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Monday, October 31, 2016

Lab Management Trends: Procurement

The quality control laboratories in manufacturing environments are continuing to evolve. Most of us can remember the typical QC lab:

  • Purchased instruments
  • Full-time employees to operate instruments
  • Employees calibrated and maintained the instruments
  • Each test was performed on dedicated instruments
  • Data was logged in a physical book
  • Physical data book was rarely looked at (usually only when a customer complaint was being reviewed)
So many of these old ways of doing things have changed or have totally disappeared over the last 10-20 years.

Equipment Procurement
Laboratory equipment was always purchased 20 years ago. Wow, how that has changed. Nearly every discussion with a customer involves payment and financing options. Everything from buying equipment outright to leases and rental and even payment per test have been discussed.


Choice of procurement models for lab equipment varies with different factors. Understanding these factors helps in deciding whether to own the equipment, which in turn helps in choosing the right procurement model. A preferred procurement model and the rationale behind it at different scenarios are given below.


















A. Need for maintenance services:

  • Customized services are necessary for end users who are into research and development in order to carry out their operations to the desired specifications.
  • If the equipment needs a high degree of maintenance services, buying or capital leasing is preferred, as these options offer not only standard but also customized maintenance services. An operational lease doesn’t usually offer customized maintenance services, as the equipment will be returned to the lessor after the lease term.
  • As the service contracts in renting are high-priced and the equipment is being used by many people, it is advisable to obtain equipment that requires less maintenance.

B. Tenure of equipment usage:

  • If the expected usage of the equipment is more than three years and its frequency of usage is high, acquisition either by capital lease or buying is suggested, provided the need to upgrade the equipment is low.
  • If the expected usage of the equipment is less than three years and ownership is not desired, acquisition through an operational lease is suggested.
  • A rental option is preferred if the equipment will be used for a short term and its frequency of usage is low.

C. Need to upgrade:

  • Regulations and technology developments will require upgrading lab equipment regularly. High-end equipment that involves high technology is subjected to a high rate of change in technology, which results in regular upgrades.
  • It is preferable to acquire equipment with a low to moderate need for upgrades through buying or capital lease, as acquiring equipment with high upgrade requirements could result in owning obsolete equipment.
  • It is preferable to procure equipment associated with frequent technological changes and frequent upgrades under operational lease, as it avoids owning obsolete equipment.
  • Operational leasing is suitable for all types of users irrespective of the industry or size of the company when the technology is changing frequently and there is a need for constant upgrading of the equipment.

D. Frequency of usage:

  • It is preferable to acquire equipment for medium to high frequency of usage through buying or leasing, as return on equipment is high because the cost of the equipment is spread over the years of usage.
  • Renting is preferred for equipment that is used less frequently or by ad-hoc requests. Acquiring equipment for temporary usage through buying or leasing incurs more cost and less return.
  • If equipment is going to be used very infrequently, paying for testing by the manufacturer or a testing lab has become an option.
Other topics in blog posts:

  • Automated Testing
  • Data Management
  • Outsourcing

Contact me with other blog ideas.