Supplier Onboarding: How Labs can Offload the Supplier Addition Process - ZAGENO

Written by ZAGENO | December 5, 2023

The lab supply vendor addition process can be a real hassle—inefficient, headache-inducing, and a time-drain. It’s not just inconvenient; it also costs your lab money, wastes valuable time, and hampers growth. Because this process is so tedious, life sciences organizations often look to streamline it or offload it to a third-party, such as a lab supply marketplace. Optimizing the supplier addition process can result in significant cost and labor savings, as well as other benefits, such as a more diverse supplier base, reduced risk, scalability, and more.

Steps involved to add a new lab supply vendor

Setting up a new supplier encompasses everything from the moment you decide to purchase a product from a new supplier (or sometimes even a non-preferred supplier) until you can place the order.

A ZAGENO study found that it takes an average of 3+ weeks to add a new supplier to the purchasing system. Further, 61% percent reported experiment delays due to waiting for a new supplier to get up and running.

Why does it take so long to add a supplier? There isn’t one specific bottleneck at fault. Rather, it’s a number of small, routine tasks that add up, including: vetting, documentation gathering, supplier profile creation, credit checks, negotiation, supplier training, and setting up of purchase orders, invoicing, and receiving. Comprised of paperwork, communication, and data entry, these manual tasks slowly route through multiple departments, such as the lab, accounting, finance, procurement, and IT. There are many touchpoints in the supplier addition process, all of which cost time and money.

The cost to add suppliers

There are many costs, both visible and hidden, inherent in the in-house supplier addition process.

The average cost to onboard a supplier ranges from $1,000 to $10,000. Further, ZAGENO found that biopharma R&D teams added up to 50% new suppliers in 2021, some adding hundreds per year. Multiplying the onboarding cost by hundreds of new suppliers can quickly reach labor costs in the millions.
Any time spent by the lab adding suppliers is time spent away from the bench, slowing time-to-milestone achievements. Experts estimate that operational costs can range anywhere from $10,000 to $40,000 per day to run a biotech lab and as much as $100,000 per day for some pharmaceuticals, so each day of experiment delay has a large financial impact.
Many new suppliers are one-offs, resulting in a large tail spend. A growing longtail stands in the way of economies of scale, leveraging buying power, and ensuring that pre-negotiated discounts and terms are being properly applied.

Options to streamline or outsource the supplier addition process

There are different options available to R&D labs looking to streamline or outsource their supplier addition processes.

Virtual lab manager	Best for: Start-ups Features: Provides remote lab operations management and oversight. In some instances, duties include purchasing lab supplies. Labs often quickly outgrow this approach. Scientists are not able to easily access lab supply spend, order history, or delivery information, nor benefit from volume discounts.
Freemium lab management software	Best for: Start-ups Features: Facilitates experiment tracking, collaboration tools, and sample management. Premium versions may offer limited lab supply ordering tools that cover a small percentage of lab supply requirements.
Outsourced procurement team	Best for: Early- to mid-stage biopharma Features: Appeals to organizations that do not have the in-house expertise or resources to handle procurement. Trade-offs include a loss of control over the process, as well as a loss of institutional knowledge.
Procure-to-pay (P2P) platform	Best for: Early to late-stage biopharma, pharma Features: Implementation aims to integrate purchasing and accounts payable systems, enabling an end-to-end process from product selection through payment. Utilizes PunchOut catalogs for buyers to purchase supplies from pre-determined vendors through the buyer’s procurement portal. Due to niche product and timeline requirements, scientists must frequently go off-catalog and make free-text, maverick purchases from new suppliers, which must be added to the system.
Lab supply marketplace	Best for: Start-ups through pharma Features: Arose from the need for a simplified, streamlined, automated ordering process for the life sciences community. Ordering users can build a single cart from millions of products from thousands of qualified suppliers, as well as access tools to help increase scientific productivity by removing the manual and tedious steps labs are forced to deal with when researching, purchasing, and tracking lab supplies. If a supplier is not available on a lab supply marketplace, the customer service team can typically add the supplier within 24 hours.

How does offloading the supplier addition process to a lab supply marketplace work?

When a specific item is unavailable from a scientist’s “usual” vendor or a niche product is required, a lab supply marketplace, such as ZAGENO, allows users to bypass the normal, protracted supplier addition process in one of two ways:

Using a self-service interface, the user can identify an in-stock, vetted product alternative from one of thousands of supplier partners and instantly place an order, with no set-up needed. If needed, the customer service team can also help with alternative product identification and procurement.
If the product is only available from a supplier not already part of the lab supply marketplace, the customer service team will set up and onboard the new supplier within 24 hours.

The primary benefit of offloading the supplier addition process is to increase efficiency and free up time for more value-added activities, such as research or strategic procurement. By reducing the labor associated with adding suppliers, labs can save upwards of hundreds of thousands or even millions of dollars per year.

7 additional benefits for using a lab supply marketplace to manage suppliers

Centralized management. A lab supply marketplace provides a single channel for supplier management, which allows for easier order, inventory, and performance tracking.
Cost savings: By leveraging enterprise-wide buying power, a lab supply marketplace can negotiate better pricing with suppliers. Access to millions of SKUs allows for easier price comparison.
Pre-vetted supplier base. Lab supply marketplaces reduce risk by performing due diligence, checking credit, and negotiating terms with suppliers before making them available to customers.
Audit-ready. By serving as a digital repository of lab supply purchasing information, lab supply marketplaces help keep the organization audit-ready by constantly building an audit trail.
Diverse supplier base. Lab supply marketplaces often include supplier diversity certifications and search and filter capabilities for easy identification of diverse suppliers.
Automation. Lab supply marketplaces aim to fully automate and streamline the purchasing process. Labs that have already implemented P2P but are experiencing stalled automation can add access to a lab supply marketplace to finish the job. Among other things, automation reduces labor costs and the likelihood of errors.
Scalability: As labs grow, lab supply marketplaces can easily scale to accommodate changing requirements and are designed to handle a growing number of users, suppliers, and products.

An inefficient supplier addition process not only ramps up frustration and costs, but it can also interfere with scientific achievement, which runs counter to the R&D mission. By strategically offloading this process, labs can transform a common headache into a competitive advantage.

Get in touch with ZAGENO today and learn how to streamline your lab supply ordering process so you focus on what matters; those eureka moments.

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