Content

• Steps
• Warnings

Most laboratories must operate on a tight budget in order to either maximize revenue or conserve valuable resources.If you have been assigned in charge of a laboratory or are managing its budget, here are some steps to help you reduce the cost of running your laboratory.

Steps

1. 1 Control laboratory costs. Keep an accurate journal and ledger, recording every expense such as wages, materials, equipment, overheads, services, personal expenses, fees, fines. Proper accounting of laboratory costs will support efforts to implement cost reduction strategies. Efforts to reduce costs are likely to result in large savings.
2. 2 Determine which costs are volume dependent and which are independent of volume. Volume-related costs are those that are proportional to the volume of laboratory work. For example, materials expended are usually volumetric because the higher the laboratory workload, the more supplies of materials will be needed, hence the cost of such supplies will tend to increase with income. Volume-independent costs, on the other hand, are fixed costs regardless of the laboratory's volume of work. For example, overhead costs like rent are fixed costs.
3. 3 Determine the cost of one operation. It can be calculated by adding all the costs associated with a given transaction and dividing by the number of transactions performed in a given period of time. Effective cost reduction strategies should seek to reduce the cost per transaction.
4. 4 Determine the income or remuneration for one specific operation. It can be calculated by adding all the income or remuneration received from a particular transaction and dividing by the number of transactions in a given period of time.
5. 5 Limit the number of unproductive tests. By comparing the cost per transaction with the income or reward from the transaction for various transactions, it becomes apparent which transactions are profitable and which are wasting laboratory resources. The number of unproductive tests and operations should be limited.
6. 6 Discuss the principles of proper laboratory use with all staff and laboratory technicians. Make sure everyone understands when certain tests and operations are performed and that all conditions for sample submission, handling, processing and reporting of results are followed. Eliminating unnecessary tests and procedures will save money.
7. 7 Provide all laboratory workers with information on any changes in working standards. Discuss these changes during morning meetings, group meetings, and annual training, and post the changes on the notice board. Following all protocols will help reduce unnecessary costs.
8. 8 Try to manage tests together and coordinate all operations whenever possible. If multiple samples are sent at the same time for the same test, combining them together will produce the same result as running each test separately, but at a significantly lower cost. Saving time and resources will reduce costs.
9. 9 Order materials in bulk to save money if materials do not deteriorate. For supplies that are about to expire, calculate the material turnover (cost of sales divided by the cost of materials) and make sure the time to expiration / obsolescence is significantly longer than the time implied by the material flow.
10. 10 Look for ways to manage tests or operations more efficiently. For example, if a new machine can handle twice the number of samples in a shorter time, it can reduce the cost per operation and save money. Before choosing new equipment that can do the job better, consider the initial cost of the tool, reagent cost, the cost of training technicians to use the new machine, depreciation, etc. and compare these costs with the amount of cost savings they contribute.
11. 11 Determine which tests you need to do yourself and which ones to send to a third-party laboratory. Consider all costs associated with a specific test or operation, including the cost of QC testing, material costs, proficiency testing and training costs, time to store results, and postage or shipping costs. If a test that requires specialized technical skills or equipment is rarely needed, you can reduce costs by sending it to a third-party laboratory instead of doing it yourself. On the other hand, tests that are frequently performed, or those that require a quick turnaround time, may be better performed in our own laboratory.
12. 12 Monitor the effect of any cost reduction strategy over time. Be patient, as the effects of these strategies can take months or years to manifest. An effective cost-cutting strategy is to lower the cost per operation or the revenue-to-cost ratio of the laboratory.

Warnings

• Sometimes what appears to be an expensive operation can actually be cost effective; the reduction in future costs can recoup the initial cost of an apparently expensive test or operation. Always keep the cost / benefit ratio in mind.