Smart Outsourcing: Strategic Alignment, Risk Management, and New Relationships - Outsourcing decisions should be made to foster potential long-term strategic partnerships. - BioPharm International

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Smart Outsourcing: Strategic Alignment, Risk Management, and New Relationships
Outsourcing decisions should be made to foster potential long-term strategic partnerships.


BioPharm International Supplements
Volume 25, Issue 3, pp. s35-s39

Process understanding and control

When a process or product is being transferred, the organization must have the proper level of process understanding and control over that product or process so that it can provide clear, complete, and technically sound specifications to ensure successful transfer.

Elements for achieving process understanding include employing QbD principles and techniques; identifying the appropriate critical-to-quality attributes and associated critical process parameters to limit variability and maximize control; identifying drivers of variation and of interactions in critical processes; and understanding the right process-control strategies.

When older or insufficiently developed processes with a high or uncertain level of variability must be transferred, improved control can usually be obtained retrospectively from conducting a highly structured, statistical analysis of the historic data associated with those processes. Such process capability and control evaluations, if implemented properly, can help achieve an improved level of understanding and control over these older and more variable processes in a relatively short period of time, often in just weeks. The risk of prolonged and costly transfer attempts, or even failure, is thereby, significantly reduced. Achieving process robustness is a critical success factor for right-first-time transfers to outsource partners, as well as successful validation and reliable operation of those transfers.

Sustaining the relationship

Once the operational relationship is under way, the open and honest two-way communications, continued risk assessment, and cooperative problem solving upon which the partnership was first based must continue. This can't be emphasized strongly enough. Too often when outsource providers encounter technical problems or have quality or compliance issues, they tend to conceal those problems from the client while they attempt to resolve the issues on their own. Sooner or later, news of the problem comes to the attention of the client as a sudden and unexpected surprise, with potential negative impact on both the client and outsource partner. What otherwise may have been a minor problem potentially escalates into a major issue, which could have been more effectively managed if the outsource partner had communicated with the client and enlisted their help in a more timely and effective manner. Conversely, clients must keep the outsource provider fully informed of plans that will increase or reduce the volume and level of services that will be required so they can plan their resources and capacity accordingly.

Finally, continue to assess the strategic outsourcing strategy at regular intervals to assure continued alignment with the strategic business goals of the company, the strategic supply chain strategy, as well as with changing patient needs and market conditions. Conduct a regular re-assessment of the performance history and potential risk at each of the partners along with a re-assessment of the entire outsourcing portfolio. This will help assure the continued success of those partnerships, the identification and remediation of any new risks that may arise, and also help to identify additional opportunities for strategic outsourcing as your company continues to evolve and grow.

Questions to be asked during re-assessments include:

  • What are the highest-priority and highest-ROI opportunities for additional outsourcing that will support manufacture of our current products, introduction of future products, and overall strategic business plan?
  • Are there some outsourced projects that should be brought back in house?
  • Has there been a shift in any of our core competencies, technologies, or internal capacity to support our current and upcoming products?
  • Has there been a shift in our company's strategic business or supply chain plans as a result of changing competition, patient, or market conditions?
  • What are the relative priorities, timing, costs, risks, competitive advantages, and ROI of making a change in our current outsourcing strategy? What if the change isn't made?

The bottom line is that today's outsourcing decisions should be thought of as potential long-term strategic partnerships in support of an overall strategic supply chain strategy, and aligned closely with the business goals of the company. Decisions should be based on a solid business case, technical, and quality foundation that is further supported by a robust risk-based assessment and management methodology. Only then can the most important requirement of all on both sides of the relationship be fulfilled, thereby protecting and enhancing shareholder value.

WILLIAM SCHMIDT is vice-president at Tunnell Consulting, Inc. and IAN UYDESS, PhD, is a managing consultant and project manager at Tunnell Consulting, Inc.
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