Is It Taboo To Purchase Used Pharmaceutical Equipment?
At Interphex 2014, Todd and Todd interview Randy Small, Vice President of Operations for the Americas for GoIndustry Dove Bid Liquidity Services. It's no longer considered taboo in the pharmaceutical industry to buy used pharma equipment as an economical way for organization to save money. Through our representation and range of services Liquidity Services has the opportunity to provide surplus solutions for some of the most recognized pharmaceutical companies in the world. Now there is a reverse supply chain in place where companies can create new revenue stream by managing their surplus and obsolete equipment by using a partner like Liquidity Services.
Interview Transcription:
Todd S: Good afternoon and welcome back to Life Science Connect Radio. I am your host Todd Schnick. The countdown continues to New York City and Interphex 2014. We are just days away now and we continue to look forward to this great event.
Leading up to Interphex however Life Science Connect Radio continues with our series of great conversations with some fascinating industry leaders so let’s get right to it. On today’s show is Randy Small. He is the Vice President of Operations for the Americas for GoIndustry Dove Bid Liquidity Services and Randy welcome to the show.
Randy: Thanks Todd.
Todd S: It is good to have you. Thank you for stopping by and joining us. Randy before we get into it really quick tells the audience a little about you and your background.
Randy: Yes Todd as you have mentioned I have been with GoIndustry Dove Bid Liquidity Service for now over 15 years. I have been the Vice President of Operations in the Americas which includes North America, Mexico, a lot of business in Puerto Rico, Brazil and South American companies.
We are a global company but I head up the Americas on the operation side. My team is responsible for cataloging, getting set up for sale, posting those assets to our various websites so that we can maximize return for many of our clients in this industry.
Todd S: Go deep on liquidity services and how your organization plays a role in pharmaceutical manufacturing.
Randy: Really quick; whether due to mergers, acquisitions, down-sizing, upgrading or outsourcing many bio-product companies are opting to sell R&D or manufacturing equipment that no longer is needed in their own labs.
Let me be very clear; it is still in working condition. That is a very important aspect. In this industry right now on the pharmaceutical side it is no longer considered taboo an there is a mainstream option of buying used pharma equipment and it has created economical ways for organizations to save money via the off-loading and surplus that is out there in the market.
In fact more and more companies are taking a proactive approach with respect to managing their surplus causing a consistent year over year increase in the volume of inventory available in the secondary market.
Through our representation and range of services Liquidity Services has the opportunity to provide surplus solutions for some of the most recognized pharmaceutical companies in the world.
Todd Y: Walk us through the exact process of how Liquidity Services acquires these assets. We are not talking about manufacturing burnouts. This is pharmaceuticals. This is serious stuff so I imagine that you have a very meticulous process of how you go about doing this.
Randy: Organizations can no longer afford to deal with their surplus assets. The bottom line is that there is importance placed on sustainability and brand protection as many have taken a proactive approach to managing your surplus and obsolete equipment.
What that means is that the reverse supply chain is in a place where companies can create new revenue streams, protect their brand and begin to build sustainability in their operations.
Once an organization has the dedication to handle all of these aspects in remarketing and the redeploying process for surplus assets the same things can add additional stress to your staff to manage it and to take time away from their core business or basically their day to day real jobs.
Given the time and resources needed to successfully manage your reverse supply chain it is advisable to work with a partner like Liquidity Services who can handle all aspects of remarketing, redeployment and getting incredible partners to increase your bottom line and increase a hassle free way of handling the process.
This includes the important steps of compliance, removal of the assets which is a very big point when you are trying to sell and/or get assets out of a facility which will let your clients have this transparency or efficiency, a global reach to supplier base which is very important in today’s market and the age that we live in, the knowledge of the secondary market itself and a multi-tiered marketing plan to again optimize and maximize return of those assets.
For all of those providers who have invested in global marketplaces and professionally managed and data driven and sell other type of surplus equipment and inventory.
Todd S: This is a win-win scenario here because if you are a manufacturer that needs good equipment that you have given a stamp of approval on that is a benefit but if you are trying to sell or get rid of equipment what a great reliable operation to take care of that.
Like you said the administrative headache that you don’t have to worry about doing the sale and that you can bring on a partner that will really help you do this. That benefits both sides yes?
Randy: It actually does Todd. That is a great point as well. When considering the cost of new equipment or some of the things that you should consider you might find an incredible source, know the condition of the equipment and those first few assets when you think about LSI Services or Dove Liquidity Services many of the assets that we, LSI, sells are from Fortune 500 companies who calibrate continually to upgrade their assets during the cycle life.
Our buyers are savvy and watch for this. They know this but they might buy from a legitimate Fortune 500 company that actually is maintained, calibrated to meet the specs, access sensor needs when you are looking at if the device meets the needs is very important.
There are different purchasing channels; online options, private treaty sales and different forms of sales that are out there in the secondary market; know what your expected savings should be. You should be aware of hidden fees, reinstallation and a lot of times when we talk to people about de-rigging obviously moving from its current location there are hidden fees of just having a mover or a rigger or crate.
I have seen crates cost as much as 5, 10 or 15 thousand or even 25 thousand dollars just to move that 100,000 dollar piece of asset. There are some suggestions right there.
