Partnership strategies are essential in driving value and performance in sourcing, procurement and supply management. Executives from Johnson & Johnson, Bristol-Myers Squibb and McKinsey & Company shared their experiences during the “Innovation in Sourcing and Procurement” educational session at DCAT Week ’18 in New York in March.
Supplier collaboration is the next horizon with potential to unlock significant value with the right conditions for success, McKinsey’s Saurabh Goyal said. Goyal stressed that a strong foundation is necessary to build strategic sourcing with supplier collaboration to find new opportunities. Trusted relationships should be developed with a selected set of suppliers and strategic suppliers should be identified to maximize value creation potential. Companies should ensure strong commitment with cross-functional internal alignment with the right team and leadership focus, Goyal said.
The advanced sourcing and innovation (AS&I) team led by Jeroen Dubois, director, Janssen Supply Chain Procurement, Johnson & Johnson, is focused on partnering to innovate. Dubois said partnering to innovate is to understand a window of opportunity, to select the right targets to work on together, and to engage in innovation dialogue to invite suppliers to collaborate. Dubois explained that his team practices supplier-enabled innovation with a focus on scouting for new technologies to bring together suppliers to connect and collaborate on targeted scientific and business challenges. The desired outcome is to facilitate the interaction between suppliers and customers to accelerate launch with advanced sourcing support for launch execution. Dubois stressed the importance of “cradle partners” who can develop on a fee-for-service basis.
Essential skills for procurement innovator
Dubois described the skills needed for a procurement innovator as having an open mind, listening and capturing, being a networker, having the ability to create a forum and act as the facilitator, and having a “prepared eye” to see the connection. Further, Dubois noted that serendipity plays a part, too. By knowing what you’re looking for, knowing the problem you’re trying to solve, you can have a prepared eye. Dubois explained that the team works to engage the right suppliers and healthcare stakeholders as early as possible to enhance value end-to-end. The team focuses on specific requirements to drive value creation and mitigate risk in new product development. Value is measured in reliability of supply, quality, environmental health and safety, sustainability, revenue enhancement and total cost.
Value is measured in reliability of supply, quality, environmental safety, sustainability, revenue enhancement and total cost.
Melanie Miller, head of R&D external manufacturing at Bristol-Myers Squibb, shared strategies for successfully managing a molecule from in-house to external production. Miller explained that the pivot point for external manufacturing came when Bristol-Myers Squibb sold its plant in Swords, Ireland, to SK Biotech in 2017. The strategy is a new vision for a new organization and a new way of working with a foundation to innovate, integrate and improve, she said. Partner innovation is very important to move forward and Miller echoed Dubois’ statement that “soft skills” are needed to manage this type of work. Miller agreed with Dubois’ comments regarding “cradle partners,” suggesting development of a core network of partners with a “fit for phase” approach within the network.
Intellectual property (IP) is critical as well, she said, noting that IP security and risk mitigation should be in place across all phases of development to improve speed and agility. Miller suggested co-locating development and scale up. The success factors within external networks include 1) rapid access business models to address need for speed, 2) horizontal integration and vertical integration to reduce variability, and 3) timely resolution of the contract development and manufacturing organization gap between phases I-III to commercialization. Miller said she employs analytics to understand vendor and process performance as a single, unified data set which allows BMS to measure vendor performance across the portfolio.
This article was excerpted from “Highlights and insights from DCAT Week ’18,” a report from the conference written by the author and three colleagues, Joshua Gilpatrick, Michael Glessner and Emily Kimball, all pharmaceutical research analysts at Clarivate Analytics.
About DCAT Week ’18
DCAT Week is organized and hosted by the Drug, Chemical & Associated Technologies Association (DCAT), a not-for-profit, member-supported, global business development association whose unique membership model integrates both innovator and generic drug manufacturers and suppliers of ingredients, development and manufacturing services, and related technologies. Held annually in March, DCAT Week ensures that members have a forum for high-level strategic meetings with key decision makers, timely educational programs, and important networking opportunities.
For additional insights for pharmaceutical companies, contract service providers and suppliers engaged in the pharmaceutical manufacturing value chain, please join our expert research team at DCAT Sharp Sourcing 2018 on June 26, 2018 in New Brunswick, New Jersey. Featuring solution-based practical insights from leading industry experts, specialized educational forums for buyers and suppliers, and networking opportunities, DCAT Sharp Sourcing is an invaluable resource for senior to mid-level executives in pharmaceutical sourcing, purchasing, procurement, and supply management. It is organized by the Drug, Chemical & Associated Technologies Association (DCAT).