the labels, anysort of information about the
SKU, or maybe the website, justsomething where somebody can
click on and go okay, that'sexactly what I want.
In most cases, it's the personwho's inputting the data
deciding what they think isappropriate, but 99% of the time
(11:51):
the person who's putting in thedata is not the person using
the item, and so it's veryuseless for the user to look at
the description and go what isthis?
And so that creates thisdefinitely avoidable stress that
you can have and creates thatriff between your inventory team
and either your scientists,your technicians or your
(12:11):
mechanics.
Oscar Gonzalez (12:13):
There's a lot of challenges in inventory, and I
think not only just in inventory, but in databases in general,
and you're really you'retouching on that, which is sort
of nomenclature.
A lot of what I do from workingwith Project and Project
Support is I'm gonna createconsistent nomenclature across
everything.
If you adopt it, great.
If you don't change everythingtogether at the same time,
(12:36):
because what you're seeing isthat you'll have inventory and
the search terms may havemisspelling.
That's a common thing, thatthere's a letter left off and so
it doesn't show up on yoursearch terms and you don't think
it's there.
And it's actually there.
Somebody just spelled itincorrectly or they left a vowel
or something like that.
Other places they will.
(12:57):
What part of the descriptionare they gonna put the SKU
number?
Do you look at the manufacturerSKU or do you look at the SKU
from where you're ordering?
And I think that sometimesyou'll find that there are two
different things and in somecases where we don't wanna
purchase this from this place,we wanna purchase it from
(13:19):
somewhere else, thatmanufacturing SKU is gonna be
critical to making sure thatyou're aligning one-to-one On a
much smaller scale.
I have felt a lot of what you'redescribing in laboratory
management.
So, being a lab manager, when Istarted off my career, I
(13:41):
started to notice that therewere logs of inventory products,
of products that we have,whether they were for cell
culture or for bench topexperiments and the like, but
there were so many versions ofthe same thing.
We just continued to buy a casefor this, three cases for that,
(14:04):
two cases for that, and it mayjust be for initial experimental
stuff, like we wanna see ifthis works.
And so what happens?
Oh, that didn't work, let's goto something else.
And so now you have a case hereof plates that are treated with
whatever, now just taking upspace in your inventory, and
it's valuable.
Sometimes you have these thingsand I'm imagining the cost of
(14:28):
inventory items formanufacturing and facilities is
gonna be much more expensive,especially there's heavy
equipment there.
But you're talking, hey, eachof those cases, yeah, that's 500
bucks, so there's 25 in here.
Awesome, that's a couple ofthousand dollars.
It now is just sitting, justsitting there.
(14:48):
And what's one of the mainissues with trying to develop
and trying to do research?
Oh, we don't have the money.
We don't have the money you do.
It's sitting over there in thatcloset with all those things
that you guys don't even touch.
It's crazy.
Lawrence Wong (15:04):
Yeah, I think you know two points here.
One is is the descriptions thatyou mentioned.
So as a rule of thumb, you knowthere there is the Catalog
number and then there's usuallysome vendor part number or
whatever.
Yeah, even if you don't use theeither one to do your primary
search, you should extract theinformation from the label and
(15:25):
put it somewhere so thatsomebody else can search for it.
I think the other thing is isto have the description of
whatever the vendor calls it,but have a description for what
your own people call it, becausethat's usually Something that
they know is much more helpful.
So, as an example, a lot ofsingle-use manufacturing
facilities have a lot of tubingsets, and so the descriptions of
(15:47):
these items are tubing set andthey usually list the dimensions
of whatever it is.
That's not helpful.
You need to tell me what unitoperation this is used for and
like where I'm going to installit, because I otherwise, like
nobody can tell.
Oscar Gonzalez (15:59):
You know, this is like three-quarter inch by
you don't know what a four yeah,a four centimeter by 18
centimeter.
You don't know exactly whatthat goes to.
