Posted on: 26th March 2019

Establishing best practice guidance for outsourcing

Established in March 2017, the Development Group’s Development Outsourcing effort aims to share and build guidance that will help companies make the best decisions and understand what to do in the areas of make vs buy, supplier selection, supplier management and oversight, governance and risk management and how to be a good customer.

Having initially explored the diverse topic of contract development and manufacturing organization (CDMO) performance and relationship management, the team’s primary focus became the use of a balanced scorecard (BSC) to measure performance.

Along the way, the team has also benchmarked on CDMO process/technical data transfer and sourcing organizational structures and decision-making across member companies.

What has been delivered?

The team has looked at four case studies (Merck, Pfizer, Roche and Sanofi) regarding a BSC approach, using these inputs to develop a spreadsheet-based tool that each subject matter expert could customize as required for use within their own organization.

Having already implemented a BSC, Kooper Brown, Associate Director, External Collaborations, Process R&D at Merck, explained the benefit for his company of developing the tool further, “The value was to gain an insight into some of the different questions and areas of concern that other companies have, and to be able to at least think about those, if not incorporate some of them into our own framework of questions.”

As for the benefits of using a BSC for the industry as a whole, Brown added, “For others that have not [implemented] a balanced scorecard to measure the outcomes of their relationships, then this could be really valuable. It gives them the basic framework to start with, which they can then tweak to their own advantage.”
The need for the BSC to be flexible was paramount. Brown explained, “We each operate under our own constraints within our own organizations, so having something that is rigid would not be useful to anyone. It needs to be flexible to have the widest benefit.”

The team plans to review the tool’s usage in mid-2019.

The benefits of sharing

Joining the team has been extremely beneficial for Brown. He explained, “I’m in outsourcing and it’s dear to my heart … It’s definitely a great way to share best practices, lessons learned and then to benchmark what we’re doing versus what other major players in the industry are doing.”

While collaboration takes a lot of organization, the results are worth the effort. Brown said, ”It’s tough to manage a group of ‘type A personalities’ from the industry and try to come to some kind of consensus on what we even want to talk about – because everyone has different backgrounds – but I think it has been a success and I really like how it has been managed. It’s definitely ambitious but it’s definitely been working.”

What’s next?

The next topic for discussion is strategic/collaborative partnerships, with the aim to develop a best practice approach to identifying, building, maintaining and dismantling such arrangements.

For Brown, the key steps to achieving this are, “What does a true partnership mean? How do you get there? What does it look like? We are feeling out the team and finding out what different experiences there are. We’re trying to get some case studies from people that have had successful, or maybe unsuccessful partnerships, [to enable us to] take the discussion forward.”

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