Improving Efficiency in the

Research Lab with RFID Smart

Rooms
Keith Hoffman, Product Manager, Smart
Stockroom


Contents
Introduction .................................................................................................................................................. 1
How the Smart Stockroom Works ................................................................................................................ 1
Smart Stockroom Benefits ............................................................................................................................ 2
Smart Stockroom in Action: Success at the Stowers Institute ...................................................................... 4


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Introduction
Many inventory inaccuracies exist in the retail world today. Most retailers have only about 65 percent
accuracy into their inventory on a given day. Imagine trying to operate a business when one-third of the
decisions you make are based in inaccurate data.
Unfortunately, stockrooms at medical and research facilities are faced with problems very similar to
those in retail. Inventory visibility is often a challenge, and accuracy can hover at levels similar to the
retail environment. Shrinkage is a common occurrence.
Research facilities are also plagued by inaccurate charge capture and inefficient PAR level management
and re-ordering, which can lead to millions in wasted products and frequent out-of-stocks. Finally, a lack
of security and regulatory controls -- coupled with inefficient, manual reconciliation processes -- can
result in an extraordinary drain on resources. The bottom line is that researchers spend more time
procuring supplies when they could be putting all of their time toward making significant contributions
to the medical community by conducting innovative research.
Item level RFID tagging is helping retailers to overcome many of these obstacles, including pushing
inventory accuracy up toward 99 percent. But RFID isnt limited to retail. Hospitals and clinical research
laboratories eager to automate the parts dispensing and replenishment process are rapidly adopting the
technology.
Terso Solutions has developed an automated storeroom solution called the Smart Stockroom that allows
authorized personnel to enter a large storage room, peruse the aisles until they find what they need,
and then automatically check out. The checkout process occurs in an instant, whether they have a single
product or a dozens of complex reagents or chemical products worth thousands of dollars.
The Smart Stockroom is initially being marketing to clinical laboratories and research facilities, but the
solution is adaptable for all industries that require fast and accurate parts dispensing and inventory
tracking.
How the Smart Stockroom Works
The Smart Stockroom is powered by RFID technology, which is increasingly being used in supply chain,
inventory and healthcare applications around the world. By affixing tiny RFID chips to all inventory in the
stockroom, items become fully traceable and can be tracked throughout the supply chain, from the
point of manufacture to the final point of use.
In the Smart Stockroom, all products carry RFID tags. Tags can be applied by the company using the
storeroom, or in some cases are applied at the point of manufacture. An RFID tag is a next-generation
barcode label, capable of storing much more information on the tag. Unlike barcodes, RFID tags can be
read without requiring line of sight.
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When a clinician, healthcare provider or researcher has gathered all of the products needed, they simply
put them onto a counter at the checkout desk and sign into the system by registering a biometric
fingerprint.
An RFID reader located under the checkout counter processes each products unique ID from the RFID
tag, prompting a list of the items being purchased to appear on a touch screen monitor.
The purchaser then chooses the specific account that the items should be billed to. The solution can be
automatically programmed to sync with back office software, such as an Oracle ERP system, for
example, which processes the transaction and ensures that the appropriate budgets are debited for the
transactions.
Although some companies may choose to have an employee staff the Smart Stockroom, the solution is
designed to function as an automated self-service facility, allowing researchers and their staff to have
access to the critical products they need on a 24/7 basis..
Smart Stockroom Benefits
The Smart Stockroom solution offers scientists at medical research labs and medical personnel at
healthcare facilities the flexibility to shop 24/7 for critical products ranging from simple latex gloves to
highly expensive enzymes and reagents that are crucial to scientific exploration. In many cases, the
Smart Stockroom concept can streamline the parts procurement process by consolidating several supply
rooms into one centralized location.
While research labs and medical facilities in the biotech, pharmaceutical, chemical, industrial and
petroleum sectors are ideal candidates to deploy the Smart Stockroom, the RFID-enabled solution can
be rolled out in manufacturing or any industry that requires regular access to supplies.
Ease of use and flexibility: Unlike many professions, most researchers and scientists dont follow a 9-5
schedule. Quite often they work the hours that their research projects require -- be it monitoring an
experiment 20 hours a day for several days, or being on site when a research project comes to fruition
early on a Sunday morning. Given these hours of operation, a truly effective storeroom in a lab or
research environment must offer 24/7 service.
The Smart Stockroom allows researchers 24/7 access to the products that they may require, sometimes
on very short notice, and allows for a simple and fast checkout process.
Vendor neutrality and wider product selection: In addition to round-the-clock product availability, the
RFID-enabled stockroom concept results in a vendor neutral storeroom, meaning that researchers have
a greater variety of products to work with. Scientists can choose from competing products and test
products against each other in a lab environment and possibly find a less expensive option that allows
precious funding dollars to be stretched as far as possible.
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In a typical lab storeroom, inventory is managed by a vendor who is usually only required to supply
products from their company. A stockroom that is managed by the lab itself, however, can carry
products from competing brands and limit pricing markups from vendors, helping to further stretch