Lawrence Wong (16:09):
Yeah, that's it.
So you know there's.
There's that, having a easy tounderstand description.
And then these databases justneed to have a picture of the
thing so that somebody can pullup and go yes, that's the thing
they need.
And Then to your second pointabout People, you know, spending
way too much money on there ontheir budget and not
(16:29):
understanding how they don'thave enough money for other
things.
Well, there it is.
Take a look at your budget foryour area and what amount of
money is being spent onconsumables.
And if you want to spend moneyon other things, well then you
should reduce money spent onconsumables.
And the way to do that isunderstand you know what things
(16:50):
did I buy that I do not use.
Get rid of it and you canallocate the money for other
areas in your function.
Oscar Gonzalez (16:59):
I mean in my function.
My function is my household.
I can look at my pantry and gookay, there's a lot of stuff in
here that we bought either onpurpose or on accident.
We came home one time with acan of I don't know.
It was like it was likesomething in red clam sauce.
We thought it was like pastaand we just like grabbed in and
(17:21):
we laughed.
I can't remember.
This was years ago.
That Existed in my pantry, Ithink, for probably like 18
months, until we're like okay,let's just I don't know drop
this off at a shelter.
It was fine, we just had no usefor it and it somehow magically
appeared because we purchasedon accident.
Now Are we gonna drive, youknow, 15 minutes, 20 minutes, to
(17:43):
the grocery store to return twosmall cans that were 80 cents a
piece?
Probably not, but you know it's.
It's the things that you'redescribing.
I was feel like I should havean inventory for my, for my
pantry as well, and inrefrigerator.
Lawrence Wong (17:57):
Yeah, and it you know back to the database that
you should have some sort oftraceability around the last
time you used it and what thetransaction data looks like,
because that way you can tell,like, okay, within a month or
you know A year, this is howmuch I used of this particular
skew, and then you can stockaccordingly to that.
And then the other thing youshould really do is have, I
(18:20):
would say, categories for yourconsumables and items so that
you can trend.
Yes, you know, for, let's say,I have a bunch of containers
that I buy.
Okay, well, what size containeris most used often and what
vendor do we prefer with theother ones?
You can start to do thisanalysis, you know.
Oscar Gonzalez (18:38):
I think you hit something that we don't see
enough of is categorization ofinventory of activities, of
tasks, of there's so many thingsthat we need to maintain
databases for, and we try tobecome so specific that when we
do not categorize it to someextent it makes it harder to
(19:02):
find what we're looking for andI think what you're.
You know, if I can take whatyour example is for a minute and
put it into, you know, theresearch space Categorize, you
know, is this tissue culture?
Is this, you know, for in vivowork, for animal work?
Is this for stuff on yourdesktop that doesn't really
(19:24):
require, you know, require someaseptic technique but doesn't
really require you to be in abiosafety cabinet?
You know, is this, is this justfor chemicals?
You know, so that when you goback to search you could say I
Got a look for this, but I got alook for this, that's, I got a
look for this particular itemthat I can use in a biosafety
(19:44):
cabinet.
If I buy this other one.
That's something that I use onthe bench top and usually there
are differences and there'sgonna be different, the prices
are gonna be different for thosethings.
So it's, it's smart, you know.
I think you're describing.
A lot of this is is really justUnderstanding your budget and
where your money is coming fromand the amount of space that
(20:05):
you're spending to retain thingsyou know and, and this all kind
of Goes back into that, thatmotion of the, or goes back into
the flow of the, the, thesupply chain and and the lead
times and making sure thatyou're making appropriate orders
.
I know sometimes we go, ohwe're, you know, we think we're
(20:26):
gonna be doing this for a longtime without having really the
data for it.
So let's order a bunch and thenyou order a bulk of it and you
only use 10%.
So what do you?
What do you do with it Then?
What do you do with it Then,when you realize you've already
over estimated, you're listeningto lean by design podcast and
we'll be right back after aquick break.
