The "Outsourcing Master Class": 10 Modules For Success
By Louis Garguilo, Chief Editor, Outsourced Pharma
Darren Dasburg didn’t write the book on outsourcing. He did, though, design and teach the defining class on the subject.
The year was 2006, and drug development and manufacturing outsourcing was about to take off into the realm of the ubiquitous, although under-conceptualized and not fully understood.
Dasburg had been asked to design the “Outsourcing Master Class,” a capstone-case-review, team-based course delivered over four days. He personally taught the class to workers from all industries on the campus of the University of North Carolina for a number of years. The course was sanctioned by the International Association of Outsourcing Professionals (IAOP), and is still taught to this date.
Dasburg has spent 14 years at GSK, nine in consulting, a decade at Medimmune/AZ, and currently he’s CBO, CRISPR Biotech. Since the inception of the master class, he has fastidiously applied the concepts in all those roles.
We’ll cover the first five of the 10 modules here in part one, and the final five in part two.
We’ll also find out from Dasburg if any need to be updated, and which he now considers the most important.
I have re-titled the modules and edited some of Dasburg’s commentary.
Ten Modules Of Outsourcing (1 ~ 5)
1. Outsourcing As A Practice
Module one focuses on defining and communicating outsourcing as a practice.
“It's one thing to say, ‘We want to go purchase this service,’ but another to be a company that actually deploys this decision with a facilitated process, known reasoning, and clear communications, so the entire company understands what it means.”
Ask yourself if you have ever simply wanted someone “to buy our mess for less.” If so, you need “a deeper way of making this activity of outsourcing structurally sound.” This defining and communicating permeates the other nine modules.
Deciding to go external can draw different initial reactions in your organization, both positive and negative.
“If you say, ‘We will outsource manufacturing,” does that mean the CMO becomes the preferred center of activity, and my manufacturing people are not going to be working here one day?’”
There are many ways to practice outsourcing. Ultimately, though, how it is strategized and implemented can have unseen impacts and influences on an organization – particularly if you haven’t thought this through deeply.
2. Develop An End-To-End Process
No topic should enter into an outsourcing discussion unless it follows a set and thorough company process.
“It’s the Chevron model,” says Dasburg, selecting a system of thought perhaps few are familiar with. “People say, ‘We’re thinking about outsourcing.’ Actually, they aren’t, because they haven’t even entered stage one – outsourcing isn’t fully endorsed anywhere in the company.”
“Stop right there. Don't proliferate that rumor. The decision for action must go through a five step process to meet all the requirements of end-to-end good governance.”
3. Strategy Integration
Important to all, but perhaps most acute for larger organizations, is integrating the outsourcing process into your business strategy.
“If you're growing 20% annually, and going into different marketplaces, and you are harvesting talent in certain parts of your organization, these things dictate your strategy, and the outsourcing needs to be a piece of that,” explains Dasburg.
If you are a drug developer that has traditionally promoted employees out of R&D to leadership, “it would be foolish to outsource those R&D pieces. That's where your internal talent emerges.”
Conversely, you should outsource the functions from which the future of your company is not driven.
“Let's get your strategy straight,” says Dasburg. “Let’s position outsourcing for certain things, and ensure it's clear we won’t be outsourcing others.”
Manufacturing is a key example, because often there are components of the process you may want to keep internal.
Dasburg recalls his time in big pharma when the EVP of Manufacturing was famous for saying he wanted to do the packaging for products.
“This executive thought that was the critical thing,” says Dasburg. “API and other manufacturing practices were outsourced, but we had dozens of plants around the world predominantly performing packaging work.”
“Subsequent leadership did not see it that way and change was inevitable …. another reason to look at outsourcing continuously.”
4. Create Leadership Teams
“If you plan to go into this outsourcing practice,” says Dasburg, “you better have some people who know what they're doing, can lead the company through these stages, and answer the questions that ultimately the board will be asking.”
While you may have many people capable of project management, do you have talent willing to create a new way of doing business? Can these people handle the stress of others in the coming telling them, “You can’t take my job or team away”? Can they mesh both internal and external communication skills well enough to be seamless to current operations?
Finding these special resources is not easy, a reason says Dasburg, hundreds have come through his class since it began. These professionals tend to be “entrepreneurial sorts,” those who love change and can articulate the business case.
Outsourcing leaders are paired ideally with internal SMEs and any residual team members that will oversee the outsourced function – similar to contract manufacturing teams operating within many pharma tech-ops organizations.
5. Develop Business Requirements
Many businesses get into outsourcing as an attempt to save money, avoid staffing up, or building labs and facilities.
"Fine," says Dasburg, "but let’s get those goals clearly set down as an understandable set of business requirements.”
For example, does not wanting to build now imply you will never want to build? Is outsourcing a stopgap to get stronger internally, or grow into a portfolio?
As more thought is applied to the business requirements (viewed long-term and strategic), an organization might conceptualize something creative, such as the following:
You start working with a competent CDMO, but one without the future capacity you’ll need. You ask them to build a facility, and under certain conditions and timeframe, you agree to buy it from them and transition your staff over (i.e., “build-operate-transfer” strategy).
Dasburg says strategies such as these were of great interest to CDMO executives who attended the original classes he taught in the mid-2000s. “They came to the class searching for ideas to offer more innovative strategies to their clients,” he recalls.
He also has an amazing example of this module in practice – regarding MedImmune and Merck – which we’ll detail in subsequent editorial.
Next up, though, are modules 6 - 10 in our outsourcing master class. Don't be late.