Lab Inventory Management: How to Keep Things Organized

In the world of laboratories, precision and efficiency are absolute essentials. Yet, inventory mismanagement remains an Achilles’ heel for many labs, often leading to waste, delays, and costly mistakes.

When 17 public health facilities of the Gambella Regional State were examined for a descriptive cross-sectional study, it was discovered that about 13% of laboratory commodities were being wasted, and the average stockout was 58 days. The cause? Poor laboratory inventory management. 

Many labs wrestle with reduced operational efficiencies and escalating costs because they often overlook inventory management as a key factor. Oversight can lead to repeat or delayed orders, downtime waiting for reagents resulting in delayed experiments or testing, incorrect results due to the use of expired reagents and other consumables, regulatory penalties, and other issues, all of which contribute to significant efficiency losses as well as financial and reputational damages.

This article serves as a comprehensive guide to effective lab inventory management. It explores the challenges and repercussions of poor inventory management, outlines the best practices, and also advises on selecting the right laboratory software for inventory management, should you decide to deploy one. 

What is lab inventory management?

Imagine a lab where inventory records are all haywire. A critical reagent is out of stock just when it is needed, while another has been reordered in copious amounts. Staff members scramble in confusion, looking for a crucial lab reagent, not knowing where it’s kept, leading to frustration and wasted time. 

That’s where lab inventory management comes in. 

It keeps track of all necessary resources, from reagents to samples and consumables, to ensure that everything functions seamlessly. This means tracking the quantity and location of all lab resources so the lab doesn’t run out of resources as and when required. 

While it might often get overlooked, without proper lab inventory management, labs can face bottlenecks, delays, and wastage of resources, all of which can undermine outcomes and productivity.

Let’s look at some challenges and the consequences labs may face without effective lab inventory management.

Lab inventory management: challenges and consequences of ineffective management

So far, we have established that when inventory practices are not in lockstep with operational needs, several challenges can arise. These are, however, short-term implications. In reality, these challenges can have far-reaching consequences. 

In this section, let us go over the challenges briefly and then explore how these challenges impact productivity, working capital, and overall safety in the lab environment.

Inventory management challenges for modern labs

A few challenges of inefficient lab inventory management include:

1. Inventory depletion: If laboratories run out of critical supplies, it can hinder testing, research, and experiments and cause delays.
2. Ineffective data management: Without proper inventory management, maintaining important details such as expiration dates and storage conditions becomes challenging. Apart from improper storage, which can hamper experiments, the inability to manage data can affect procurement planning and regulatory compliance.
3. Manual errors and time drain: Manual inventory tracking causes errors and time wastage. Errors such as incorrect labeling can result in costly mistakes.

These issues have significant consequences:

Consequences of ineffective lab inventory management

1. Effect on working capital: Inventory accounts for a considerable share of working capital. With ineffective inventory management, capital gets locked in inventory, preventing it from being used for other critical tasks. Effective inventory management frees up cash flow so that funds can be used optimally in the lab.
2. Delays: Not knowing where different lab supplies are stored in the lab, researchers and lab personnel may end up wasting time searching for chemicals and reagents. The chaos might eventually lead them to place orders for supplies instead of wasting time looking for them. This results in duplicate orders and delays. These delays can sometimes be significant and cause the lab to fail to deliver test reports or certificates of analysis (COA) on time.
3. Unsafe working conditions: Without proper and accessible records, labs may end up storing expired or hazardous chemicals, leading to unsafe working environments and non-compliant conditions. Effective lab inventory management is paramount for maintaining a safe and compliant lab.

To overcome these challenges, labs can adopt these proven practices for effective inventory management.

Best practices for lab inventory management

In line with the famous policy paradox, "When you do it right, nothing happens," the importance of effective inventory management often goes unnoticed until something goes wrong. The success of laboratory management lies in its unobtrusiveness. When inventory management is seamless, staff can focus on their core work without interruption.

Lab inventory management best practices that can help labs save time and money, thus enhancing productivity, include:

Labeling

First and foremost, you need to label your inventory. Put in place a system that is easy to use and prevents misplacement. You should label not just the inventory but also racks, shelves, and drawers. This makes it easy to locate items. Grouping your lab inventory is also an important part of labeling. You may categorize the inventory according to the use of items.