(20:50):
Do you suspect your lifesciences company could do things
more efficiently?
Maybe you're seeing costlyworkflow issues or maybe the
work feels more difficult toperform than necessary,
affecting team morale.
If any of this resonates, reachout to the team at Sigma lab
consulting for a freeconsultation on how we can
develop and launch a Customsolution fit for your team.
(21:10):
Our consultants will build acustom workflow solution for
your team to reach peakefficiency.
Find out more atwwwSigmaLabConsultingcom.
Lawrence Wong (21:24):
Places will not allow you to return things just
because they don't know whateveryou've done to the actual item.
Some of those things might comein certain packs or quantities
so that you won't take it back.
Something like chemicals andthings like that they're not
gonna take back, but it depends.
So I would suggest reaching outto other labs and people in
(21:45):
your network to see if they canrepurpose that for anything that
they're doing in their spaceand Then, to that point you know
, having traceability on whatyou're using the items for In
your experiment, or even to thelab level to understand, like,
where the consumption is.
That'll help you to forecastbetter and maybe you don't order
as much for some of thoseactivities going on in that lab.
(22:07):
I've seen, especially in labareas where you have these like
satellite storage spaces whereyou just stock them to whatever
you know amount is Available inthat space and then they just
restock the area but there's notracking of hey, this particular
lab is using a ridiculousamount of pipettes or whatever
(22:28):
and To kind of track where thespending is, because not all
functional areas will be usingthe same amount of items.
You have some areas that mightbe using.
Oscar Gonzalez (22:41):
So it's folks just walking in.
It's just folks walking in likeI need this, I need this, I
need this, but there's notraceability as to who are the
people that are actuallydepleting these items.
Lawrence Wong (22:51):
So in that case the the budget for your
consumables for the buildingshould really be some sort of
like step down analysis rightwhen you understand, like, what
labs are in this building andthen what percentage of the
budget is being consumed by eachof these labs.
Because the worst thing is youhave a lab that doesn't use you
any consumables at all and thenthey get charged for another lab
(23:14):
using something and they'relike well, why am I paying for
this if I'm not even using anyof those materials?
And so that I think that's morecommon in, like a lab space.
On the manufacturing sidethere's a lot of traceability.
So every time that you scan anitem to a batch record, it has
to record the specific item thatyou use for that batch, because
(23:35):
we have to understand this isthe exact item intended for this
process.
So you're not gonna have thoseissues there.
I think issues you have inmanufacturing are that Sometimes
people might scan the wrongthing and now you kind of have
to reconcile like, oh, did youactually use that or did you use
this?
And then you kind of have tomove that item, return it back,
(23:57):
and Doing those exchanges takesa lot of time from the actual
Team that's on the floor tryingto get their work done, because
now they have to go.
I'll have to return this backinto storage because we were
issued the wrong thing.
And again it goes back toUnderstanding what is the
process that you're running andhow many of those things we
actually need.
(24:17):
This happens all the time inmaintenance because Sometimes
you might drop a gasket or anO-ring and you need an extra one
.
So they'll issue maybe likemaybe five to ten percent more
than what you actually need,just in case, and then they make
the transactions easy.
So you bring back a, a kit, andyou say these are the items I
(24:40):
didn't use and you put them backinto storage.
Not as easy like a check-incheck out so not so easy in
manufacturing, just because alot of these things they come in
plastics and once you kind oftear it apart you can't really
store it back in the originallocation.
Oscar Gonzalez (24:55):
It's already open.
Lawrence Wong (24:56):
Yeah right, you're not gonna get one O-ring,
you're gonna get a pack withfour or you might get like a
like a tubing set With a bunchof clamps and things like that
that.
Oh well, I only use like fiveof it and well, you can't return
the rest of it because you haveto put it back in the original
container.
Oscar Gonzalez (25:13):
Right, right.
So it's definitely you know,and I think, what you're
describing and in many casesthere are other parts of the
organization that couldpotentially use those consumable
.
