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Reconciling Your Lab's Chemical Inventory Drift

Implementing a reliable chemical inventory system takes time and effort. And when chemical inventory drift occurs, it can be incredibly frustrating to have to reconcile. Drift is a term used for the accumulation of inconsistencies in a chemical inventory system over time. You can do a decent job of reducing drift with a good management system, proper planning, and a reliable team to execute it. Yet even some of the best systems still have been shown to experience up to 20% quarterly drift. Therefore, it is strongly recommended that your lab or facility has a proper plan in place in order to maintain and reconcile the system’s accuracy over time. The best way to do so is by conducting some level of reconciliations, also referred to as an audit of your chemical inventory.

Chemical Inventory Reconciliations

To combat the inevitable drift of your chemical inventory system, there are three main types of reconciliations you'll want to consider: regular reconciliations, annual reconciliations, and rolling reconciliations, all of which tend to differ in planning, accuracy output, and overall cost. Every lab and facility varies with size, needs, and budget thus there is no wrong answer as far as what reconciliation you choose.

Regular Reconciliations (Monthly, Quarterly)

Implementing regular reconciliations can be a big undertaking as it can require being prepared to audit every month, but this sort of detail to your chemicals will keep your scientists happy with a well-maintained inventory. If you are not bar-coding your chemicals or if you do not have a chemical inventory management system to handle such a task, then your project's requirements and costs will begin to add up pretty quickly.

Planning

It would be a good idea to have a designated person oversee managing the inventory audit for consistency. This inventory project manager should have an intimate knowledge of the program and should be able to organize the data capture team and keep the lab staff on the up-and-up. Once planned and organized, regular inventory audits can often run themselves on a set schedule. Typically, in a routine monthly audit, the team (internal and/or external) will know what to plan for and expect come the third week of every month. 

Accuracy

Chemical inventories that are reconciled on a monthly or quarterly basis will have higher accuracy outputs on average than the annual audits. If you are looking to pull accurate reports on a regular schedule, this method would accomplish just that. When you go through every location and log every bottle, you will have the clearest picture of what is currently on hand and where to find it. This makes for stellar reporting and very happy lab users. Scientists will spend less time looking for or ordering unnecessary chemicals, and more time doing the important work (refer to reconciliation graph for method comparison).

Cost

The cost of running a regular program will vary depending on how well the program is maintained day-to-day. You can expect the overall cost for running regular monthly audits to be higher than an annual method. However, you can count on less time being spent on future inventory audits due to a well-maintained inventory especially if a consistent project manager and team are kept in place.

Annual Reconciliations

Yearly audits are a very popular way to true-up your lab’s chemical inventory. You can choose between annual, semi-annual, or bi-annual. Here are a few factors to consider when planning your program.

Planning

Depending on the chemical inventory system you have, you will have to do a certain amount of preparation for an annual audit.

  • First, review your storage locations. They are likely to change over the course of a year, so you’ll want to address that in the planning phase.
  • Catch up with the stakeholders of your program. Are they interacting with the inventory system in the ways you expected? Take the time to interview them and consider any changes that have happened over the year and what updates need to be hashed out before going forward.
  • Train a team to go into the labs to take inventory and to properly scan everything – make sure they know what they are doing and where they need to go.
Accuracy

Just like when an initial inventory project completes, an annual audit will bring your inventory similarly back to 100% accuracy. This accuracy is nice to have when submitting permits and undergoing a compliance audit because you can be sure of the data. On the other hand, that level of accuracy is only accomplished at the time of the project's completion. Unfortunately your chemical inventory will begin to lose its accuracy once the audit is over, and by mid year, your inventory most likely has drifted quite a bit. By month eleven, your lab’s inventory is certainly not functioning at 100% accuracy (refer to reconciliation graph for comparison).

Cost

A yearly audit should cost a fraction of the initial roll out of a new inventory system. And if you have been good about logging and bar-coding everything that comes in the door and handling all your empty and disposed chemicals, the process should be very smooth (and relatively cheap). Big costs start to accrue when you have to log all the new chemicals that slipped through the receiving step of the system over the course of the year. This misstep interrupts the flow of a good reconciliation.

Rolling Reconciliations

For sites that have several locations to manage and prefer costs to be regular and spread throughout the year, you may then want to consider a rolling reconciliation of your inventory. With this method, you do not need to cover all locations at once. Instead, you can have a smaller team start at one location or a few locations at a time, and then continue on as completed, as part of their normal routine work.

Planning

Setting up a good rolling reconciliation takes a well thought out plan and input from several stakeholders. It also requires good organization and time management in order to stay on schedule and keep up the consistency. There may even be a hiring or resource usage decision you'll have to  make in the process. A third-party team such as Triumvirate Environmental can help map out which areas to hit and when, making sure that timeline works with all the affected labs. The project manager will keep track of the progress with regular status updates for the stakeholders and adjust the schedule, as necessary.

Accuracy

The accuracy of a rolling inventory reconciliation is never going to be 100% accurate. The upside is that, on average, the site inventory will be more accurate throughout the year than a site that only conducts annual audits. This is because you will have done an audit of each location (at least once) over the course of the year’s cycle. This method is a great way to guarantee good to excellent accuracy over time, lending itself to programs that would like to run regular organizational reports that require such (refer to reconciliation graph for comparison).

Cost

Depending on how you set up a rolling reconciliation program, the cost tends to be quite reasonable and often incorporated into an existing scope of work. It also reduces the frequency and intensity of site-wide audits over time. Keep in mind a rolling program, though, could increase resource usage indefinitely. As with the implementation of any good chemical inventory program, overall costs like over-ordering, excessive disposal, and compliance will likely be reduced and help pay for itself.

Accuracy Comparison of Reconciliation Methods

graph-1Chemical Inventory Reconciliation Methods

Next Steps

It’s hard to decide the best method for keeping a chemical inventory accurate over the course of the year. That’s because there is no clear answer, and every lab or facility site is unique in structure and needs.

If you are still unsure of what reconciliation process is right for you, contact a Triumvirate Environmental consultant today to discuss further by dialing 888-834-9697 or by clicking the button below. To learn more about the importance of drift, you can read more here.

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