Inventory Wake-Up Call: Biotech’s Neglected Cornerstone
By Bob Beliveau
During the heyday of the genomics revolution, we had the good fortune to be part of Human Genome Sciences’ gene discovery department. Our challenge was to analyze human samples from all parts of the anatomy, stages of development, and states of disease to find genes being differentially expressed. When an interesting gene was discovered, we needed to find the specific sample in the freezer from which that sequence fragment was derived. Once acquired, our team would begin elucidating the entire gene sequence using a “primer walk” technique. Our success rate, an astonishingly high 98%, hinged on finding the right sample. From this, we learned firsthand the importance of establishing a reliable materials inventory on which to anchor scientific operations.
Towards a Fully Integrated Inventory System
Fully integrated inventory systems (like ERP and MRP systems) provide huge payoffs including detailed cost information, the ability to avoid waste, and reduced production errors. For example, automated request mechanisms allow inventory personnel to fulfill requests following first-to-expire rules which avoid the potential for waste. Links to the company’s accounting system provide insights into inventory and production costs, which is essential for responsible financial management. With an integrated enterprise-wide system, benefits accrue throughout the supply chain. However attractive the payoff is, these systems are challenging and costly to implement leading to situations in which costs may outweigh benefits.
Beyond Paper Records and Excel Spreadsheet for Materials Inventory Management
Sadly, many biopharma companies overlook the importance of inventory management, relying on inefficient methods such as paper records and Excel spreadsheets. Some invest in point solutions that offer marginal improvement over Excel but fail to deliver the integration necessary for effective tracking and tracing. Although fully integrated enterprise-level inventories are preferable, point solutions might be appropriate in some situations.
When to Consider Inventory Point Solutions
Inventory point solutions can be suitable when the inventory is created and consumed locally. For instance, when one group manages a catalog of reagents or supplies that are solely consumed within the same team, an inventory point solution can suffice. When inventories do not span departments, the implementation effort required for a fully integrated enterprise-level system may outweigh the benefits.
Caution with External Inventories
Another scenario where we advise caution is when an inventory is outside the control of the sponsor company. As scientific operations are increasingly outsourced, distributed supply chains are becoming more common. Inventory accuracy relies on high compliance and timely updates. This is a challenge when the inventory resides within your 4 walls. But the challenge is magnified when the inventory resides elsewhere. For this reason, we generally advise against tracking inventory at remote storage locations.
The Significance of Efficient Inventory Management
Implementing effective inventory management practices is crucial for modern businesses. Those who can efficiently and accurately manage their inventories gain a significant competitive advantage. If you found this article informative, stay tuned for future posts where we will delve deeper into emerging trends in the life sciences sector.