So if you have this sort ofstructure that's overarching all
these different Materialprocurement spaces, you can at
least say like, oh, there's notone, you know.
(25:34):
Oh, we don't have one here, butthe third floor has four or
something.
Maybe I can check out and getbilled for whatever percentage
of that that I used, somethinglike that.
Lawrence Wong (25:45):
So, yeah, I think , when you're if, for those
people out there that are insituations where you have an
established inventory operationsetup and you're either
manufacturing or a lab space, agood way to start is just by
collecting the feedback from theteams, and That'll generally
(26:06):
point you in the right directionof where you should start to
kind of look at things andIdentify any pain points that
you want to focus on to improve.
Assuming that you don't havedata now, if you have data, you
can kind of look at thetransactions and and Understand
again where is the money goingright?
Follow the dollars and look atwhat items are we buying one off
(26:27):
versus things that we use a lot, and just make sure that you're
stocking appropriately to thoselevels and then look at you
know what activities haveoccurred in the past and what
you plan on doing in the nextcouple of months, so that it
gives your your team enough timeto order things and to stock
the appropriate items.
Now, on the flip side, ifyou're setting up something from
scratch and you don't haveanything set up, I think the
(26:49):
most important thing to do is todo it in an assessment of what
items you need to stock, becausedon't stock everything under
the Sun, because you don't haveenough money in space again.
Really, take a take a hard lookat what are those items that
you're cool, you're absolutelygoing to use, and make sure you
have enough of those to sustainyou for whatever time period you
(27:10):
decide.
Now, right, you know.
There, I think, on the equipmentside, it's a little bit more.
I think the risk is, hey, ifthis Whatever pump or something
breaks and I don't have thisitem for it, I might not be able
to sustain my operation.
Okay, well, we're not going tobuy an entire facility and put
(27:31):
in a stock room, right?
What is the probability of thathappening, right?
I think using the, theunderstanding of a failure rates
and what things might go wrongand Establishing a probability
over them allows you to stockthe right items.
If you're blindly going inthere and buying everything in
the manual, you're just wastinga lot of money and you're buying
(27:53):
things that you might not use.
Oscar Gonzalez (27:55):
Yeah, you're gonna buy something that has
like a life cycle of like fiveyears.
Why do you need that sitting,you know, and and by then
Technology may have advanced,they may have a new product in
five years.
Lawrence Wong (28:07):
I've seen in places where people will stock,
like, a spare motor and they'llleave it on the shelf and It'll
be there for five years, andthen they they try to install it
and they go, oh, it doesn'twork.
And it's like, well, when youstore a motor on an empty shelf,
you have to be wary of thevibration that is in the
building because it impacts theinternal bearings, and if those
(28:29):
internal bearings are messed up,it won't be rotating the right
way.
And so you know what's thepoint of talking that.
And it was because, oh,somebody said that they thought
it might break in the next year.
And it's like, well, if you'rebuying something that is gonna
break in the first year, thenokay.
There's a lot of problems here.
One is you even know how I wasand don't buy that, please,
right?
So you know being able to stockthe things that that won't
(28:54):
expire by the time you use themor, you know, become Not
functioning.
I think the other thing isdon't stock things that nobody
can use.
I've seen places where peoplewill buy replacement parts and
then the technicians go I don'teven know how to replace this,
like, why did we buy this?
And it makes no sense, right?
and and you have the stockpileof Items that nobody knows how
to to use, and then probably forthe lab as well.
(29:17):
People will buy things thatnobody else will use for their
experiment and Then you go well,why do we have so many of these
things?
So you know, having the rightchecks and balances there to
understand you know what are theitems that are critical and
then what things are kind ofone-off items and keep the
quantity low, have some sort ofway to track the transactions,
and how long something's beensitting on the shelf is really
(29:39):
key.
We'll be right back after aquick break.
Oscar Gonzalez (29:43):
Do you suspect your life sciences company could
do things more efficiently?
