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    Lab Procurement Made Easy with Lab Procurement Software

    Lab Procurement Made Easy: Why You Need Procurement Software

    by martieLast Updated : Sep-04-2023

    Drug development involves many complex steps; Lab procurement should not be one of them. If you struggle with managing purchase orders in spreadsheets, then lab procurement software can help.

    If you have a lab and you are purchasing equipment and supplies from different vendors, you are probably experiencing the following:

    1. You spend too much time tracking down purchase orders, whether approved, placed with the order, or shipped by the vendor.
    2. Scientists are creating duplicate purchase orders because multiple people are ordering similar items, and the team has no visibility on what is already on order.
    3. Finance teams constantly notify you to provide packaging slips so that they can process the invoices.

    If you are experiencing any of the above and struggle with too much cost of lab inventory, this article is for you.

    In this article, we will cover:

    • How lab procurement software can help you manage your purchasing and your featured inventory better.
    • How can you track inventory through inventory control processes and ensure no duplicate orders are placed?
    • How can you easily let the finance team know that the product has been received and is okay to pay the supplier through streamlined inventory management processes?
    • How do you maintain inventory visibility that syncs with your physical inventories?

    Let’s get started.

    If you’re looking for a lab procurement management solution to support you with purchasing your equipment and supplies more efficiently, our automation solutions might just be what you’re looking for. We have a team of product specialists who can walk you through our tool ProcureDesk so you can understand how you can leverage its features to support your company’s procurement. See it in action today!

     

    What Is Lab Procurement Software?

    A lab procurement software is a purchasing system that automates the purchasing process for lab equipment and supplies.

    This lab inventory management system empowers lab personnel to effortlessly manage the entire procurement lifecycle, from requisition to purchase order and receipt of supplies. It offers real-time visibility into inventory levels, vendor information, and pricing, enabling informed decisions that align with research objectives and budget constraints. Furthermore, lab procurement software often integrates with existing systems, enhancing collaboration and reducing the risk of errors.

    What lab procurement software, you can achieve the following:

    • Automate a manual purchasing process and eliminate spreadsheets for tracking purchase orders.
    • Reduce the number of change orders because the pricing is always correct and not what you used 6 months ago.
    • Reduce the time spent on providing supporting documents to finance.
    • Get instant visibility into total Spend across different departments and vendors.

     

    Related: Biotech Procurement Software – Navigating Biotech Procurement Challenges

    What Is Lab Procurement?

    Lab procurement is the steps followed by the scientist and other research members to purchase equipment and supplies for the lab.

    This cloud-based solution typically involves the following steps:

    • Needs Identification and Requisition Creation: Lab staff identify required items and create purchase requisitions with details.
    • Review and Approval: Requisitions are reviewed and approved, considering budget and necessity.
    • Vendor Selection and PO Generation: Vendors are chosen based on criteria like quality and price, and purchase orders (POs) are generated.
    • Goods Receipt and Inspection: Received items are inspected for conformity to specifications and quality.
    • Invoice Processing and Payment: Invoices are verified against orders and goods received before processing payment.

     

    Challenges With Lab Procurement

    We have worked with many life sciences and biotech companies, and here are the top challenges that we see with the lab procurement process that does not have a streamlined procurement solution:

    Manual Procurement Processes

    The manual purchase approval process is often rooted in the traditional organizational structure, where decisions require input and authorization from multiple departments or individuals.

    As a result, the procurement process can become convoluted and time-consuming. Streamlined approvals are often communicated through emails, paper forms, or in-person meetings, leading to potential miscommunication, delays, and administrative overhead.

    Wrong Pricing Or Part Information

    The challenge of incorrect pricing or part information stems from the lack of a unified and updated system for product catalog management.

    When there is no centralized repository for accurate product specifications, vendors may provide inconsistent information or outdated pricing.

    Moreover, manual data entry and communication can introduce errors, further complicating the procurement process that does not leverage an all-in-one procurement software.

    Related: Don’t have a purchasing policy? Unlocking The Potential Of Biotech AP Automation

    Manual Order Tracking

    Manual tracking of orders results from fragmented communication and inadequate visibility into the supply chain.

    When labs deal with numerous suppliers without streamlining the entire procurement process, each with its timeline and method of communication, tracking the progress of orders becomes a complex task.

    Without real-time updates on order statuses, laboratories are vulnerable to disruptions in research schedules and resource allocation.

     

    Key Features Of Lab Procurement Software

    Now, let’s talk about the key features of lab procurement software

    Purchase Requisitions

    Purchase requisitions are the first step in the procurement process. A scientist submits a request for purchase using a web form or email.

