Posts Tagged ‘outsourcing’

A Key to Successful Partnerships that Can’t Be Ignored

April 8, 2010

In our last post we spoke about a life sciences company who needed to replace an unresponsive kit-fulfillment partner.  This partner’s lax adherence to quality standards meant that many expectant parents did not have the complete kit they needed to benefit from the services they had purchased.  The life sciences firm replaced them with a partner who enjoyed a good reputation for hospital print management and medical device marketing support programs.  But they had virtually no experience in life sciences fulfillment.  What advantage could this new partner possibly offer that could help them to overcome their inexperience and beat out nine competitors to win the contract?  How has this decision turned out?

 Experience is the Most Important Key, or Is It?

 A number of articles on outsourcing cite experience as the most important key to successful partnerships.  Is that always the case? In Blink, bestselling author Malcolm Gladwell relates how Paul Van Riper, former head of the Marine Corps University in Quantico, Virginia once brought a dozen Marine Corps generals to the Mercantile Exchange in New York to visit the trading floor.  The madness of the trading floor reminded him of a military command post at the height of battle.  When trading ended for the day, the generals took to the floor to play trading games.  Then they took a group of Wall Street traders across the harbor to the military base on Governor’s Island to play war games.  The result?  According to Gladwell, “The traders did brilliantly.  The war games required them to make decisive, rapid-fire decisions under conditions of high-pressure and with limited information, which is, of course, what they did all day at work.” 

The key trait here was not experience – the traders had never been to war college.  It was the ability to make good decisions under pressure despite having limited information.  Many captured military officers understand battle strategy. The victors are often those who can quickly translate that knowledge into action.  In a similar way, a successful program to build, ship and track life sciences kits required sterile facilities, thorough knowledge of the process, a high quality fulfillment program and an excellent inventory and shipping management system.  A company with brains and determination could acquire the first two if they had the others already in place. 

 A Most Important Key to Success

 The new partner had one more trait that virtually guaranteed their success:  an absolute commitment to customer satisfaction.  An executive in the life sciences company knew a team member at the firm.  That relationship started the dialogue between the two companies.  As they met, the life sciences company executives could see clearly that their potential partner possessed something their current fulfillment vendor lacked – genuine character.  That trait was evident in:

  • The CEO who guaranteed his company’s commitment to make the program succeed
  • The Vice President of Operations who thoroughly researched the life science company’s needs and procedures
  • The Fulfillment Center employees who would carry out their new procedures as if their lives depended on it

This organization was determined to make things work into the indefinite future.

 The Results

 At the end of the first year of this new partnership, the life sciences company compared the costs and liabilities of their relationship with their old fulfillment partner to their partnership with their new fulfillment vendor.  The audit found that the new partner, by dramatically improving accuracy and service, had actually added $1 million to their bottom line.  “We are very fortunate and appreciate the collaborative relationship we have…which is based on mutual respect, confidence and trust,” wrote the life science company’s Vice President of Regulatory Affairs and Quality Systems.

 How did the new fulfillment partner manage to improve things so much that they added a million dollars to their client’s bottom line?  Click here to email me and I’ll send you the White Paper, One Biotechnology Company’s Search for Success with a 3PL Partner.  It will answer that question.

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The Keys to Successful Partnerships – Have You Considered All of Them?

April 1, 2010

Outsourcing is often a way of life for many biopharmaceutical, medical device and life sciences firms.   They often outsource clinical research or portions of their manufacturing process.  They may contract with partners who supply backroom functions like I.T. and human resources.  The quality of the partnerships they form can have a big impact on the atmosphere and profitability of the company.  But are all partnerships created equal?  Much has been written about the elements needed to make outsourcing work for your company.  But most authors have left out one of the most important factors.  Have you considered it in your company’s outsourcing decisions?

 What are some keys to successful partnerships?  One obvious key is the partner’s ability to deliver on their promises, to efficiently perform the work they’ve been contracted to do. Clearly, if an outsource contract is for a key aspect of research or manufacturing, it must be done properly or the results can be disastrous.  This is even true for more mundane backroom tasks that have been outsourced, not to enhance capacity but primarily to save money. “If those mundane tasks aren’t done properly,” writes Elizabeth Gardner in The Job That Doesn’t Go Away, “savings can evaporate.” Gardner cites a recent PricewaterhouseCoopers survey in which more than 50% of the companies studied said they weren’t realizing the savings they had expected from outsourcing.

 How could this happen?  If outsource partners have the necessary skills, facilities and capacity to perform the work, what could possibly get in the way?  One potential pitfall is the partner’s quality standards and belief about what constitutes acceptable work. 

 One life sciences company provides a potentially life-saving service for newborn infants.  They contracted with a seemingly well qualified fulfillment partner to assemble kits and send them to expectant parents who requested them.  That partner had the necessary sterile facilities as well as experience in life sciences fulfillment.  Unfortunately, they didn’t share the company’s quality standards and commitment to customer service.  Kits were often sent out missing key components.  The vendor refused to send anything out after 2:00pm; kit orders that came in after that had to be filled by the life sciences company’s sales department.  Executives made a number of requests for changes, but the vendor was unable to implement them.

 Clearly, this life sciences company needed to select a new partner.  The partner they chose had substantial experience in running fulfillment programs for healthcare organizations and hospitals as well as marketing support programs for medical device manufacturers. But this organization had little experience in life sciences fulfillment. Selecting them was a bit of a gamble.  What did the life sciences company see in their new partner that could compensate for their short résumé in this vital area? That organization may have won awards for managing hospital print management programs.  But what could help them effectively handle critical, time-sensitive life sciences fulfillment?  How have things turned out?  Stay tuned.