William A. (Al) Kentrup, VP Global Quality Compliance and Systems, Takeda Pharmaceutical Company, a former director of corporate quality at Procter and Gamble (vice president of quality for Sandoz (Novartis), and who’s also held quality leadership positions at Pfizer (Wyeth)), fits his years of experience with the external supply chain into three easy pieces: Communication, Transparency For Problem Resolution, and Benefit Sharing.
I caught up with Kentrup while he was in Cambridge, Mass, visiting Takeda facilities there (Takeda Oncology and Takeda Pharmaceuticals International), and just prior to his flying out to the FDA/Xavier Health PharmaLink conference in Cincinnati, Ohio. He was kind enough to take the time to explain his thinking to Outsourced Pharma readers.
The “Three” Of Knowledge
“My three pieces for working with contractors and external supply-chains start with communication, which needs to be frequent and run on open channels,” begins the soft-spoken Kentrup. “Along the way, when there’s a challenge faced by either the owner or the contractor, this will ensure a mutual transparency.” That transparency, he says, is not specifically focused on sharing information, “but on finding solutions – transparency for the explicit purpose of problem resolution.”
Which then leads to a sharing of benefits. “A big pharma – or consumer goods company – will launch internal operational-excellence initiatives, and lean processes to improve plants, and provide competitive advantage,” Kentrup explains. “I think in most cases we can take those learnings and engage our targeted third-party suppliers to help them improve their operations as well.”
How closely aligned would this look ideally? Kentrup says it goes as far as sharing specific experiences – even training materials – and “bringing the outside in to actually see what we’ve done, giving them some coaching and counseling to help them enact similar programs.” In other words, impart the knowledge and provide the tools by which outsourcing partners can improve their productivity, efficiency, and quality. This, he says, works better than just saying: “Give me X% savings, and I really don’t care how you do it.”
Kentrup emphasis this also forms a two-way relationship of “problem-solving and knowledge-seeking.” He explains: “Suppliers may have a wealth of knowledge – more than that of a name-brand company – because of the frequency and diversity of customers they work with. When we say we need a certain amount of lactose, as an easy example, CMOs should ask what we need it for specifically … so sharing and seeking knowledge to allow for the building of that relationship, as opposed to a pay-as-you-go, and a ‘reduce, reduce, reduce’ mentality towards suppliers.”
Time For Transparency, Less On Communication
Kentrup credits his experiences in the consumer goods arena, as well as at various pharma companies, with fully forming his outlook on outsourcing. He recalls from his past when companies developed systems whereby their supply chain – their CMOs – directly logged into the owners’ systems.
Interestingly, says Kentrup, this transparency alleviates the need for various other communications. “Think of the barriers this takes out,” he says of having vendors share data and other systems. “There’s no change control communication, change control review, or outside approval process at the third party. It’s reviewed, approved, and then made effective within the same system. The third party is obligated to react, respond, and put the chance in place immediately.”
Unfortunately, Kentrup says such access is still rare within the pharmaceutical industry. He does believe, though, the existence of these systems in other industries are in fact “an indicator of the type of transparency that will be coming to the pharma industry.”
This fuller transparency will lead to the problem-solving Kentrup says should be an ultimate goal. He provides the example of a commonly used deviation system that major pharma companies have for their internal sites. “But then they also expect their supplier to have a similar control system, whatever it might be,” and thus reducing effectiveness and productivity at both locations.
“Think about the opportunity to simply create a module on our existing system that CMOs can log into and use, so they’re not burdened with the cost of that system implantation,” he says. “So, savings for them, which should be a savings communicated back to the owner of the product. You gain that transparency of knowing – without even asking – what deviations are open and for how long, and what the issues are, all without having to go through other systems, change control processes, phone calls, audits, follow ups, things of that nature.”
In other words, more transparency leads to less – but better – communication. Now, about that mutual sharing of benefits.
Learning To Share
Once a Big Pharma – or any drug-developer – breaks down the barriers between itself and selected members of its supply chain, attitudes begin to change.
According to Kentrup, drug-owners start to feel “if it’s good for you [supplier], it must be good for us, and that sharing gets passed back and forth. It’s not just when suppliers have a savings they pass it back to us, but when we have a savings we do the same.”
For example, says Kentrup, “if a drug-owner figured out it can do with less of a material, and thus enable a CMO more flexibility to provide other customers this cost savings at their facility, we should work that out.” He says there might be cases where Pharma provides rebates back to CMOs for X number of months of sustainable supply without a certain deviation rate. Whatever it is, “you set up rewards for your suppliers consistent with your internal rewards mechanism. So rewards are also shared.”
Of course Outsourced Pharma readers – on both sides of the supplier-sponsor relationship – know about the ideals of communication, transparency, and shared benefits. But when a veteran like Kentrup fits them altogether, it really makes us stop and think: Why aren’t we practicing more of what we preach?
We’ll continue our discussion in Outsourced Pharma with William A. (Al) Kentrup, VP Global Quality Compliance and Systems, Takeda Pharmaceutical Company, in part two, when he’ll talk about the roles of procurement and quality in outsourcing decisions at pharmaceutical companies.
More on The FDA/Xavier Health PharmaLink conference:
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