Maybe you're seeing costlyworkflow issues, or maybe the
work feels more difficult toperform than necessary,
affecting team around.
If any of this resonates, reachout to the team at Sigma lab
consulting for a freeconsultation On how we can
develop and launch a customsolution fit for your team.
(30:04):
Our consultants will build acustom workflow solution for
your team to reach peakefficiency.
Find out more atwwwSigmaLabConsultingcom.
Can you, can you?
You know we're running out oftime here, but I want to see if
(30:24):
you can estimate in some Layerwhat this amounts to in terms of
We've overstocked or we'rewasting time because we don't
have things in stock, or we havethings that people can't use,
or we purchase things.
What would you say is probablya fair range for the cost
(30:48):
associated with a lot of thesechallenges that you've pointed
out today?
Lawrence Wong (30:52):
The cost of your overall inventory.
I would say I'm going to usethe 80-20 rule and say 80% of
your budget is probablyattributed to 20% of the things
that you actually have and then,on the flip side, I would say
80% of your time is being spenton 20% of those like key
activities within that workflow.
(31:13):
For managing the items itself,I think a lot of people struggle
with like doing these routinechecks and being able to measure
okay, what things do I not useanymore?
And then going back to removethose things to make more space
for the things that you actuallyneed.
It is a lot of work to do thosephysical counts and keep track
(31:36):
of the dollars that go alongwith it, but at the end of the
day, that money can be allocatedto other things that are much
better valued right.
Oscar Gonzalez (31:48):
Value generated.
Lawrence Wong (31:50):
There's other things that you can spend the
money on.
The last thing you want to tellyour management is hey, we
bought a bunch of boxes thattake up half the lab, that we
don't know if they're goodanymore, right?
Oscar Gonzalez (32:03):
Or they were purchased before we got here.
Okay, well, now what do we do?
You know, lawrence, I've you'vehit on so many things that I
have experienced on a smallerscale within a laboratory.
But just you know, I thinkbringing this level of clarity
(32:24):
to the overspend, the underspend, the lack of managing the
materials that we maintainwithin our organizations, our
laboratories, manufacturingfacilities, etc.
It's a real challenge, it's areal problem that we need to try
to address, because there's,you know, money is only getting
(32:45):
tighter and we still need tocontinue to produce science in
new ways and innovative, usinginnovative technologies, and
those require additional, notonly just additional headcount,
but additional consumables andadditional supplies, etc.
And so I think we need to havethis renewed focus on what are
(33:11):
we actually spending and how canwe best assess what is
necessary?
You know, how do we create,dare I say, a lean environment
that allows us to be preparedwhen something goes short, and
prepare ourselves to or preventourselves from over-ordering
(33:35):
topics?
So anything, anything else thatI missed that you want to add
before we say goodbye.
Lawrence Wong (33:41):
One more thing is something that is very
difficult to measure and Ihaven't seen anybody be able to
measure.
It is the amount of stress thatis placed on the inventory
operations team when thingsdon't work right, because
they're usually stuck in themiddle where you have management
telling them hey, you need tospend less.
And then you have other I wouldsay users that are like we
(34:04):
don't have enough of this, so weneed to buy more, and you're
balancing this.
Oscar Gonzalez (34:07):
I need this yeah .
Lawrence Wong (34:08):
What do you want me to do right?
And so there's this stress thatgets placed and blame, I would
say, on the inventory teams.
A lot of times, and a lot of itis, I think it's blame that
should be spread around.
Right Management should haveclear indications of how do we
know whether or not we arestocking enough to schedule the
(34:30):
experiments that are going onand the operations that are
going on.
Right, because if you'retelling your teams to do a bunch
of things and now you have tobuy a bunch of material but
you're not factoring that intoyour budget, how does that do
anybody good when the scientistsare trying to order stuff and
the inventory is telling them no, you can't order it because our
budget is X right.
