Three Ways to Turn Life Science Suppliers into Partners
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A growing number of life science businesses are turning to greater supply chain collaboration for benefits like accelerated time to market, improved quality, reduced risk and more rapid and widespread innovation. But while 68% of executives in this industry say active and meaningful engagement with suppliers is essential to success, far too many, over a third, struggle to implement it. This is according to a recent Forbes Insights Survey.
One key roadblock identified by the research is vendor selection: “With whom should we partner—and why?” Other challenges include overcoming pride in ownership (the “not invented here” syndrome), exposure to reputation risk, concerns over intellectual property (IP) protections and even data security.
Having researched and worked with a wide range of life science organizations who are reaping the benefits of closer collaborations, we’ve identified three key actions that have helped them to succeed.
#1: Look Closely At Culture
Company culture often inhibits a willingness to collaborate. Fifty percent of executives say their company’s culture – specifically, a “pride in ownership” mentality or “not invented here” syndrome – prevents better collaboration with suppliers. These cultural issues are more common among life science firms (55%) than in pharma (38%).
This all comes down to an issue of leadership and change management: uniting employees in the pursuit of value creation through closer collaboration with suppliers. Regardless of industry, firms must ensure leadership understands and promotes the value and means of such partnering.
To do this, leaders need to follow through with change-focused initiatives, such as identifying and supporting active collaboration champions, and address authority levels and accountability for entering into collaborative relationships with suppliers. Accountability is ultimately essential in terms of organizing enterprise collaborative efforts and processes.
#2: Develop Acute Supplier Awareness
Suppliers must, at all times, be able to perform to specifications. Thus, product development and engineering executives need to identify their most valuable, and therefore strategic, suppliers, cordoning them off for greater intimacy.
This will require a more rigorous and strategic supplier selection/evaluation protocol, early warning systems for supplier failures, and crisis protocols and risk mitigation strategies in the event of supplier failures.
#3: Address IP issues
Invariably, with new partnerships, IP-related issues and concerns will arise. For example, 54% of survey respondents express concern over the management of collaboratively developed IP. In practice, valuation, ownership and protection of IP often becomes one of the greatest obstacles preventing a company from working more intimately with its suppliers.
Addressing IP risk is thus vital. Start with a fundamental confidential disclosure agreement. But for more complex issues, be certain to address what happens with any new IP that may arise within collaboration.
In today’s era of incredibly rapid technological advancement and innovation, companies need to ask themselves if they can really afford to go it alone. While there may be challenges within collaboration, the research suggests these pale in comparison to the benefits that can be achieved through open and active partnerships with suppliers.