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

1. 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

2. Laboratory Budget • Costs for typical laboratory • Ideas for reducing costs • Ideas for increasing income

3. Overheads • 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

4. 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.

5. Training, meetings and conferences • External training courses • Trainee meetings • Training for trainers/bioinformatics • ABI training • Meetings • Best practice meetings • Conferences • CMGS, BSHG, ESHG

6. Equipment • 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

7. 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

8. Consumables • 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

9. Other costs • Subscriptions to journals • Fees for EQA schemes • Required under CPA regulations • Crimimal records checks and travelling expenses for candidates • etc

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. However! • 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

19. 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

20. 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?

21. 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

22. 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

23. 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.

24. Income generation 1 • Budget as set by Strategic Health Authority • Payment for private patients • Payment for services offered nationally, via UKGTN

25. 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

26. Summary • 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