At Shire, innovation isn't just in our lab work, but also in how our labs work.
In our pursuit of life-changing medications for rare diseases, we believe every aspect for improved R&D should be explored, even how we manage the stocking and replenishment of supplies. And thanks to recent efforts, we've saved $1.5 million and improved our supply chain and staff time use, freeing up talent, time and resources for R&D activities that advance our pipeline.
How'd we do it? A novel perspective helped us realize the scope of the supply chain project, and then a thoughtful, team approach to data collection and analyses provided the elements that shaped our new inventory control program.
Before Shire's move to Lexington, Mass., our bioprocess development labs were physically isolated and managed independently, but they now operate in a progressive, open structure with glass facades and featuring just-in-time (JIT) inventory with limited longer term storage. We had to rethink inventory and create a new infrastructure and processes that could efficiently and effective support more than 100 scientists used to ordering their own materials. Wherever possible we wanted to create economies of scale.
A process development team lead by Stacy Price, Head of Operations, analyzed the needs of each Shire researcher, both in terms of supplies and in work flow, and invented a new inventory system that assured scientists immediate access to all supplies necessary to keep their projects moving forward, including small, tailor-stocked locations strategically placed throughout our facility. A key feature of the program is an automated replenishment program that establishes baseline inventory levels for individual items, tracks their consumption and makes restock recommendations based on use and stock levels. With this system, scientists are released from time-consuming supply management.
Shire's supply success continues to reap dividends. We selected a vendor to provide full-spectrum inventory management as well as deliver cost management opportunities. Annually, we've returned to our scientists collectively more than 2,400 hours formerly spent on supply management, which when other employee time is included, accounts for increasing overall staff productivity by 40 percent and boosting morale. We also reduced excess inventory by more than 30 percent, and the project paid for itself in one year, creating an estimated net benefit of more than $1.5 million over five years. That's why we think innovating the work of labs is a great way to help our lab work to enable people with life-altering conditions to lead better lives.