3 Lesser Known Keys To Effective Biopharma Supplier Engagement
By Fran DeGrazio, executive editor, Drug Delivery Leader
In this Frankly Fran take, I am offering practical advice for biopharma sponsor companies to bolster their effectiveness when working with industry suppliers. When it comes to purchasing practices and supplier relationship management, effectiveness can be greatly enhanced if companies avoid the pitfalls and heed the words-to-the-wise I include below. They are shaped by my experiences and observations over the last 40 years, more than 30 of which I spent in various roles inside a supplier organization. I may not have “seen it all,” but I have seen plenty.
Believe me, the pitfalls I will discuss are likely to crop up at some point in your career if you interact with suppliers often enough. What is particularly frank about my commentary this time is that the scenarios for which I am offering advice, though common, are not commonly discussed. They are certainly not typically identified or revealed within perhaps the most standard component of a purchasing process; that is, the use of a Request For Proposal, or RFP. The tips outlined below may ultimately matter more to the ultimate success of your drug, device, or combination product than anything you could find on an RFP questionnaire.
Key #1: Do Not Assume Fit Between Suppliers And Needs
Quite often, a product or service is chosen because it has been used in the past. Regardless of any previous success with that supplier offering, it is imperative for developers of a biopharma product to define that product’s specific and likely unique needs prior to choosing any component, delivery system, or service for it.
For those of you involved in product development in roles such as formulation scientist, packaging engineer, or device engineer, instead of conveniently grabbing a product in your warehouse or jumping on a website to order a sample, you must first clearly identify your product’s needs, engage with your supplier’s technical teams, and align your needs with the correct product or service.
For a supplied product — for example, a device or a component — do not simply accept the specifications listed by the supplier. You may need the product to do more than it has been designed to achieve. The potential misalignment could become evident in aspects of delivery functionality or to chemical characteristics, such as particle loads. My advice: Get ahead of it. Trust me, identifying criteria and aligning with the supplier at the beginning of the process is more efficient than addressing issues later in development or, worse, after commercialization. Put another way, it requires much greater effort for pharmaceutical companies to manage a developed product that does not meet certain specifications than it does to invest upfront in fit with appropriate supplier products.
This same concept applies to choosing service providers. Consider, for example, an engineer working with an outside lab to generate test data to make decisions about a product in development. Quite often, the engineer’s company may be hoping to use an analytical laboratory’s “general” method to speed analysis and/or spend less money. The problem with unquestioningly applying the general method is that it is unlikely to address the specificity of what you are looking for and at what levels to make sound decisions. Don’t assume that the limit of quantification (LOQ) for a specific species is at the level you need it to be. For instance, if a screening method has an LOQ of .5ppm for impurity A but you need to understand if this impurity is present at .2ppm, then that method is not for you! This is a quite common issue that occurs even when working with in-house laboratories because engineers will not always be thinking about these aspects when they run their “routine” screening tests, or they assume the analytical chemist will know.
Key #2: Let Suppliers Manage Their Suppliers
Your suppliers have suppliers. Upstream in the supply chain are Tier 2 and Tier 3 providers of materials, components, and other products to the Tier 1 providers who, in turn, directly supply the biopharmaceutical industry. Given the multi-tier structure — a true supply chain — it is also imperative that you evaluate your direct suppliers on their supplier relationship management skills, as this is an important part of your supply chain that is not necessarily routinely visible to you. A seasoned, high-quality supplier will be able to manage its suppliers effectively.
Working with an experienced supplier can prevent issues from arising. In my tenure at a Tier 1 supplier organization, in working with upstream suppliers in a proactive manner, I would educate them on the specialized needs of the pharmaceutical industry. I would work to ensure their complete understanding of the regulatory importance and quality implications for the pharma industry of supply-related activities such as change control and change notification. Do your critical, Tier 1 suppliers conduct these kinds of activities with their suppliers? If you’re not sure, ask.
