Optimizing a Supply Network - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Optimizing a Supply Network
Pharmaceutical-industry executives from Merck & Co., Pfizer, and Covidien share their perspectives on their expectations and evaluation in the preferred-provider relationship. Read this and other preferred organization articles in this special issue.


Pharmaceutical Technology
Volume 35, pp. s12-s16

Best practices

PharmTech: What would you identify as some of the best-practice approaches that a contract service provider should take into account when seeking to be a preferred provider? Can you offer some examples from the industry or within your company? How important is innovation from the preferred provider to the sponsor company in evaluating the contract service provider's performance?

Scheftel (Merck & Co.) In our experience, the contract-service providers who can differentiate themselves through greater customer focus, higher levels of quality and supply performance, and lowest overall cost, are the best positioned to become preferred providers.

A best practice we have observed at Merck is exhibited by one of our most valued preferred providers. On a regular basis, this supplier brings innovative cost-improvement ideas to Merck across the portfolio of products it produces for us. Many of these ideas have been implemented over the last five years, with savings shared between Merck and the preferred provider. As opposed to suppliers who regularly propose cost increases, this preferred provider has seen a steady stream of new projects and an increase in revenues of greater than five times. Innovation is a key part of the success of this particular relationship.

Lynch (Pfizer): The key word is "trust." The sponsor/strategic supplier relationship is a two-way street, and both parties must benefit in order for it to succeed. Both parties must be willing to trust one another in order to develop and conduct the relationship in such a way that supports and advances business goals on both sides of the equation. Address expectations, define responsibilities, determine mutually agreeable criteria for defining "success" and create a dialogue around potential "pain points" (e.g., cost and expectations around sponsor/supplier communication) at the front end. Reopen the dialogue at regular intervals as the relationship progresses, assess progress, and adjust as needed before minor issues become stumbling blocks.

Covidien (Evans): The simplest response from a supplier's perspective is that we really need to "walk the talk" when it comes to our value proposition with our customers. When we do this, it becomes our best marketing tool for building more strategic relationships with customers. For example, many customers inquire about how we view the future of our business. We routinely highlight to them the longer-term contractual arrangements which we have in place with key customers to illustrate our commitment. This reassures them. As the adage goes: It is not so much what you say that matters but what you do.

Innovation can be a tough thing to measure, and its importance can vary from one case to the next. When it comes to new ideas, it always takes a bit a leap of faith by both parties to work together and be confident that good things will result.


ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
What role should the US government play in the current Ebola outbreak?
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Finance development of drugs to treat/prevent disease.
28%
Oversee medical treatment of patients in the US.
9%
Provide treatment for patients globally.
9%
All of the above.
41%
No government involvement in patient treatment or drug development.
13%
Jim Miller Outsourcing Outlook Jim MillerCMO Industry Thins Out
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerFluorination Remains Key Challenge in API Synthesis
Marilyn E. Morris Guest EditorialMarilyn E. MorrisBolstering Graduate Education and Research Programs
Jill Wechsler Regulatory Watch Jill Wechsler Biopharma Manufacturers Respond to Ebola Crisis
Sean Milmo European Regulatory WatchSean MilmoHarmonizing Marketing Approval of Generic Drugs in Europe
FDA Reorganization to Promote Drug Quality
FDA Readies Quality Metrics Measures
New FDA Team to Spur Modern Drug Manufacturing
From Generics to Supergenerics
CMOs and the Track-and-Trace Race: Are You Engaged Yet?
Source: Pharmaceutical Technology,
Click here