For instance, you can create a group for all glassware and another one for all chemicals; among the chemicals, you may store the items according to their hazard level, separating flammable items from oxidizing agents.   

It is also important to take stock of what you already have in your lab. This helps you identify the supplies and chemicals you don’t need to replenish or restock. 

Identifying your stock needs

Create a list of all required items and record the frequency of ordering each of these items. This way, you can identify the items that you do not need often and the ones that you need more of. 

Monitoring your inventory

You need to plan and schedule regular inventory audits to identify what you need and what you have in excess. Make use of the detailed inventory list and check the lab items against it. This also enables you to check the condition of lab items. 

Establishing thresholds and tracking usage patterns

It is also important to set minimum and maximum stock levels for each item on the list to determine the amount below which your lab cannot operate and the amount above which you would be overstocking.

Additionally, you can track usage patterns for each item by recording and maintaining the purpose, date of ordering, and quantity ordered for each item. With these trends, you can identify any waste and make informed decisions for future inventory purchases.

Creating and maintaining inventory protocols

Statements of purpose (SOP) for inventory management tasks help ensure everybody in the lab follows consistent guidelines for each procedure, reducing the risk of errors. These SOPs could be for every activity, from receiving inventory to storing and disposing of it.

Using lab inventory management software

A lab inventory management software can automate important tasks and reduce the risk of manual error. It also enhances efficiency so that staff can focus on their day-to-day work without worrying about running out of reagents or failing to track expiration dates. Many laboratory information management systems (LIMS) have an inventory management module that can track inventory levels and expiration dates, issue alerts when inventory levels are running low, and also streamline the ordering process by generating purchase orders. 

Source: CloudLIMS

Managing lab inventory with LIMS: benefits and what to look for

Modern labs increasingly turn to automation through LIMS to overcome traditional inventory management hurdles. With LIMS automation, a lab, clinical or analytical, can operate smoothly and efficiently, streamlining workflows and preventing disruptions before they arise. Here are the various advantages of using a LIMS or a lab inventory management system.

Source: CloudLIMS

• Complete inventory visibility: With a lab inventory management system, lab personnel can have enhanced visibility of inventory usage, patterns, expiration dates, and more. A LIMS can also enable lab managers to make informed procurement decisions with the help of inventory trend analysis and visualization dashboards.

• Efficient procurement process: Procurement has several phases. A lab inventory management solution can automate these, preventing capital from getting locked up in inventory piling. This includes automating the requisition process and vendor management, among other things. Moreover, integrating a LIMS with the vendor or supplier’s systems can enable real-time inventory restocking, thus significantly reducing the lead time.

• Seamless inventory tracking: While manual inventory tracking is prone to errors and adds to labor costs, a lab inventory management system enhances accuracy in data capture with barcode labeling. Lab personnel can also set alerts for items approaching a minimum threshold or nearing the expiration date. 

• Reduced wastage: With efficient inventory tracking, a lab inventory management solution helps reduce wastage due to expired or spoiled inventory. Proactive tracking also helps reduce wastage due to overordering, helping in working capital management.

• Enhanced compliance: Labs are governed by stringent regulations and standards. For example, according to the Occupational Safety and Health Administration (OSHA) guidelines, labs are required to maintain safety data sheets (SDS) for hazardous chemicals. Similarly, the U.S. Food and Drug Administration (FDA) requires labs handling pharmaceuticals, medical devices, and human sample testing to label and track inventory and maintain documentation to ensure that items are safe and of good quality. A lab inventory management solution uses audit trails to ensure compliance. 

• Effective collaboration: In large labs with several departments and teams, communicating inventory needs, managing procurement, and maintaining inventory data across departments manually is challenging and can easily lead to inconsistencies. With real-time notifications, a LIMS prevents this and helps align all stakeholders, keeping them informed, thus enhancing collaboration. 

• Continuous improvement: With features for performance monitoring and quality management, a lab inventory system can help lab managers identify gaps in operations and plan suitable interventions to improve efficiency across the board, thus driving continuous improvement.

Key questions to ask while evaluating software solutions for managing your laboratory inventory

It's clear that lab inventory management software can significantly simplify and improve inventory management, reducing waste, minimizing losses, and enhancing productivity. However, selecting the right LIMS for your lab is no cakewalk. With several inventory management systems on the market, you must choose one that is right for your lab's unique needs. 