Related advice: Once you have confirmed your Tier 1 suppliers’ capabilities in this area, stay out of the upstream levels, if at all possible. I understand that frustration or impatience may induce the temptation to get involved at the Tier 2 or Tier 3 level. Nevertheless, do not insert yourself in supplier-to-supplier relationships and processes unless there is truly no other choice.
Why do I recommend allowing your direct supplier to manage any upstream supplier relationships and supply issues? Biopharmaceutical companies may feel that they are in the power position as the customer — and rightly so. However, the same pressure exerted on an Tier1 supplier cannot be effectively exerted on a Tier 2 or Tier 3 upstream supplier. Those suppliers are typically too far removed from your and your industry’s needs. The very structure of tiering makes that so.
The Tier 1 supplier provides a component, ingredient, or constituent part directly to a biopharma company. In this scenario, they are taking what may be a general, industrial product and converting it or tailoring it for use by the pharma and biopharma industry. Given that focus and purpose, the direct supplier should have the best understanding of biopharma companies’ needs, including industry-specific quality and regulatory aspects.
By contrast, upstream suppliers typically serve multiple sectors, including pharmaceuticals but also electronics, automotive, and others. They lack the pharma-specific understanding that Tier1 suppliers have.
Moreover, too much direct interaction between Pharma and upstream suppliers runs the risk of having those suppliers avoid operating in a regulated environment. Remember, in many of these cases, the volume of products purchased from Tier 2 and Tier 3 suppliers for the pharma industry is much smaller than they receive from the rest of the industries they serve. A Tier 2 or Tier 3 supplier can become overwhelmed with the concerns and questions they have to field. They could conclude that, although they may get a premium return from pharma sales relative to the per transaction return from other industries, it’s not worth the hassle. Frankly, if they were to conduct their own risk vs reward analyses, the results could create significant supply chain dilemmas for the biopharmaceutical industry.
That being said, if your direct supplier fails to meet your needs despite your raising concerns, including those that may reflect products that originated from your supplier’s supplier, you have options. For example, you can request a joint meeting involving you, your supplier, and your supplier’s upstream contact. In that approach, you would be acknowledging and leveraging their relationship rather than risking your relationship with both by excluding the former (your Tier 1 direct supplier) in attempting to take your concerns to the latter (the Tier 2 or 3). Alternatively, of course, you can consider other suppliers for future business.
Key #3: Expect Proactive Communication And Detailed Documentation
Lastly, there are two characteristics you should assess in current or potential suppliers, as you might look for them in, say, work colleagues or friends worthy of your trust. Those are empathy and understanding. Does the supplier demonstrate that it can put itself in your shoes? Does it show signs of being easy to work with? What degree of service orientation does it seem to have? And how can you tell?
One key way to tell is if the supplier communicates proactively and has detailed documentation at the ready. You’ll want to see signs that the supplier has an anticipatory approach to biopharma companies’ current and future needs. These include potential supply chain and demand needs across an expanding range of combination products and other delivery devices.
Case in point: My current interactions with industry consistently confirm the trend of biopharma companies seeking to leverage platform packaging and delivery systems for use across multiple drug products. They are evaluating this option in an effort to accelerate development while minimizing duplication of efforts, where possible. An empathetic, anticipatory supplier of a platform technology should not only best understand the applicability of its platform, but it should proactively build a design space in which it thoroughly shares the necessary data with its Pharma partners in an open and positive manner. Biopharma customers should not be made to feel as though they are “pulling teeth” to obtain detailed documentation about the platform and its potential range. If a supplier truly understands its customers’ challenges, it will anticipate and be ready to deliver on this type of service.
It's not just the supplier’s product, but also the knowledge and service surrounding it that is becoming increasingly crucial.
Frankly, active communication and mutual education between suppliers and sponsor companies should keep the attention on the ultimate goal of biopharma product development: patient need and value. Let’s be honest: with any product being developed, there’s a strong likelihood that a friend, acquaintance, or even family member of those working in supplier and biopharma organizations will use the product being developed and supplied. For that obvious reason, among so many others, the entire supply chain must ensure the delivery of quality products. Strong, open supplier/customer relationships are key.