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Exploring Outsourcing—Challenges and Opportunities

By: Marie Alice Dibon, PharmD
Posted: June 5, 2009, from the June 2009 issue of GCI Magazine.

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“R&D in contract manufacturing is often outstanding because companies bring us the products that don’t work, the problems they can’t solve themselves,” adds McLarty. “We have, arguably, very good teams, because they are used to tougher challenges and quicker turn around. Those that have survived the longest are as good or better than in-house teams. There is no way that I can be better than P&G at making shampoo, but for developing novel, out-of-the-norm specialty shampoo, I am better.”

After Due Diligence

One of the challenges in manufacturing off-site, or doing anything off-site for that matter, is communication. Again, asking the right questions and agreeing on the answers is a good start, but there is much more to good communication.

Defining the rules clearly from an operational standpoint is the start. Who supplies the raw materials? Components? Actives? Fragrances? If the contractor does the buying, what kind of quality control do you want to see applied?

And once operations start, it is essential that the information flows freely. Otherwise, you incur delays and losses.

“Coordination is always the most complicated part,” adds McLarty. “It is important for us to really inform the customers on the expectations that they can have, and that goes hand in hand with exchanging information in a timely manner.”

Thankfully, things are evolving. Not all companies can setup their SAP system—a common centralized database allowing cross access to documentation—and those systems do have their limitations. But today, the Web 2.0 applications offer new ways to work around outsourcing and communication challenges.

New Tools: Technologies for Better Outsourcing

Anyone who has sought to keep in touch with friends and family abroad in the last few years knows the value of instant messaging, chat, Internet phone and video conversations with tools such as Skype. Many also use Web-based photo sharing software, such as Flickr, and maintain profiles on FaceBook and LinkedIn.

All these tools are the result of the coming of age of Web 2.0—a relatively new component of the Internet that allows for collaborative work like never before. Web 2.0 has allowed networking to relocate online and explode—with phenomena such as blogs, miniblogs, YouTube, social bookmarking and sharing tools such as Google Docs becoming valuable tools in communicating.