External Manufacturing

External manufacturing is a strategic operation but often managed with tactical means.

The share of production done with external manufacturing partners has doubled in the past 10 years, driven by cost and efficiency constraints coupled with the need to efficiently supply a diverse global patient population. While more and more production is strategically outsourced, the communication and coordination infrastructure to manage these processes hasn't kept pace. A recent study by NC State University found that almost 75% of external manufacturing relationships primarily relied on phone, email and spreadsheets to manage weekly production status and monitor monthly performance.

Opportunities to improve performance are significant.

External supply leaders have historically faced several challenges in tackling this growing issue. Paramount among these questions are:  "What tangible benefits can we gain by investing in our external manufacturing processes?" and "How can we practically deploy a harmonized, standard approach across our globally dispersed and highly diverse external manufacturing partner ecosystem?" 

To answer the first question, studies by NC State University and other analysts highlight several areas for performance improvement across external pharmaceutical manufacturing through the use of highly connected network platforms, electronic data exchange and collaborative workspaces. These include:

  • Right-First-Time Quality (15-50%): Ensuring predictable product release and product quality levels.
  • On-Time Delivery (10-25%): Predictably meeting delivery schedules and adjusting to production issues.
  • Out-of-Stock (10-20%): Adjusting to unanticipated demand or supply issues.
  • Order Fulfillment Cycle Time (10-40%): Reducing planned time buffers and minimizing impacts of unplanned delays.
  • Inventory Days of Supply (15-30%): Optimizing inventory balances given production plans and channel demand.
  • Data Entry Costs (20-40%): Eliminating manual data entry of production status, inventory balances and other external manufacturing data.

To answer the second question requires a new way of thinking about your external manufacturing ecosystem not as a set of point-to-point supply relationships but instead as a highly connected global network. The tools to manage such a global network and create a supply chain control tower are now available.

Establish a supply chain control tower that ensures visibility and control over your external supply network.

TraceLink's high performance network platform and integrated suite of supply management applications helps you ensure the same level of visibility, control and performance across external manufacturing operations that you have over your internal production processes.

  • Establish an accurate external supply dashboard providing at-a-glance and detailed production status across all external manufacturing relationships.
  • Ensure end-to-end visibility and collaboration across the production life cycle from order initiation to final product delivery.
  • Monitor inventory balances and raw material components at manufacturing partners to improve production planning and enhance responsiveness to unexpected supply issues.
  • Create a shared quality management workspace between internal quality teams and your external manufacturing partners to improve performance and standardize processes across the quality review cycle.
  • Track API and bulk material orders for production to ensure on-time production start and improve resource utilization at external manufacturing sites.
  • Track and review KPIs with external manufacturing partners for performance scorecarding and continuous improvement programs.
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