The hidden costs of inefficient laboratory testing procurement

Published July 2, 2024

Fanny Törnqvist

Fanny Törnqvist

Growth Lead, Measurlabs

At Measurlabs, we have years of experience in sourcing laboratory tests across various industries. This has given us a unique perspective on the struggle of finding dependable partners who can consistently deliver accurate results to meet diverse testing needs.

After building a network of hundreds of laboratories, comparing thousands of offers, working with more than 700 customers from diverse fields, and thoroughly optimizing our procurement processes, we are now sharing our learnings and insights. This article delves into the hidden costs of inefficient testing procurement, showing how much it really costs your business.

1. The productivity pitfalls of outsourcing tests to multiple laboratories

Discussing one testing project with one lab can take half a day of work time, from clarifying testing requirements to explaining the intricacies of your sample, exchanging a bunch of emails, and jumping on a call to make sure everything goes just right. When several laboratories are added to the mix, the workload increases exponentially, requiring a whole project management system to keep track of the numerous offers, contact persons, and samples bound for different labs.

Now, imagine getting everything from one laboratory service provider instead. You could have all your offers, projects, and reports in just one portal – and communicate with just one person who knows your products by heart. How much precious time could your team save?

2. Searching for new testing laboratories can be a real time-waster

Think of a situation where your R&D team needs a completely new analysis for their latest output. Or worse, where you notice something is off in your process and product quality plummets unexpectedly. Someone in your team needs to find a laboratory that can address the new need, and they will need to do this fast to resolve the issue and get production back on track.

The more challenging your need, the more difficult and time-consuming the search will inevitably get. Explaining the issue and waiting for offers from several labs can easily add up to multiple full working days.

Imagine instead, if you could replace the endless back-and-forth with multiple labs with just one email to a dedicated partner. They would source the right laboratory for you – or immediately make you an offer because they have resolved similar situations before. How big of a relief would that be for your team?

3. The wrong test, the wrong conclusions

A recurring issue we've encountered is that clients often end up buying analyses they don’t need or ones that don’t answer their research questions. This almost always stems from a lack of support from the testing laboratory and leads to either redoing the test with more suitable methods, or worse, drawing false conclusions that might cause trouble down the line.

Unnecessary and suboptimally executed tests are an obvious waste of money, but they can be avoided. When you start working with a partner that offers proactive expert support, you can rest assured that all tests are performed with the most suitable analysis techniques to address your specific research needs.

4. The consequences of delayed results 

A missed deadline on a single test can snowball into much greater losses: your R&D project stalls, market entry or product launch gets delayed, or a large customer chooses another provider. Delays can naturally occur at any laboratory for example when a device breaks down. Still, we have noticed that there are significant differences in the accuracy of turnaround times between laboratories, and working with ones that can stick to their schedules and deliver results quickly really does make a difference. 

In addition, customer service can make a great impact on the harmfulness of the delay. When being informed about it well in advance, you can take any necessary actions to minimize the negative impact of the postponement and adjust your schedules accordingly. 

5. Missed opportunities for bargaining and bulk discounts

As an individual company working with several laboratories, you rarely have large enough sample batches to give you the negotiation power to secure better deals. Large factories and multinationals with high-volume routine analyses might be able to do this, but others usually don’t.

You may also be paying a significant premium for your analyses without even knowing it. We have found that test costs can be up to 5x higher in the most expensive lab compared to the cheapest one. Even if you think you have received a good price from the laboratory you are using, there might be a way to get the same test for half the price from some well-hidden gem.

How much does all this end up costing?

Let’s do the final math. The direct cost of purchasing tests from excessively expensive laboratories and purchasing some unnecessary tests can easily account for 20% of your annual testing spend or more. When adding missed opportunities for negotiating discounts, the possible cost savings you could make grow even more.

Let’s then address the hours wasted on inefficient procurement. Looking at our own most recent 1000 projects, there is a striking difference of using 41% less active work time on those where we involved only one partner laboratory versus several. That means that by getting everything from one provider, you could free up over 4 months of work time per year! In addition to that, we have seen that every time we need to find a laboratory for a new kind of request, that takes around 6 hours of active working time. This means that every time your teams have a new type of analysis need, a full day goes to waste on figuring out who could help you and going back and forth about sample specifications and other details.

Finally, the cost of delayed R&D projects, product launches, and lost customers can add up to weeks or months in lost revenue. This highlights the importance of having a top-tier testing partner who can stick to the schedule, communicate any inconveniences promptly, and help ensure your analyses are performed correctly from the outset.

Fortunately, all these issues can be resolved. 

We have helped countless companies save money, time, and effort on lab testing, freeing resources for more critical projects. Having compounded the analyses of over 900 top laboratories into one service, we can address diverse needs in R&D, regulatory compliance, quality control, and unforeseen troubleshooting situations. By leveraging our know-how and established partnerships, we ensure your samples are always analyzed efficiently and cost-effectively and that you always get the expert support you need.

Are you ready to start optimizing your lab testing procurement? Book a meeting with us already today to see how we can help you: https://measur.pipedrive.com/scheduler/RK21YYFA6/meeting-with-measurlabs

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