You need to approach the selection process with a clear understanding of your lab’s challenges and requirements. Here are some questions to ask yourself while evaluating software solutions for managing your lab inventory.

• Does the software system you are considering meet your inventory needs?
• Can the software reduce reliance on manual management methods and automate key processes, such as barcode generation and label printing for inventory items, automatic deduction of inventory quantities based on usage, flagging expired items to prevent their accidental usage, and ordering low-stock inventory items?
• Is the software easy to use and remotely accessible?
• Does the vendor understand your inventory management challenges?
• Does the potential return on investment (ROI) of the software justify the cost of the software you are evaluating?
• Are the personnel who will be using the software, such as lab technicians, lab managers, and researchers, among others, on board with the decision to implement it?
• How well does the software integrate with other systems and processes in your lab?
• Does the software you are evaluating meet your long-term inventory management requirements? Is the software sufficiently scalable and flexible?
• Does the vendor have a strong technical support team to help you fix run-time issues should you encounter them?

Essential features to consider when choosing software for lab inventory management

A LIMS acts as a centralized data repository that not only manages lab operations but also automates workflows.

To fully realize the benefits of a LIMS for inventory management, it is essential to determine the features that best support your laboratory’s needs. Here are the key features any lab must consider: 

Monitoring reagent expiration dates and reagent lots

When tests or experiments generate unexpected results, the first thing to check is whether the reagents used were expired or if there were issues with the reagent lot. This is impossible to do if reagent expiration dates or lots are not tracked. A LIMS should make it easy to query samples; hence, if a reagent lot is detected to have contamination, it should be easy to find all the samples tested with that reagent. Furthermore, a good LIMS should also flag expired reagents and vendors who provide poor-quality supplies, ensuring that no lab member orders from them in the future. This is crucial for quality assurance. 

Calculating reagent usage

One of the most important features of a LIMS is tracking and maintaining a record of the usage of reagents in a lab and calculating the number of times it can be used further. For this to function, it should first and foremost allow you to define a ‘single-use’ for every reagent so you can track how many times it can be used or the number of uses remaining. A robust LIMS should also alert you to reorder reagents when required. 

Maintaining a record of reagent locations

A modern LIMS should maintain details about the storage location of reagents in a lab. This saves significant time and prevents confusion among lab personnel. A LIMS should be able to store reagent details such as the barcode on reagent containers, the storage boxes of reagents, the location of the boxes, and the required storage conditions of reagents. 

Keeping track of the number of freeze and thaw cycles of reagents

Just like reagent expiry, it’s critical to keep a tab on the number of freeze and thaw cycles a reagent has undergone since this affects the integrity and quality of reagents. Certain reagents can undergo a specific number of freezes and thaws. A LIMS should easily capture these details and help discard the reagents as soon as they reach their freeze or thaw threshold. 

Tracking reagent ingredients

Many times, reagents are prepared in the lab. In these cases, it becomes essential to maintain details of each ingredient used to prepare a reagent. A LIMS should be able to capture and maintain a record of the parent-child hierarchy, where the parent is the prepared reagent, and children are each of the ingredients used to prepare the parent reagent.  

Keeping track of reagent invoices

Let’s face it: as lab personnel, manually managing administrative tasks such as tracking quotes and invoices from suppliers can consume valuable time and limit the focus on essential lab work. A good LIMS should take away this burden by efficiently managing quotes and invoices for all vendors. By acting as a central repository for these documents, you are not left scrambling for details such as discounts on reagents or any disagreements you may have had with suppliers.

Source: CloudLIMS

Future-proofing lab operations with inventory management

In a nutshell, lab inventory management cannot be an afterthought when it comes to lab management. Poor inventory practices can lead to stockouts, wasted resources, and compromised outcomes, all of which can have serious repercussions on a lab’s productivity, compliance, and reputation. Implementing best practices for lab inventory management and automating it with the help of a LIMS can help avoid costly mistakes and significantly enhance lab performance.

It is time for labs to push out the older language of manual lab inventory management and embrace automation to not just innovate their way into competitiveness but also efficiently manage their day-to-day tasks.

Don't let inventory challenges hold you back. Start improving with these six techniques!

Edited by Supanna Das