Handling Complex External Supplier Footprints

When managing a large network of suppliers, it is important to establish well balanced criteria in order to segment suppliers by their purpose. This allows for a more tactically organised supplier database with the top partners serving as candidates for strategic partnerships.

In regards to the balance between strategic and transactional partners, the usual split is said to be around 80% transactional, 15% preferred and 5% strategic partners. The strategic partners provide a much higher level of oversight into the end-to-end manufacturing process and the partnership is much more likely to bring mutual long-term benefits.

Strategic Partnerships

Strategic partnerships can allow for enhanced operational collaboration with specific CMOs, many attendees saw the opportunities fro strategic partnerships as ‘open ended’ and ‘without limitations’. Within these partnerships there is a need for financial transparency in forecasting and strategic opportunities in order to create shared value within the relationship. It is useful for Pharma companies to develop tools and processes that can facilitate greater efficiency with their chosen strategic partners. Holding value creation workshops with suppliers is a good way to outline this from the outset and define the value creation opportunities within strategic partnerships.

Selecting your partners

Robust supply point governance with solid processes and strong leadership is needed during the partnership selection process. It is important that the companies which are being considered have clear alignment with business functions; cross functional evaluation is integral to the supplier selection process

Supplier footprint consolidation

Consolidating supplier footprints involves a detailed evaluation of the supplier base, assessing factors such as risk factors and performance. It was discussed that reducing network complexity is bringing significant challenges for many organisations. There is no ‘right’ way to do this and therefore it has been a learning curve for many in the industry trying to consolidate their network.