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

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Achieving Cross-Functional Supplier Integration: A Case-Study Analysis
The article examines a cross-functional supplier integration model to facilitate project management.


Pharmaceutical Technology
Volume 35, pp. s54-s58


Figure 1: The major elements of an alliance-based outsourcing model.
The model is designed as a modular chemistry, manufacturing, and controls (CMC) system and entails three major elements: expertise, program execution, and accountability (see Figure 1). The single point of entry, along with CEO-level support from each alliance member, creates a clear line of accountability for a project. The program execution seeks to bridge the traditional functional gaps that can occur in the interface between API development and manufacturing, formulation development, and finished drug-product manufacturing. Gantt charts, which are a common tool used to plan and schedule projects and which offer a graphical representation of the duration of tasks against the tasks' progression, reflect the improved coordination and interdependence of the functions of each alliance member (see Figure 2). They are customized to a given project, and the various tasks and are designed to maximize flexibility.


Figure 2: Example of a coordinated Gantt chart in an alliance-based outsourcing model.
This alliance-based outsourcing model seeks to address a common problem among contract service providers working on a given campaign. "The simple fact is that service providers typically don't talk to each other, and this is one of the leading causes of poor project execution and delay," says Scanlan. "It is a basic question from a sponsor company, 'Why aren't my outsourced service providers talking to each other?' It sounds like common sense that suppliers communicate, discuss timelines and set expectations for project flow, but this may not be the case."

In the Chemistry Playbook model, a single point of entry among all alliance members handles the confidential disclosure agreements, proposals, master service agreements, and project plan. "The partners will do all the work to get the agreement signed," says Scanlan. The commercial aspects of a program, such as terms of agreement, payment terms, termination clauses, intellectual property, limits of liability, warranties, and identification clauses are harmonized among the alliance partners. Invoicing is flexible and can be billed in step-by-step mode and electronically. Cross-company teams with defined handoffs in the project cycle are used to bridge any functional gaps that arise in a traditional or nonalliance outsourcing model.

Derek Hennecke, CEO and president of Xcelience, says that this partnership model seeks to minimize "deliverable bias" by emphasizing project ownership that entails full responsibility for integrated project management and timelines while preserving the advantage of the functional-area expertise offered by each company. The partnership acts as a one-stop shop, but with streamlined timelines, as agreed by a sponsor company and project manager of each of the partner companies. The amount of individual project-manager presence is determined by the phase of the project. The Gantt chart, which shows the project's schedule, deliverables, and project timelines, are shared among all functional areas to prevent the common problem of silo creation, whereby each service provider views only its aspect of a given project rather than the goals and timelines of the sponsor company's entire project. "In the alliance model, there is a natural pull of projects through the system due to each partner's individual accountability," says Hennecke.

As with any effective outsourcing project, constant communication flow between technical and regulatory areas of expertise is crucial. In the playbook model, real-time feedback loops across the entire development program are developed to facilitate and achieve the regulatory and technical interface required for successful project execution. Scanlan adds that the alliance model for the Chemistry Playbook supports various outsourcing business models. For example, it is appropriate for emerging bio/pharmaceutical companies that lack internal CMC support and operate as a virtual model with limited internal assets, which would also include early-stage start-up companies. The model also is appropriate for the large pharmaceutical companies that moved to a virtual model for a given project.


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