    The purchase request is approved, and a lab manager or accounting team creates the purchase order and sends it to the vendor.

    There are two challenges with this process:

    1. Scientists must review different websites, copy the data into a spreadsheet, and then submit it for approval. This is time time-consuming process and wastes valuable research time.
    2. The approvals are manual, which means constant back and forth with managers to approve a request.

    A lab procurement software like ProcureDesk solves both of these problems.

    Let’s see how a purchase request process is automated using procurement software.

    First, there is no need to copy data from multiple websites and put that in a spreadsheet.

    All you need to do is log in to your procurement system and click on the vendor’s logo.

    The system takes you to the vendor’s website. You are already authenticated, so the vendor’s website has your details, including special pricing.

    All you have to do is select your purchase, add it to the cart, and click a button to return the data to your procurement system.

    Here is an example of how it looks:

    Fisher Punchout

     

    The data is automatically sent back to the procurement system, and a requisition is created for you.

    There is no need to copy any data manually.

    You can, of course, add products or services from different vendors in the same request.

    Here is a sample request:

    Fisher_punchout_procuredesk_cart

     

    Now, there are cases where a vendor doesn’t have a website. In that case, you create a catalog from which you can easily select the items for purchase.

    Here is an example of that:

    Internal_catalog

    And if there is no catalog, let’s say one-time purchase – you can enter the data directly into the request.

    Purchase requests are super easy with lab procurement software.

    Approvals

    The other challenge with requisitions is approvals. There are two problems with approvals:

    1. Scientists don’t know the correct approval process; they always need to ask who should approve this because the amount could differ.
    2. The managers take a long time to approve because they are inundated with emails, and your approval request falls through the cracks.

    Lab procurement software solves both of these problems for common lab environments. Here is how:

    First, the approvals are generated automatically based on a predefined set of rules. Your lab manager or finance team can define the approval rules in the system.

    Once the approvals are set up, the all-in-one inventory management software does the rest and automatically creates the approvals for you.

    The most common scenarios for approvals are based on the approval amount, chart of accounts, department, and so on. No matter what your workflow is, most purchasing systems should easily accommodate that.

    Here is how approvals are generated in ProcureDesk:

    The requesters can easily see who will approve their request before submitting it for approval.

    Next is the problem of approval requests falling through the cracks.

    This is solved in two ways:

    • Multi-channel approval process: Providing a multi-channel approval process allows approvers to approve using their preferred approach. For example, ProcureDesk allows approvers to approve purchase requests through a mobile app, Slack, email, and web app.
    • Automatic Reminders: Second, the system sends automatic reminders to the approvers to approve timely requests. Imagine your approvers getting a summarized email every morning so they don’t miss what is in their queue.

    Here is an example of approvals using the mobile app.

    Mobile app for approvals

    Mobile app for approvals

    Budgets

    Finance teams are always concerned about budgets and ensuring that teams don’t go over budget.

    There are two challenges that the teams face:

    1. There is no way to proactively check for budgets before making the purchase. They only know that they are over budget after the purchase is made.
    2. Department or budget owners don’t have visibility into budgets and only review budgets during quarterly review meetings.

    These challenges are solved using procurement software.

    Here is how it is done:

    The finance team configures the budget in the system, or the system can import the budget from your accounting system.

    When creating the purchase request, the requester is asked to select the budget or the budget can be automatically assigned based on the chart of accounts.

    Here is how it works in ProcureDesk:

    budget_usage_summary

    If no budget is available, finance teams can configure controls on what to do. Here are your options:

    • Block the purchase from happening. Show the user a warning that there is no budget available.
    • Show a warning but allow the user to proceed if they are over budget within a certain threshold.
    • Send the request for additional approvals.

    Now that you have budget availability – the requester can proceed with the approvals.

    The lab manager or CSO(Chief Science Officer) approving the purchase can easily see the budget available at the time of approval.

    Here is what it looks like:

    Approver view of the budgets

     

    Automated Purchase Order Generation

    A challenge with manual purchase orders is that you must create and send purchase orders to the vendors.

    Imagine if you don’t have to create a purchase order in a spreadsheet, print it out, and send it to the vendor. How much time will that save?

    That is where lab procurement software can help reduce the time spent processing purchase orders.

    When a purchase request is approved, the system automatically generates the purchase order and sends it to the vendor.

    Depending on the vendor’s capabilities, you can send the purchase order electronically or through email.

    Most procurement systems punch out orders, making sending and tracking purchase orders easier.

    It also makes it easier for the vendor to receive the purchase order.

