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If you had to reduce your budget by 10% what would you look at to try and achieve this?. Kirsten McKay 22 nd October 2009 Laboratory Management Session. Laboratory Budget. Costs for typical laboratory Ideas for reducing costs Ideas for increasing income. Overheads.

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if you had to reduce your budget by 10 what would you look at to try and achieve this

If you had to reduce your budget by 10% what would you look at to try and achieve this?

Kirsten McKay

22nd October 2009

Laboratory Management Session

laboratory budget
Laboratory Budget
  • Costs for typical laboratory
  • Ideas for reducing costs
  • Ideas for increasing income
  • All departments will pay a fixed amount for ‘rent’ of the building where it is based and for communal services
    • Management, library, IT, human resources
  • Utility bills
    • Electricity and Water usually
    • Waste disposal
staff salaries
Staff salaries
  • Staff salaries make up the major cost for any regional genetics laboratory.
    • Usually a mix of AfC bands with the majority of staff being Band 5-7, fewer senior scientists at Band 8a-d or 9 and a few support staff being Band 1-4
    • Cost of salaries increases yearly with AfC increment stages.
training meetings and conferences
Training, meetings and conferences
  • External training courses
    • Trainee meetings
    • Training for trainers/bioinformatics
    • ABI training
  • Meetings
    • Best practice meetings
  • Conferences
  • Fast-moving field; technology is moving even faster
  • New equipment is purchased every year
    • Phospho-imaging equipment
  • Old equipment has to be replaced
    • New PCR machine
  • Often require large amounts of money up front
    • Phospho-imager = £17,000
    • PCR machine = £14,000
service and maintenance
Service and Maintenance
  • Service contracts for important pieces of equipment
    • Can be very expensive
    • May include warrantee, routine servicing, repair and parts, emergency call-out
    • Pipette clinic, PCR machines and sequences, biological safety cabinets and extraction machines, software upgrades
  • Replacement of broken pipettes, flasks, gel tanks, chairs, benches, printers, microwaves, fridges, etc etc etc
  • Lab consumables
    • Tips, tubes, plates, seals, clingfilm, paper towels, gloves
    • Primers, enzymes, kits, solutions, chemicals
  • Office consumables
    • Paper, printer supplies, pens, paper clips, plastic wallets, folders
other costs
Other costs
  • Subscriptions to journals
  • Fees for EQA schemes
    • Required under CPA regulations
  • Crimimal records checks and travelling expenses for candidates
  • etc
ideas for reducing costs 1
Ideas for reducing costs 1
  • Restrict department working to core hours
  • Switch off non-essential equipment
    • Reduce utility bills
    • Reduce staff working at 1.5x hourly rate
    • If overtime is routinely required consider employing another member of staff and pay them at 1x rate
    • Reduces capacity for flexible working
    • Reduces ability to cope with busy periods or urgent work
ideas for reducing costs 2
Ideas for reducing costs 2
  • Perform a workforce skills-mix analysis
    • Are highly trained staff performing duties that a less qualified member of staff could do?
    • If so, when replacing staff, replace with less qualified and cheaper employees
    • Need to wait for people to leave voluntarily or temporary contracts to end
ideas for reducing costs 3
Ideas for reducing costs 3
  • Perform an analysis of job roles
    • Are some members of staff more busy than others?
    • If so, consider more flexible job roles and working between sections
    • Allow competent and enthusiastic staff members to take on additional responsibilities
    • May not need additional member of staff as previously thought
    • Staff may resent taking on more responsibility without pay increase
ideas for reducing costs 4
Ideas for reducing costs 4
  • Consider automation
    • Are staff performing time-consuming labour-intensive duties that may be performed by a machine or software?
    • Extractions, Robots, Mutation Surveyor, Alamut
    • Machines take up lots of space
    • Expensive and with additional servicing costs
ideas for reducing costs 5
Ideas for reducing costs 5
  • Evaluate processes and encourage streamlining
    • Lean management concepts
    • Do not duplicate work, instead perform once well!
    • Define common tasks that could be combined and performed by fewer employees/robot