And so there's now you havethis stress right, full
(34:50):
situation that definitely couldhave been avoided if everybody
was on the same page.
Oscar Gonzalez (34:57):
Right, I can't agree with you more, lawrence.
Thanks again for thatdiscussion, for those points.
I think it's super critical andit's going to be really
important for folks to hear youknow to our listeners.
You know, take these things andthink about how is your
(35:19):
inventory in your space?
It could be a laboratory, itcould be the manufacturing space
, it could be in a certainfacility.
You know how are you guysmanaging it and how, what value
can you drive toward yourorganization?
You know these are small winsthat I think are capable to be
delivered by folks that are newin the organization or folks
(35:43):
that have been there for a while.
You know these are small winswhere you can say, hey, I've run
this quick analysis and I seethat we're only using, you know,
40% of what we're ordering oversix months.
So you know you can run theseanalysis in a very controlled
space and controlled setting.
You know when you have the dataand if you don't have the data,
start collecting it.
Think about those individualorders.
(36:04):
I think I told you before,lawrence, when I was first
working in the industry, I wasreplacing a lab manager and I
was getting order requests on apost-it note and it would just
say, like six wall plates.
There are like 45 differentvariations of six wall plates.
(36:25):
I said where did you order from?
Oh, I don't know.
Just start going into all thedifferent, go to these different
websites and see where the mostrecent order was.
That's crazy, that's.
I mean, how much time am Igoing to spend, how much am I
getting paid, to now searchorder history on various
websites to find out where welast purchased this item?
(36:45):
Yeah, let's think about how weuse our time a little bit more
efficiently.
Lawrence Wong (36:48):
Unfortunately, that is very common in our space
and you know, I think the lastthing that a scientist or a
manufacturing operator or atechnician wants is when they're
about to do their job and theydon't have the materials that
they need to do their job.
Oscar Gonzalez (37:07):
Right, right.
Well, that's the time that wehave for today.
So, lawrence, again, I alwaysappreciate our conversations and
we hope that all of ourlisteners get something from
this and really can take it backto their organizations and
start to rethink about how youmanage the work that's going on
(37:31):
in your supply chains, in yourinventories, in your spaces.
Yeah, so, thanks again, and, inthe words of my man, lawrence,
over here, what's smarter?
Lawrence Wong (37:44):
And if if anybody has a topic that they want us
to discuss, please just shoot usa message on LinkedIn or email
and we can bring that up as well.
Oscar Gonzalez (37:55):
Yeah, we'd love to hear from you, we'd love to
talk about that and we'd love toyou know, bring that attention
into the space to really driveefficiency in our operations.
Thanks again for listening,until next time.
(38:17):
From our discussion today oninventory management, we looked
into the delicate balancing actbetween overstocking and
understocking, which cannot bestressed enough.
Ensuring that we have the rightquantities of essential items
while minimizing surplus notonly protects the scarce
financial resources, but alsofosters efficient operations.
We also delved into the immensevalue of proactive planning,
(38:42):
which acts as an antidote tomany operational disruptions.
Moreover, communications andalignment stand out as the
backbone of inventory management, bridging gaps between
departments and ensuringeveryone remains on the same
page.
We also recognize theunderlying psychological strain
on inventory personnel,emphasizing the importance of
(39:03):
adequate training, support andacknowledgement of their pivotal
role.
Lastly, in the ever-evolvingworld of inventory, embracing
technology and innovationsolutions should be the beacon
guiding companies towardoperational excellence.
A proactive, communicative andtechnologically adept approach
to inventory management is theway forward for all
(39:26):
organizations aiming for peakperformance and to become lean
by design.
Thanks for listening.
Don't forget to leave us areview, like and share on
Spotify, apple and GooglePodcasts or wherever you get
your podcasts, and, if you'reinterested in being on the show
(39:47):
or becoming a sponsor, send us amessage at Lean by Design at
SigmaLabConsultingcom.
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