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.CMOs' perspectives
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).