    Here is an example of a purchase order:

     

    Automated Order Tracking

    Do you feel that the purchase orders are going into a black hole after you send the purchase order

    to the vendor?

    Do you have to continuously follow up with the vendor to track the status of the purchase order?

    If you said yes to any of the above questions, then lab procurement software with tracking capabilities can help.

    Here are a couple of scenarios where an order tracking capabilities can help you:

    Order Acknowledgement

    With order acknowledgment, you can ensure the vendor has received the purchase order, and it allows the vendor to provide specific details about what line items they can ship, what are back-ordered, and what are the expected delivery dates.

    This allows you to stay on top of deliveries and manage expectations for your stakeholders accordingly.

    Here is an example of an order acknowledgment from the vendor:

    order_acknowledgement

    Purchase order acknowledgmentHere, you can see the promised ship dates and the shipping lines on what dates.

     

    ASN (Advance Shipping Notice)

    Do you want to be notified when the vendor ships the product?

    Do you want to track the exact status of where your product is?

    This is where an ASN can help. The vendor sends An advance shipping notice to the buyer when the product is shipped. This generally contains the tracking number and what items are being shipped.

    Here is an example of that:

    Advance shipping notice

    With a system like ProcureDesk, you can automatically receive these notifications from vendors, and you don’t have to keep track of this in a spreadsheet manually.

    Once the tracking information is received, the system automatically tracks the delivery information and informs the lab team.

    Inventory Management

    Worried about running out of lab supplies?

    Or you might be concerned about bulging inventory because you carry too much in stock.

    In either case, an inventory management system can help. ProcureDesk lab procurement system has an inventory module that helps you with the following:

    • Maintain Optimized Stock Levels: The system helps labs maintain optimal stock levels by tracking the usage patterns of various materials and chemicals. This reduces instances of overstocking or stockouts, ensuring that the laboratory operations remain uninterrupted.
    • Automated Reorder Triggers: With ProcureDesk, labs can set up automated reorder points for essential items. When stock levels dip below a certain threshold, the system can send a reorder alert or automatically place an order, ensuring timely replenishments.
    • Enhanced Visibility and Traceability: The system provides a transparent view of inventory levels, batch numbers, and expiry dates. This is crucial for labs to ensure the use of non-expired reagents and trace any issues back to specific batches.
    • Reduction in Wastage: By monitoring the shelf life of perishable items and chemicals, ProcureDesk helps labs use materials efficiently, minimizing wastage due to expiration.
    • Reporting & Analytics: The system offers comprehensive analytics on inventory usage, helping labs identify trends, anticipate future needs, and make informed purchasing decisions. This not only ensures cost efficiency but also assists in better research planning.

    Here is an overview of the inventory in ProcureDesk:

    ProcureDesk Inventory Module

    3-way Matching

    Biotech finance teams and scientists often grapple with the intricacies of managing a seamless procurement process.

    One key challenge they face is ensuring that purchase orders, goods received, and invoices align perfectly. This 3-way matching process, when done manually, is not only time-consuming but also prone to human error.

    Moreover, the need to store physical packaging information for record-keeping and verification purposes can further clutter already crowded lab spaces and create organizational inefficiencies.

    ProcureDesk’s 3-way matching process offers a robust solution to these pain points.

    Automating the verification of purchase orders, receipts of goods, and invoices minimizes discrepancies and manual oversight.

    For biotech finance teams, this means a streamlined workflow, reduced chances of financial errors, and timely vendor payments. For scientists, automation translates to an efficient use of resources, as there’s no need to retain and sift through physical packaging details.

    Here is what you can expect from a procurement management software solutions:

    1. Streamlined and automated 3-way matching, eliminating manual errors and reducing operational delays.
    2. No need to store physical packaging information, declutter lab spaces, and save valuable time.
    3. Enhancing collaboration between finance teams and scientists ensures both parties can focus on their core responsibilities efficiently.

    Here is an example of an automated 3-way match process in ProcureDesk:

    Invoice_matching_Dashboard_ProcureDesk

    Dashboard: Invoice matching

    Integration With The Accounting Software

    Without integrating with your accounting system, you must create the same invoice in two different systems. This is time-consuming and frustrating for many teams.

    With integrated lab procurement software, the data is automatically synced between the procurement software and your accounting system.

    Once the invoice is approved for payment after the 3-way match process, the invoice is automatically created in your accounting system along with the actual invoice document.

    Keeping master data like the Chart of Accounts and supplier information consistent across platforms can be daunting. The system automates this synchronization.

