The hidden value in your lab

Take a look around your laboratory, there may be a wealth of instrumentation and equipment sitting unused. Ben Potenza introduces us to the concept of proactive asset management for idle equipment, and answers common questions about how this can realise the best possible return on investment The general business benefits of outsourcing ‘non-core’ activities have long been recognised across the chemical, pharmaceutical and life science sectors. Concentrating on discovery, analysis and manufacture of next generation drugs, innovative materials and novel products, while specialist partners take care of other business-essential activities is a well established principle. Now, laboratory managers looking to achieve the next level of efficiency are outsourcing the active management of surplus analytical, laboratory and other equipment. Specialist service companies, staffed by industry experts and proven project management professionals, have emerged as leaders in this new field. They offer an approach and services that are significantly different from the traditional equipment dealer or auction house. [caption id="attachment_40813" align="alignright" width="400"] Figure 1: EquipNet’s value control model[/caption] In common with many areas of business, taking a holistic approach to surplus asset management can pay dividends. Figure 1 shows how such an approach can cascade through a company’s activities. Projects often need to be customized based on time, and usually involve various means of disposing of instrumentation, depending on priorities (highest possible ROI, release of new cash to purchase instrumentation, specific time constraints, for example). Equipment can be redeployed to another site within a company, or sold though negotiated sales on an online marketplace or via a live auction event. In addition, clearance programmes can ensure the safe disposal of items that can not be reused or sold. Taken individually, each element of the model adds value. When combined, they offer the flexible end-to-end solution that many are looking for. Redeployment With all the time and money invested in evaluating, selecting and purchasing a piece of equipment, it should ideally remain within the company for as long as possible in order to deliver the highest value. If an item falls out of use, highest value is always realised by redeploying it to another part of the business. The only way this can be successfully and consistently achieved is when a central tracking platform is in place. This must allow easy access to comprehensive listings of idle equipment and provide detailed specifications – letting everyone in the company know what they have and where it’s located. Users should be able to post, track, identify and complete the process of internal redeployment. Important features to look for include: robust platform that can be installed behind a company’s firewall and be accessed across multiple facilities, a simple user interface that allows workflow management, multiple access levels for managers and executives across the business, and in-depth search functionality. Sale If redeployment is not an option, the sale of an item is the next logical step. Online marketplace packages are increasingly being used, and provide access to a whole new range of potential buyers. When considering an online transaction however, particularly for a high-value and complex piece of equipment, the human touch is perhaps still the most important factor. Using a partner with specific industry experience combined with a solid reputation to broker a sale can be crucial to success. However, the desire to recoup as much money as possible has to be balanced with time constraints. When disposing of the equipment quickly is the highest priority, auctions are often a reliable route to take. Many factors must be considered when designing and managing a successful auction event, and all events should be worked through on a case-by-case basis, with a specialist partner advising on the right approach for you. Options might include an online auction, a live/webcast events, sealed bid and private treaty sales. Creativity and innovation are also crucial here – active marketing, expert knowledge of the equipment, and a flexible approach to managing bids close to, but under any reserve set, can make all the difference when the time comes to sell. Disposal Finally, assets that hold very little value are best dealt with through clearance, whether this is by donations, scrap and environmental recycling. By considering the scrap value of your idle equipment, and comparing this with the market value, it is possible to generate the highest rate of return. This is something that a specialist provider should be able to provide advice on and organise. To plan and control efficiently, managers need to have a thorough understanding what surplus and idle equipment is available in their business, and where it is located. A proactive strategy ensures that this is achieved, and that the company is achieving the best possible return. Even so, undertaking this kind of approach brings its own challenges. It requires formalised processes, knowledge of the industry and its equipment, dedicated resources, and a commitment to change management. By partnering with a specialist service provider, companies can save themselves time and resource, while still enjoying the clear benefits of cash release, reduced costs, and increased operational efficiency. Case study In March of 2013, a major pharmaceutical company was required to close a section of their R&D laboratory facility in northern Germany. They enlisted the help of EquipNet, who was able to create an inventory of redundant assets from this site, with the intent of redeploying as much as possible. Any remaining items were then to be sold on – all within a six month project timeframe. In order to achieve this, all assets were initially catalogued and photographed, and fair market valuations were established for each item. Items were then listed on a secure, company specific software platform so that the organisation’s many facilities had full exposure to the items available. Due to tight time restraints, the equipment was simultaneously advertised online. Items that didn’t redeploy or sell through the managed price approach were put into a web-based auction. The location was cleared within the allotted timeframe and the company maximized the return on their original investment in those assets – all without interrupting on-going operations. At the end of the project:

• 10% of the items were redeployed. By relocating this equipment, new purchases were avoided, generating a cost saving of more than $200,000
• 64% of the items were sold
• 20% of the items held no resale value and were scrapped