Achieving Cross-Functional Supplier Integration: A Case-Study Analysis

The article examines a cross-functional supplier integration model to facilitate project management.
Jul 31, 2011


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Effective project management is an ongoing task for sponsor companies and contract-service providers. For a given project, a pharmaceutical company may be tasked with managing the timelines and deliverables from several vendors engaged in disparate functions, such as process development and manufacturing of active pharmaceutical ingredients (APIs), formulation development, and finished drug-product manufacturing. The success of each of these functions is interrelated. The availability and quality of APIs, for example, directly affects the timeline for delivering a quality formulation and finished drug product. Cross-functional supplier integration is becoming more important as pharmaceutical companies respond to an increasingly cost-competitive environment and seek ways to optimize their external development and manufacturing functions .

"The global pharmaceutical industry is undergoing a period of rapid change," explains Brian Scanlan, CEO and president of Cambridge Major Laboratories, a contract API manufacturer. "Big Pharma is divesting assets and taking on a more virtual model shared by the majority of the emerging pharma sector. With this change also comes opportunity—an opportunity to set a new model for API and drug-development sourcing," he says. This new model is predicated on improved cross-functional supplier integration to create a so-called "virtual one stop-shop," which relies on increased communication and project management among suppliers. "This virtual one stop-shop has distinct advantages to the traditional one-stop model. Specifically, that individual best-in-class suppliers can come together to achieve the common goal of getting the client's molecule to market faster," he explains.

Cambridge Major Laboratories is a participant in such a model through an alliance established with three other partners: Xcelience, a contract provider of formulation development and finished drug-product manufacturing; Micron Technologies, a provider of cGMP micronizing and milling; and Beckloff Associates, a scientific and regulatory consulting firm and subsidiary of Cardinal Health. Under the model, named the Chemistry Playbook, each company is independent and responsible for its own activities and project management, but a prospective sponsor company, if it wishes, can use the complementary service offerings of all or some of the partners. The model brings together the functional expertise of each alliance member but with enhanced cooperation, such as by providing a single point of contact among all the contract-service providers for the sponsor company and offering integrated commercial and billing processes.