Outsourcing by bio/pharmaceutical companies is increasing in volume and scope, but what are some factors that may constrain
growth? Effective communication and effective relationship management, from both a sponsor company and contract manufacturing
organization (CMO) perspective, pose a potential bottleneck to realizing the potential of outsourcing.
Even before the current economic downturn, biomanufacturers said that "establishing a good working relationship"
was the most difficult and challenging aspect of outsourcing (1). As outsourcing expands, CMOs and client companies will need
to improve their respective skill sets to manage these external relationships. The great majority of CMOs surveyed in BioPlan
Associates' 7th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production said their customers had unrealistic timeframes (82% said so) and lacked the ability to communicate effectively (80% said
so). The survey included 327 individual respondentsat biopharmaceutical manufacturers and CMOs in 35 countries.
Insufficient communication is a well-documented managerial problem. Managers must be able to lead in a highly dynamic environment
and create an organization where communication effectively flows at all levels (2), which is sometimes a skill set not adequately
developed by biomedical scientists in managerial positions. Academic entrepreneurs account for 43.1% of founders of biotechnology
companies, a level that is far greater than any other industry (3). There may be some correlation between this predominance
of scientists in managerial roles and the relative success of biopharmaceutical organizations as businesses.
Perhaps as a result of the growth in outsourcing, problems in the client–contractor relationship continue to expand. The 2010
BioPlan study identified 11 crucial issues that CMOs cited as the most common mistakes made by their clients (i.e., biomanufacturers).
CMOs cited two main points: "clients don't plan their technology-transfer process" and "clients don't communicate with us
Operational issues are also crucial. Seventy-eight percent of the CMOs surveyed said that "clients wanting to contain cost
by doing limited development runs but still expecting successful full-scale manufacturing" was either a "very important" or
"important" problem. This issue involves cost containment and time-to-project completion. It also suggests that the majority
of biomanufacturers, who are under increasing cost and time pressures, are pushing that stress onto their suppliers. The second
relationship problem involves unrealistic expectations: Forty-six percent of CMOs cited as a "very important" concern that
"clients don't build in sufficient time for the project" (i.e., unrealistic timeframes).