Case study

Turning External Manufacturing partners into a trusted asset

From a potential risk to an effective and profitable partnership

Business challenge

Use of External Manufacturers – EM’s – is a reality. The ability to produce high quality compounds at competitive prices is a key to satisfying market demands. External manufacturers are being trusted with hard-won reputations, as well as physical
production. To justify this trust risk has to be managed and mitigated.

Process

The approach to the management of a diverse portfolio of EM’s -across the globe – was not consistent. Managing EM’s was more time consuming and labor intensive than the company wanted it to be. There was a clear need for a different approach. Successful use of EM partners meant that there had to be a clear process and roadmap leading to consistent EM partner selection, management and development.

Operational Strategy & Transformation

Beginning with the end in mind first the specific elements and requirements for a viable way forward had to be defined. It became evident that clear time-lines and results-focus could be achieved through the installation of a robust project- and portfolio management system. Effective decision making had to be improved by defining clear criteria for each
process step, including a consistent setting of partner requirements. The destination of the evolving roadmap was to be an organization focused on results,

Program and Performance Management

Through a Program and Performance Management system, EM partners are now consistently and systematically managed towards higher levels of performance whilst risks are minimized. There is now a solid EM governance system, with clear criteria, defined responsibility and a faster drive to improved EM execution.

Results

€ 250M

Capex avoidance estimate

€ 5M

Cost productivity benefits in outsource pipeline

Increased

EM Partners are managed as 'virtual sites' rather than exernal partners