NordLab is a consortium of public utilities owned by five northern hospital districts, which acts as a laboratory center for the whole of Northern Finland and provides high-quality laboratory services to the region with the help of its 680 laboratory professionals. NordLab’s regional laboratories are in Kajaani, Kokkola, Oulu, Kemi and Rovaniemi. In addition, sampling and point of care analysis are performed at more than 50 sites. NordLab serves almost one million Finns, providing about 10 million diagnostic tests annually.

What were the challenges?

At the outset, NordLab’s regional laboratories used different costing and pricing practices, which were to be harmonized and managed using a single holistic cost model. NordLab was aware of the differences in profitability between the regional laboratories but was unable to see their root causes in a reliable way. The large geographical area of operation also requires a lot of logistics related to the transport of samples, and transparency was needed for this.

Fragmentation of the information systems and the need for unstructured data collection presented a challenge for effective data collection process and unification. In addition, a transparent and causal allocation principle of shared services was seen critical.

How we helped?

Key features of the solution:

  • All locations and processes are modelled throughout the organization: from cost equivalence to external accounting
  • Calculations are performed at the most granular level possible: individual test transaction
  • Full Profit and Loss view for all key dimensions, e.g. test transaction, customer (billable), sub-product, product, workstation, department, and location were obtained
  • Sampling logistics were modeled, and shared services are allocated to all operations
  • End-to-end capacity utilization view; enabling resource management
  • Reporting of results: Power BI and OLAP cube

What are the results?

Armed with the solution, NordLab can continuously evaluate its operations and identify development needs at several different levels. The calculation also includes predictive what-if analysis, which enables the assessment of profitability and operational impacts in advance. The service model responds to calculation and pricing requests for new products and different cost analysis as needed. Product specific cost information is utilized in the annual price list simulation, which is used to determine changes to the following year’s price list.

In addition, the modeling measures capacity by workstation and department, which can be utilized to manage and plan resource allocation. All in all, the solution brings cost transparency to operations and supports critical decision making needs.

Contact us