Operations

What to Consider When Choosing Between In-House Testing and Third-Party Laboratories

By Lori Knous, general manager, Smithers

Laboratory testing is a critical part of any product development cycle. From research and development to material validation to failure analysis, objective test data can provide valuable insight into a given challenge and support confident decision-making.

Companies have several choices when it comes to collecting test data. Some companies have in-house laboratories and a designated team to manage their testing and validation projects. Others rely entirely on independent, third-party laboratories. Many use a combination of in-house and independent testing resources to maximize efficiency.

The ideal combination of in-house and independent testing will differ for every company – and even every project. There are seven important factors to consider when deciding how to proceed.

1. Capabilities

In-house testing laboratories often are equipped and configured based on the specific, frequent needs of the company. This level of optimization makes the in-house lab an easy choice for certain types of testing.

Because independent laboratories serve a wide variety of industries, these labs usually are equipped for a broad range of testing capabilities, including more niche services. This robust service portfolio can be an asset for testing projects that require more complex protocols.

photos courtesy of Smithers

Another factor to consider when assessing capabilities is scale. For example, a company seeking to experiment with several new rubber compound formulations may only have industrial-sized mixers in house. Many independent laboratories are equipped with small-batch mixers, an option for conducting more cost-effective mixing studies.

2. Convenience

When it comes to deciding between an in-house lab and a third-party, independent testing partner, the importance of convenience is determined by the desired outcome of the testing project.

For example, a company may be simply experimenting, with no clear objective yet defined. Unexpected discoveries may require a sudden change to the testing protocol or other adjustment. If this happens at an in-house laboratory, the testing team can pivot right away and continue with its work.

An independent laboratory also can accommodate open-ended development programs and offer flexibility and innovation throughout the process. The lab can work directly with the company to adjust its previously defined testing program before continuing with the project. If the company prefers to examine test samples in person before determining next steps, a visit must be arranged to the independent lab. This can prolong a project timeline. However, if the independent laboratory is within driving distance, on-site visits are far more convenient and require less time to arrange. In this case, choosing between an in-house or independent lab is simply a matter of preference.

3. Efficiency and time

Efficiency and project deadlines are important considerations when deciding whether or not to outsource testing. If a company’s in-house lab is fully booked due to a preexisting project delay or other backlog, outsourcing can be an excellent solution for keeping a project on track.

However, not all laboratory testing is deadline driven. Many companies conduct fairly repetitive validation testing on a regular basis, even daily. For these types of testing, in-house testing may be the more efficient choice, since there is no need to constantly ship samples back and forth.

In many cases, in-house and independent testing laboratories can coordinate simultaneous testing programs to maximize efficiency. A company may choose to split a project between its in-house lab and a partner in order to receive its test results faster and make a more efficient decision, minimizing production slowdowns and increasing speed to market.

4. Expertise

When it comes to expertise, both in-house and independent testing laboratories can provide unique value to a testing project. There may be a person or team at an in-house laboratory who has worked with many generations of a given product, component or material. Their long memory for the evolution and nuances of the project and the market can be highly beneficial in certain contexts.

Independent, third-party testing labs usually are staffed by technicians and scientists with years of diverse experience, from hands-on industry roles to laboratory testing expertise. Virtually all independent lab employees have worked with a wide variety of components, materials and industries and have seen countless variations of comparable products. With that diverse background, independent lab employees can bring a fresh perspective to a new product or a specific performance challenge.

5. Confidentiality

A good independent laboratory will have comprehensive processes in place to protect client confidentiality and ensure that all test samples and proprietary data are secure. However, some companies have strict policies in place that prohibit third-party involvement in certain projects or stages of the research and development process.

Every company will have its own philosophy regarding how it prefers to handle proprietary testing data and is responsible for deciding what course of action is best suited to its preferences. page 12 u www.arpminc.com 11

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6. Data objectivity

Different clients have different requirements regarding the origins of testing data for purchased products or raw materials. Some will accept in-house testing data. Others require data from an independent, third-party testing lab.

If clients already have a strong relationship with a particular lab, they are likely to trust the integrity of any testing data from that lab. In these situations, partnering with the right independent laboratory can lend additional credibility to a new business partnership.

7. Cost

In any business decision, cost considerations can factor heavily into the final plan. However, the sticker price of independent testing is not the only number in the equation. The long-term value of in-house vs. third-party, independent testing is affected by several additional factors, such as delayed timelines and lost revenues.

Any new product launch brings with it the expectation of monthly revenues. However, project timelines can be delayed if the company lacks the time or resources to complete in-house validation testing on schedule. When this happens, the project team has a few choices:

1. Wait for resources to become available – and forego monthly revenues for the duration of the waiting period. 2. Reduce or eliminate the delay by outsourcing the required testing to an independent laboratory.

In many cases, the cost of external testing will be a fraction of the revenues and profits the company may realize by launching the product on time. Every scenario is different, but project leaders should carefully weigh the benefits of realizing revenues earlier against the out-of-pocket costs of sending a product to an independent laboratory for testing.

8. Choosing an external testing partner

There are a number of criteria to consider when selecting an independent, third-party laboratory for outsourced testing. Companies should be mindful of:

• The lab’s accreditation. ISO 17025 accreditation is only awarded to laboratories that meet ISO’s

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standards for quality management, which is critical for ensuring accurate test results. • Industry experience. Some labs specialize in a few specific industries, while others take a more generalist approach. A lab with a strong track record in the relevant industry can lend a valuable perspective to any testing project. • Capabilities. Ideally, an independent lab should be equipped to conduct most elements of a given test specification or project. • Global footprint. Some labs have just one location.

Others are part of a vast network of experts who can offer support, perspective and diverse experience on a global scale. • Approach to client relationships. An independent, third-party lab should be willing to invest in a longterm relationship rather than just a transactional one, so it can support the ongoing growth and evolution of its clients and its products. A deeper relationship can help in anticipating needs, quickly adapting to testing changes and investing in new technologies to support a client’s growing needs. • The point person. Direct access to experts, rather than just project managers, is a tremendous benefit when choosing an independent lab to work with. Some complex technical problems are best solved via direct communication with the engineers and technicians conducting the testing.

When it comes to in-house and third-party, independent laboratory testing, the ideal path forward will be unique to each company and each project. And of course, there will almost always be additional variables to consider when choosing. Careful consideration of each factor, coupled with a review of company priorities, can ensure a confident decision, an optimized timeline and accurate data. u

Lori Knous is the general manager of Akron-based materials testing laboratories Smithers, a leading provider of testing, consulting, information and compliance services, where swhe oversees a team of experienced testing engineers, chemists and technicians. She has 16 years of experience in operations leadership and nearly 30 years of experience in materials and metallurgy. For more information, visit www. smithers.com