Lancet Laboratories gains advanced supply chain management capabilities with Microsoft Dynamics 365 Finance and Operations

Modernising supply chain management

When Lancet Laboratories, one of the largest private laboratory practices in South Africa, made a strategic decision to embark on a digital transformation exercise some years ago, the group’s Electronic Laboratory Services (Elab) business set out to procure a solution to modernise physical infrastructure support. Elab sought a solution to ensure that around 550 points of presence, including labs and depots, were stocked with critical materials and equipment needed for testing, and were able to report the test results quickly and efficiently.

Unlike supply chain management in many other sectors, procurement and supply chain management for laboratories must enable complex materials handling, tracking and pricing for thousands of items. As patients’ lives may depend on the laboratories’ ability to test and deliver results quickly and efficiently, the support system must deliver the ability to order at the right price from the right organisation, receive stock into warehouses, and it must enable batch tracking and expiry date tracking in real time.

Through a referral, Elab contracted ERP consultancy and systems integrator Yellow Professional Services in 2014 to assist in the move to a more modern and integrated ERP and laboratory management framework. Microsoft Dynamics AX 2012 R3 was rolled out, incorporating financial administration, supply chain management and core warehousing and inventory management, integrated into Elab’s laboratory management solution.

While AX 2012 was not yet a cloud solution, Microsoft had at that time committed to delivering a cloud-based solution, so Elab implemented AX 2012 as a ‘phase 1’ exercise, with a view to later migrating to the cloud.  

Training was provided at the Elab campus as part of the change management process, and Yellow Professional Services was appointed to manage any updates and fixes to the system.

Moving to the cloud

When Microsoft announced the evolution of the technology to Dynamics 365 in late 2016 and early 2017, Elab became part of the early adopter programme and started its migration investigation, design and planning. 

The system was migrated from AX2012 to Dynamics 365 and the solution was also extended to manage supply chain activity at over 550 additional sites. The solution was a comprehensive implementation of Dynamics 365 Financial Finance and Dynamics 365 Supply Chain Management (SCM) , including Advanced Warehousing in central and regional warehouses as well as SCM Supply Chain Management at 550 laboratories, phlebotomy sites and depots nationwide, integrated to Lancet’s Laboratory Management Solution (LabOS), to ensure that the Lancet laboratories and its depots are always optimally stocked with the consumables such as test tubes and the reagents required for laboratory testing.

For Yellow Professional Services, the migration project was an evolutionary and transformational one – the largest and most complex the company had undertaken. It was the single biggest Dynamics 365 implementation in the southern hemisphere at the time and is still one of the largest and most complex globally.

Future proof and able to flex  

For Elab, a key benefit of the Dynamics 365 migration is efficient management of its integrated supply chain, which connects over 550 labs depots, and sites across South Africa. Points of presence can quickly and easily request supplies, have the request authorised and the materials dispatched, and Lancet Laboratories is able to track and audit stock in real time.

Even amidst unplanned increased demand for Lancet Laboratories’ services during the early months of the Covid-19 pandemic, the supply chain flexed and functioned as intended, accommodating sudden shifts in procurement, new demands on timelines, and the need for increased stock levels, despite some latency due to off-shore hosting.  

The system also supports receipt management of inventory at laboratories and depots, management of inter-lab/depot transfers, batch tracking through the supply chain and visibility at lab and managing pathologist level.

Elab has also gained efficient reporting of laboratory expenses, including consumption of reagents. 

In the accounts payable and receivable department, Yellow implemented process optimisation, including segregation of duty management through the security capabilities within Dynamics 365. This includes stringent rules around approvals of a change of vendor bank account – an area which could compromise an organisation financially. With integration into Lancet Laboratories’ banking partners, statements can now be imported electronically for automated reconciliation, and vendor payments are done directly within Dynamics 365 processes. The direct vendor payments and statement import reconciliation capabilities support transparency, audit and stronger vendor relationships. The solution also gives finance new levels of visibility and depth of information.

In addition to enhanced efficiency, visibility and control, the platform will now serve as a framework and foundation for the business to scale, flex and adapt to changes both within and without the business in future.