You're In Charge Of Strategic Sourcing? What's That Actually Mean?

By Louis Garguilo, Chief Editor, Outsourced Pharma

Let’s continue our discussion on strategic sourcing with some best practices presented to me by professionals focused on that discipline and who specifically include the word "strategic" in their titles.

These professionals universally attest to the premise that the first best practice to strategic outsourcing is ensuring you and the internal sponsor of the needed outsourcing services or materials have internal alignment on goals and visions for the external collaboration.

That’s a mouthful in one sentence, but when outsourcing to CDMOs this internal alignment must start with well-defined KPIs (key performance indicators).

Well-defined and clearly understood, because the next best practice is effectively communicating those expectations as tangible targets to the CDMO. And then staying with that communication effort until you are certain you have gained mutual understanding, and expectations with your external partner are aligned.

Next, closely monitor those KPIs over regular moments in time.

“Monitor” internally to stay assured your originally set path and procedures are still the right ones; things do change during development and as clinical-trial results come in subsequently, as well as conditions at you external provider.

For strategic sourcing organizations this might very well mean implementing a comprehensive, quarterly business review meeting. However, the cadence of meetings will vary depending on projects and other contingencies.  

These provider-sponsor huddles, from a business as well as science/technical perspective, should be guided by these types of questions:

• What have we achieved?
• What did we agree on that is that still valid; What is not?
• What's working and what’s not?
• Where can we improve?
• What needs to be changed?

Consider these get-togethers as monitoring over time, and include one final moment.

Another best practice is taking very seriously a final project – and relationship – review.

Experienced professionals know there is the urge to skip over this concluding step – or to simply go through the motions. Everyone is ready to get to the next thing as soon as possible.

However, strategic professionals say it's a high-value contribution to end each project by carefully evaluating what worked well and what didn’t, and take those learnings into those next activites and projects at the current or future CDMOs.

Day-To-Day Operations

For those specifically tasked with the strategic and company-wide aspects of supply chains and outsourcing, Good Governance can save you from exclamations of Good Heavens! when sudden and unexpected challenges reveal themselves. 

Even in that strategic-sourcing role within an outsourcing biopharma organization – and depending on the phase and criticality of activities – good governance can include nearly day-to-day or weekly communications with counterpart stakeholders directly involved in projects.

Certainly, many meetings won’t specify a need to involve strategic sourcing individuals; some are set to be populated by quality, regulatory, and project-level team members.

While these meetings are more operational in nature, they do require an escalation mechanism. A strategic asset current with those day-to-day arising challenges can facilitate the bringing of such hurdles to a joint steering committee or more senior management oversight.

Strategic supply officials will recognize that executive leadership, finance and legal, will have their priorities and recommendations while the supply strategist continues to focus on managing the vendor relationship (see part one).”

As one strategic VP told me:

“My presence can be helpful in various technical meetings. I can be the oil in the machine to reach certain resolutions, instead of where technical people typically focus on the technical discrepancy and issues.

“My role is to focus on the management and partnership, and try to get mutual understanding internally, and between sponsor and CDMO, and to ensure what we decide aligns with overall business goals”

Summing Up The Strategy 

Combining our two editorials, we can assert that in fact strategic outsourcing does deal in details – but perhaps not the specific tasks or tactics to take care of those.

The increasing number of folks nowadays with "strategic titles" represent the value in an organization's business-review oversight, and a focuse on programmatic progress and B2B aspects in relation to external partners.

And this should always include an eye towards  future opportunities, or perhaps combining ongoing projects and suppliers across the organization.

In a phrase, we are talking about a highly credentialed superintendence of supply.

And whether, as noted ealier, you go it alone or you have an entire strategic team, work within your established “good-governance structure,” and as required as a member of project teams.

But keep your eye on the entire supply horizon, and the corporate mission.

“Typically and ideally,” said one executive, “the CDMO we select for phase one can actually help us until the commercial stage. You want to build on and potentially grow that relationship because of all the learnings acquired in those earlier phases."  

“From that perspective, my expertise as a strategic supply professional helps guide us go that distance.”

And I believe readers will agree we’ve gone the strategic distance with this two-part investigation. “Strategic” is an adjective in vogue. Here’s hoping we make it as meaningful as possible.