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Creating the Ideal University Stockroom

Challenge

Reducing costs can be a tricky puzzle for any organization, but for this multi-campus university faced with impending state-wide budget cuts to higher education, it was a dire necessity. Scarce resources limited the university’s ability to identify their most probable opportunities for waste reduction, especially amid a complex mix of political, financial, and operational pressures.

Between the interests and influences of university and department leaders and the financial pressure from principal investigators to reconcile stockroom budgets, in the end the most important objective was to meet the needs of researchers and to ensure that all the data flowed smoothly among the various university departments. University leaders turned to VWR’s Business Process Consulting team to ask: how do we construct the ideal campus-wide stockroom model, one that would cut costs while enhancing the services that our researchers care about the most?

Solution

An Avantor Services Lean Six Sigma-trained Process Consultant began with a project charter detailing expected project results based on a matrix of goals and objectives for each stakeholder group. Together with project management tools, this data ensured the final results would meet the needs and timeline of those most affected. Extensive surveying, onsite interviews, and transactional data captured the political landscape, voice of the customer, and the process data at the center of the detailed financial models.

Sources of Waste in the University's Stockrooms

  • High markup
  • Excess inventory
  • Static product mix
  • Low usage items
  • Travel to/from stockroom
  • Key scientific needs unmet
  • Reduced buying power
  • Poor stockroom marketing
  • Back-end disconnect
  • Manual processes
  • Small product mix
  • Cumbersome transactions
  • Stockroom/delivery disconnect
  • Disparate management styles

When the project began, the university had three distinct stockroom models in place: two of the models were managed by university staff and funded exclusively by a university price markup ranging between 14 and 44%; the third was managed by a vendor, funded at less than 1% price markup. Service levels, management structures, and end-user sentiment differed across campus, and some researchers were very price conscious while others cared most about customer service.

Result

In less than 30 days, our consultant distilled this complex landscape into five viable stockroom models, each tailored to the needs of the stakeholders, with proposed savings as high as $1.1 million. The proposals included:

  • Detailed cost models to assess how the impact of solutions would different from the current state
  • An attribute-based modeling tool to allow for comparisons of the plans based on the needs of key stakeholders
  • A detailed map of the political landscape, including goals and objectives from everyone with a say in the decision, the greatest focus emphasizing the perspective of researchers and principal investigators
  • The best demonstrated practices for stockrooms in higher education

Figure 1:Proposed models for stockrooms offered savings of up to 53% of current operating costs. In each proposed model, the savings are the result of the increased buying power, reduced process variability, reduced markups, reduced inventory, and standardization of operations across the campus.