    • Will free up staff to perform other tasks or allow reduction in workforce
  • Difficult to move money between pay and non-pay in NHS budgeting
ideas for reducing costs 51
Ideas for reducing costs 5
  • Reduce training costs
    • Consider in-house training; If several members of staff require training then it might be possible to organise in-house events
    • Trainees have separate budget
    • Lab representative sent for training then responsible for feeding-back to other staff members
    • Training may become limited to few experienced staff
    • More difficult for employees to collect CPD
ideas for reducing costs 6
Ideas for reducing costs 6
  • Reduce conference costs
    • Send only those who are presenting or have a poster
    • Consider attendance at only one day to minimise accommodation costs for longer meetings
    • Ensure attendees feedback to rest of lab
    • Invite speakers to present to whole lab
    • Trainees have their own funding
ideas for reducing costs 7
Ideas for reducing costs 7
    • More difficult for employees to collect CPD
    • Reduces lab profile at a national level
    • Reduces staff potential for networking and making contacts
  • Reduce meeting costs
    • Try to avoid overnight stays
    • Arrange meetings in-house
    • Use conference calling
    • Reduces staff ability to collect CPD
  • Reducing investment in staff through training, meetings and conferences will reduce staff satisfaction and reduce productivity
  • A happy workforce is a productive workforce
  • Get staff involved in cost-cutting exercises eg. by having a Suggestions Box, with small prizes each month for the best money saving suggestion.
  • Encourage CPD activities by promoting journal clubs and case study presentations
  • Encourage a culture of feedback; positive as well as negative, to all levels of staff
ideas for reducing costs 71
Ideas for reducing costs 7
  • Minimise equipment purchasing costs
    • Thoroughly research equipment before purchase
    • Take into account service contract costs
    • Seek advice from other labs about good products
    • Consider equipment with more than one function
    • Use NHS purchasing power to get reduced price
    • Consider second-hand?
    • Cheaper options may be less reliable, less functional, less flexible
ideas for reducing costs 8
Ideas for reducing costs 8
  • Minimise service contracts
    • Some service contracts are worth more than the cost of the equipment over several years
    • Essential pieces of kit that are heavily used require service contracts
  • Reduce maintenance costs
    • Shop around for best deal
    • Ask sales rep for special offers
    • Try haggling with offer of buying several items
    • Consider second-hand?
ideas for reducing costs 9
Ideas for reducing costs 9
  • Reduce consumables costs
    • Shop around for best deal instead of reordering from usual supplier
    • Ask sales reps for special offers and discounts
    • Some discounts with standing orders
    • Cheaper consumables may be of reduced quality
  • Reduce reaction volumes
    • PCR reagents, sequencing reagents, capillary sequencing reagents, commercial kits, etc
ideas for reducing costs 10
Ideas for reducing costs 10
  • Reduce office consumables
    • Reduce colour printing
    • Reduce all printing
    • Recycle toner
    • Reuse plastic wallets, folders etc
    • Print double-sided, print half-size
    • On-screen checking if possible
    • Shop around for suppliers
ideas for reducing costs 11
Ideas for reducing costs 11
  • Minimise sending tests to other labs
    • If testing is straightforward it may be worth setting them up in your lab to save on costs of sending the samples away to other labs.
    • Look at which tests are most commonly requested and most expensive.
income generation 1
Income generation 1
  • Budget as set by Strategic Health Authority
  • Payment for private patients
  • Payment for services offered nationally, via UKGTN
income generation 2
Income generation 2
  • Set up new tests that can be offered as national services
    • New services for diseases without service available
    • Validation of new tests requires investment of money, time and expertise
  • Offer better (cheaper/faster/more comprehensive) service than competitors
    • May require new equipment and higher staffing levels to do this
  • Reduce costs
    • Evaluate job roles, lab processes, skills-mix to determine optimum workforce
    • Try to minimise training costs
    • Research capital equipment purchases well
    • Shop around to get best deals for consumables
  • Maximise income
    • Set up more in-house testing