    Whenever there’s an update or change in the Chart of Accounts or supplier data in the accounting system, ProcureDesk automatically reflects these changes in real time. This ensures that the AP teams always work with the most up-to-date information, further streamlining operations and reducing discrepancies.

     

    Learn how our lab procurement tool ProcureDesk can help you leverage your purchasing process even better. See it in action today!

    Benefits Of Using Lab Inventory Management Software

    So, how do you justify investment in lab procurement software? Here are some key benefits:

    Seamlessly Streamlined Workflows

    Measurement: Time Saved on Administrative Tasks

    Lab procurement software automates administrative tasks. The software drastically reduces manual intervention by automating purchase requisitions, approval workflows, and order generation, leading to significant time savings.

    How to Measure:

    Calculate the average time spent on administrative tasks related to procurement before and after implementing the software. This includes time spent on filling out forms, seeking approvals, and processing orders. Multiply the time saved per procurement cycle by the number of procurement cycles within a specified time frame.

     

    Enhanced Accuracy And Data Integrity

    Measurement: Error Reduction Rate

    The software’s centralized catalog management ensures that accurate product information is readily available, mitigating the risks of wrong pricing or part specifications. This enhancement in data accuracy minimizes confusion, errors, and costly discrepancies.

    How to Measure:

    Compare the number of errors related to incorrect pricing or part information before and after adopting the software. Calculate the percentage reduction in errors to quantify the improvement in data integrity.

     

    Real-time Order Tracking And Visibility

    Measurement: Reduced Downtime Due to Order Delays

    Real-time order tracking provides enhanced visibility into the progress of orders, minimizing downtime caused by delivery delays and disruptions to research schedules.

    How to Measure:

    Assess the average downtime experienced due to order delays before the software implementation and compare it to the downtime after implementing the software. This comparison yields a clear quantitative measure of the reduction in disruptions.

     

    Comprehensive Vendor Management

    Measurement: Vendor Performance Improvement

    Efficient vendor management tools facilitate collaboration and enable data-driven decisions. Improved vendor performance translates to reliable deliveries and enhanced product quality.

    How to Measure:

    Evaluate key vendor performance metrics such as on-time delivery rates and product quality before and after using the software. Calculate the percentage improvement in these metrics to demonstrate the software’s impact on vendor management.

    By measuring these benefits using specific metrics and calculations, you can showcase the tangible impact of lab procurement software on your laboratory’s operations. When paired with qualitative feedback from scientists and lab managers, this quantitative analysis paints a comprehensive picture of the software’s value proposition and its potential to revolutionize your procurement processes.

    Related: PO System For Life Sciences Companies

    How To Select Lab Procurement Software?

    Ready to move forward with selecting a lab procurement system? Here are the recommended next steps:

    • Define Specific Needs: Identify precise requirements like punchout capabilities, automated order tracking, and integration with accounting systems.
    • Research and Shortlist: Explore providers aligned with your needs, creating a shortlist of potential solutions.
    • Evaluate Features: Compare shortlisted options for key features such as approval workflows, order tracking, and catalog management.
    • Request Demos: Experience software functionality through demos or trials to assess user-friendliness.
    • ROI Analysis and Decision: Estimate ROI based on time and cost savings, involving stakeholders to make an informed choice.

    By focusing on these five steps, you can efficiently select lab procurement software that optimizes processes and productivity while aligning with your laboratory’s specific requirements.

     

    The Bottomline

    Buying supplies and tools quickly and correctly in today’s labs is crucial. Lab procurement software helps make this buying process smooth and mistake-free.

    Labs can save time and reduce errors by using tech to help with matching orders and payments. These programs can also talk to other systems, like accounting software, which means less manual work and fewer mistakes.

    As labs grow and change, having good software to manage purchases will become even more important. In short, lab procurement software helps labs focus on their main job: doing great research and making discoveries. And above all, it brings labs a better ecosystem for purchasing needs.

    What you should do now

    Whenever you’re ready… here are 4 ways we can help you scale your purchasing and Accounts payable process.

    1. Claim your Free Strategy Session. If you’d like to work with us to implement a process to control spending, and spend less time matching invoices, claim your Free Strategy Session. One of our process experts will understand your current purchasing situation and then suggest practical strategies to reduce the purchase order approval cycle.
    2. If you’d like to know the maturity of your purchasing process, download our purchasing process grader and identify exactly what you should be working on next to improve your purchasing and AP process.
    3. If you’d like to enhance your knowledge about the purchasing process, check out our blog or Resources section.
    4. If you know another professional who’d enjoy reading this page, share it with them via email, Linkedin, Twitter.
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