In Close Supplier-Partner Relationships, What Pitfalls Do You Try to Avoid? How Close is Too Close?

In Close Supplier-Partner Relationships, What Pitfalls Do You Try to Avoid? How Close is Too Close?

August 01, 2016PAP-Q03-16-RT-004

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Marko Salo, Vice President, Marketing and Sales, Fermion
A:
Close collaboration with only benefits is a dream that never comes true. By nature corporations are selfish entities and the closeness of corporations every now and then leads to collision courses. That is why we need well-defined processes and rules. Typically the pitfalls of close collaborations in NCE chemistry development are related to inadequate specification regarding the agreed scope of work. Close relationships lower the threshold for the customer to start asking for various changes and improvement of trials and tests, and the supplier, for the sake of the good partnership, wants to listen the customer. However, change management is one of the most essential parts of GMP work and requires an extremely disciplined process, otherwise changes may destroy the value generation in the project. The time spent for the definition of the scope of the work must be sufficient, along with the process description for the change management.

Another typical pitfall of close collaboration is in quality management. The more tasks between the parties that are shared, the more difficult it becomes to define the roles in signing the completions of the project milestones. An example could be the content of a development report, which may be satisfactory from the CMO point of view while the customer is still requesting additional information.

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Marianne Spaene, Executive Vice President Global Business Development, Marketing & Sales, Siegfried USA
A: Both partners must understand each other’s expectations and requirements so that there is no misunderstanding. Project assumptions should be clearly communicated so that the right collaboration model can be applied. It is important not only to understand the technical requirement, but also the expected outcome. Each relationship should follow the basic guidelines of respect, integrity and loyalty in order to have a basis for a long-term partnership.

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Michael Lehmann, President, Global Sales and Marketing, Patheon
A: We view our relationships as an important ‘give and take’ that requires some investment from both parties. The best relationships leverage strengths of each partner to advance the project or portfolio.

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Nicholas Green, President & CEO, Therapure Biopharma Inc.
A:
It is much easier to talk partnership than actually demonstrate the behaviors one might and should expect in a partnership. This is equally appropriate to both the CMO and the client. A partnership requires a more intimate way of working; we often use the phrase win-win. What people often don’t seem to understand is that the wins for each partner don’t always occur at the same time and are often variable in magnitude. Just because one person doesn’t appear to be winning as much as the other doesn’t mean the partnership isn’t working.

A partnership doesn’t always mean win-win, at times it might also mean losing (hopefully this doesn’t last long), but these are the times when one can really strain a partnership. If a process is not working as we expected, for example, or a timeline is drifting, one can often see behaviors change and parties drift apart as they try to blame someone else or the other party. Communication, agreed-upon metrics, standards, realistic and agreed upon expectations and a commitment from all levels of both parties is essential to overcome these issues and ensure that each party is striving towards mutually-accepted and achievable goals. 

Unfortunately, it isn’t atypical for a client to experience problems for the first time, if their CMO is a partner or simply a service provider; at times like this, both parties need to come closer and not distance themselves (this can often feel like you are losing). A partner stands up and puts in the effort required to resolve the issues and avoids the temptation to focus on the short-term. Understanding is also an essential element. Often when communicating, we hear what we want to hear and not what the other party is actually saying. Repeating back what you heard, face-to-face meeting, regular meetings and meeting minutes are some of the tools we use to avoid poor communication. The business models associated with a biotech and a CMO are markedly different, as are the risk-reward profiles. As such, sharing of the clinical risk is typically something that, as a CMO, I believe is an area I might consider to be too close. We need to act as one business, but it is also important to understand that we are not the same business.

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Michael Moussourakis, Senior Manager, Technical Marketing and Commercial Development, Alconox Inc.
A:
There are pitfalls in any commercial relationship, whether close or not. At Alconox, Inc. we supply both directly to our customers, and through dealers/distributors. In either case, we strive to be solution providers and trusted partners to our end users. Technical support, application and product knowledge, and quality are hallmarks here at Alconox, Inc. Thus, we have achieved close relationships with many of our customers and supply channels.

To ensure avoidance of pitfalls, like mismatched supplier — customer/vendor expectations, we communicate and listen closely. While we at Alconox, Inc. draw upon a huge array of industry, processing and cleaning experience with our customer supporting staff, every cleaning application is different. The regulations and requirements of manufacturers will vary based on region, location in the process and nature of final product. By closely listening to the needs and communicating this understanding, the right product can be brought to bear at the right time.

I don’t see any reasonable level of supplier-partner relationship as too close. If your goal is to optimize throughput, sharing details and ideas is vital.

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Raj Iyer, Chief Business Officer, Porton Fine Chemicals Ltd.
A:
Developing a deep understanding of alliance goals and lucidly defining value-creating efforts are crucial to a successful and sustainable key partnership. As in any portfolio management program, losing sight of these factors in the storm of project/product-centered activities can result in significant opportunity costs for both partners. Working transparently with our key customers, Porton’s program management and alliance teams take a passionate, yet clear-eyed, view of key objectives and metrics – whether in process development or manufacturing. Porton’s success is based on transparency, integrity and delivery, which require high interactivity with portfolio partner-customers. We don’t see any issues with relationship proximity and work hard to ensure that no single long-term relationship jeopardizes IP/confidentiality obligations or our ability to effectively serve a select pool of other customer-partners.

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