Todd S: I have to imagine that there are not only some best practices in terms of evaluating which equipment to purchase and to make sure that it is suitable for the work required but I can imagine that there are some best practices that a manufacturer should follow when closing an R&D manufacturing facility yes?
Randy: Absolutely Todd and that is where we specialize in. That is where companies seem to be having some of the most trying times right now. It might be their first time in closing a facility anywhere in North America or globally.
We have a lot of expertise in doing that but some things to consider would be outsourcing that many organizations have and will be faced with closing a lab or a plant site. No matter the size there is still the closure and the person tasked with closing a facility is faced with daunting task.
There are millions of dollars in real estate to be addressed, laboratory equipment and research devices that need to be redeployed or disposed of and with that comes any hazardous waste issues and those types of things.
With that comes teams to manage and sort out inventories to be accounted for, adhering to a budget, timeline and environmental safety standards. As soon as you have a confirmation that a lab is closing it is clear to take the first steps and what we really recommend is basis for best practices and putting together a team, establishing what we call a closing team or decommissioning team.
That team, if you are in a facility, should be somebody from head of security or head of maintenance. All of your departments getting a team put together in what we like to call a war room to get your plan and your strategy put up on a wall.
You have a plan for redeployment or the sale of items based on the timeline; establish a budget and timeline is very important. Obviously we do one of the most important things which is to complete an inventory of the facility itself.
Many times we get out to a facility and the first thing that they ask us we know that we have a lot of this on this list but we don’t know what else is out there. That is real world.
A secondary market expert like Liquidity Services may increase your bottom line while ensuring streamline hassle free ways of managing the process start to finish; turnkey. That is who we are. That is the value that we bring to our clients.
This includes taking inventory of the assets, conducting evaluation of the items and creating multi-tiered marketing plan and managing preview of those assets in front of your site, the sale and a compliant removal of the assets after they are sold.
Todd S: Okay well let’s close on this discussion. Talk about some of the common misconceptions to buying and selling used pharmaceutical equipment. What myths can you dispel here?
Randy: That is a great question. We started this process with a major Fortune 500 bio-tech company and 12 years ago or plus. It was around that time frame. If you look 15 years ago there was a hurt for companies to sell surplus equipment on the secondary marketplace. It just didn’t happen.
Even 10-11 years ago you would have never seen a Fortune 500 bio-tech company selling a used device on the same platform as another Fortune 500 bio-tech. It just didn’t happen.
Assets have gone un-tasked. One of the big misconceptions I think many buyers believe is that if an asset is online on the secondary market but the asset must have gone past its life-cycle there must be something wrong with the asset. It is out of scope but these are all misconceptions.
The reason is that because when these Fortune 500 companies, again most of our sellers are Fortune 500 companies in this circle, they decommission, they hazardous decon the assets. They cause the assets incorrectly, warehousing incorrectly for reuse again.
These assets aren’t just put into a corner in the actual environment. Many of them are put in there natural environment and they are stored correctly and again. Because these are Fortune 500 companies and the point is that because they do this, again, our buyers are savvy and something that just did not happen eight years ago or even seven years ago.
We see many Fortune 500 companies now going to the GoIndustry Dove Bid Liquidity website and it is a Fortune 500 buyer and the reason that they are buying from each other in 2014 is because they do know that these Fortune 500 companies are following correct procedures when it comes to decommissioning an asset.
Due to budget restrictions the implementation of business practices, mainstreaming adoption, the buying and selling of used pharmaceutical equipment is no longer considered taboo. It is just not.
It is commonplace for Fortune 500 companies to be purchasing an asset from another Fortune 500 company. We see it every day on our website in today’s market. What I like to use, a term that I used to use in my days when we used to use a mid 90s concept of don’t get a whole bunch of extra parts in your warehouse. Try to create a system where you just have it just in time before you need it and can just replace the part.
That is the way that I attribute assets now when we are selling from Fortune 500 companies to another. They are almost loaning the asset to each other rather than going out and making this million dollar purchase.
They will buy it, use it for a yearlong project and again they bought it from the GoIndustry Dove Bid website, they will use it and they in turn sell it on the website again and another Fortune 500 company will buy it.
We see that happening more and more every day.
Todd S: All right. Outstanding. Randy I hate to say it but we are about out of time. Before we let you go how can people find out more about GoIndustry Dove Bid Liquidity Services Inc.?
Randy: If anybody is really interested we invite them to go to www.go-dove.com. You will see our assets listed there. On the homepage you will see the verticals that we sell including the bio-pharm and bio-tech industry.
Todd S: All right. Randy Small the Vice President of Operations for the America’s in GoIndustry Dove Bid Liquidity Services. Randy it was a pleasure to chat. Thank you for stopping by and joining me.
Randy: Thank you Todd. I appreciate it.
Todd S: All right well that wraps today’s show. We will enjoy seeing you at Interphex in New York City March 18th through the 20th. You can catch Life Science Connect Radio broadcasting live from booth 1265.
On behalf of today’s guest Randy Small, I am Todd Schnick and we will see you soon on Life Science Connect Radio.