often tight research budgets. By regaining control of the stockroom, scientists benefit from a wider
product selection and better pricing resulting from the labs ability to buy in bulk.
Inventory control and visibility: The Smart Stockroom offers far greater visibility into inventory than
existing smart cabinets and storeroom solutions on the market. In many lab settings, researchers are
discouraged from wandering the stockroom to look for products for fear that supplies will accidentally
go missing, which can result in huge financial losses.
With the RFID-enabled stockroom, shrinkage becomes virtually a non-factor. If a scientist exits the room
with items that were not scanned at checkout, a warning light goes off and an email alert is sent to
facility management. Just as retailers have embraced RFID for its ability to reduce shrinkage of highly
expensive items like jewelry and electronics, research labs now have a way to virtually guarantee that
products like enzymes and reagents -- often valued at thousands of dollars per item -- will not go
missing. The Smart Stockroom also tracks PAR levels for each product in the stockroom and provides
automated prompts for re-ordering, greatly reduces out-of-stocks.
Project accounting and finance: While scientists and researchers praise the automated stockroom
system for its ease of use and flexibility, those responsible for overseeing the fiscal accountability for
research labs and medical facilities give the RFID-enabled stockroom solution high marks for the
numerous financial incentives that can be achieved. Specifically, those include labor savings, reduced
shrinkage and cost savings from better inventory visibility and project tracking.
When researchers check out of the Smart Stockroom, they link the products that they are purchasing
with the correct research budget on the touch screen. Because all products are mapped to a specific
research budget, accounting and finance teams save many hours when it comes time to track individual
budget grants, for example. This also simplifies the reconciling process for researchers, who might be
working on several projects simultaneously that are supported by multiple grants.
Reconciling might be the biggest behind-the-scenes benefit of the Smart Stockroom. Most research labs
-- whether non-profit, for-profit or University-funded -- are required to carefully track how grants are
spent for each research project. The Smart Stockroom solution greatly simplifies this process and
removes the potential for accounting inaccuracies based on manual data collection processes. It also
greatly simplifies the compliance process for the accounting and finance teams and the overall
purchasing process.
By managing your own storeroom facility, purchasing teams have the power to negotiate with vendors
on pricing. And because of improved inventory visibility, purchasers can order many products in bulk,
resulting in further savings that extend research grants and make research projects more efficient.
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Labor savings: The Smart Stockroom concept offered by Terso Solutions also results in additional savings
in the form of decreased labor costs. Most traditional stockrooms are manned by at least one full-time
employee. After deploying the Smart Stockroom, labs only need a human worker to receive products
and to re-stock shelves.
Research conducted by Terso Solutions indicates that task can be accomplished in just 20 to 30 minutes
a day for an average-size stockroom that carries 750 products, or a maximum of two to three hours a
week versus a full-time 40-hour commitment to staff the old stockroom.
Additionally, the initial cost of the RFID storeroom solution occurs only once, and eliminates the cost of
full-time worker in perpetuity, resulting in rolling labor savings over the lifetime of the solution. Smart
Stockroom also provides the storeroom associate with flexibility when it comes to re-stocking shelves,
allowing them to come in during a time that is not considered a busy period for researchers.
Smart Stockroom in Action: Success at the Stowers Institute
Last fall Terso Solutions deployed a first-of-its kind, 700-square-foot RFID-enabled automated stockroom
at Stowers Institute for Medical Research in Kansas City.
The 350 scientists employed by the Stowers Institute can now shop for a wide variety of supplies 24
hours a day, seven days a week. The new storeroom carries about 1,000 products; all tagged with tiny
RFID chips that allow for greater inventory visibility. To date, the Stowers team has affixed RFID tags to
more than 3,500 products. Research staff at Stowers is working on up to 150 ongoing experiments at a
time, and the Institute has funded $900 million worth of research.
The Smart Stockroom, located in a convenient and easily accessible area of the 600,000-square foot
Institute, carries about $250,000 worth of medical and research supplies. Researchers and their staffs
purchase about $65,000 worth of supplies each month. Those purchases are automatically tracked to
the specific projects that the researcher is working on.
The overall ability of the RFID stockroom to save time and money isnt lost at Stowers Institute. Unlike
research programs at many Universities that benefit from new funding each year, the Stowers Institute
is almost entirely self-sustaining through the income received from its endowment. In this case,
operating in the most efficient manner possible is a major requirement.
According to its Annual Report, Stowers Institute limits its annual spending to an amount that ensures
perpetual funding, an approach that guarantees that the Stowers Institute will always be in a position to
attract top scientists, acquire the latest in technology, and regularly add new programs to explore new
paths of research.
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Cutting-edge and innovative technology solutions like the Smart Stockroom allow the Stowers team to
use their funds in the most practical manner, assuring donors to the Institute that their gifts will have a
positive impact on the Institute and on society for many years to come.







Terso Solutions, Inc.
Terso Solutions, Inc. is the leading provider of automated inventory management
solutions for tracking high-value medical and scientific products in healthcare and life
science. Terso Solutions, Inc. is backed by 13 years of RFID product development and
implementation experience. Our product line includes RFID Cabinets, Refrigerators,
Freezer (-20C to -80C), and RFID-enabled smart rooms. Headquartered in Madison, WI,
Terso Solutions is a wholly-owned subsidiary of the Promega Corporation. Additional
information is available at www.tersosolutions.com.

5540 Research Park Drive Madison, WI 53711 www.tersosolutions.com info@tersosolutions.com