Situation:

An in vitro diagnostics (IVD) products company had developed a large portfolio of cross-platform products that required intensive testing regimens to validate for a wide range of domestic and international testing platforms. The company, in business for over 20 years, had developed extensive and expensive internal laboratory capabilities to carry out these assay requirements. A new COO was hired to streamline operations with a focus on reducing costs and working capital, increasing quality and accelerating cycle-times.

Process:

Kineticos worked closely with management to first understand testing requirements and current practices. With few tools available to the laboratory staff and limited IT systems, this exercise involved detailed manual reviews of the entire test menu including methods, frequency and costs. Fortunately, our staff, which included former laboratory managers and medical technologists, was well versed in clinical laboratory operations and assay validation. After establishing this baseline, we developed and agreed on a testing scheme that would outsource the majority of the volume while retaining only the most specialized or rapid turnaround assays in-house. We then developed a detailed RFP model and proposal process to identify and select the highest value outsource laboratories. We managed the complete procurement cycle from RFP through technical and cost evaluation to final contract negotiations.

Outcome:

The company successfully transitioned to a new business model that includes significant outsource laboratory testing. This fundamental change resulted in >25% reduction in costs with annual savings of >$1M. Most importantly, the change was implemented with minimal disruption to operations while maintaining all quality standards recognized by customers, FDA and ISO.