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Pharmaceutical companies of all sizes meanwhile routinely outsource much of their research, development and/or manufacturing requirements to contract organizations around the globe.

Outsourcing increases the overall performance of pharmaceutical companies by allowing them to focus their resources on core activities, such as understanding the fundamental effects of disease states, the discovery of novel therapies, and possible marketing and distribution of the drug.


Therefore, the contract research, development and manufacturing industry continues to grow, driven by an increasing amount of customer requirements which are presenting new challenges for outsourcing partners and contract manufacturing organizations (CMO’s).


Key requirements for the industry are reliability, supply chain security and quality.

Companies which consider outsourcing shall trust in their partner organizations’ ability to deliver, which means considering this matter when undergoing the partner selection process.


It can be more difficult to manage quality and supply chain controls effectively when many partners contribute to the supply chain. Outsourcing complexity and risk can be reduced by establishing a smaller number of flexible suppliers which provide early-stage expertise, pre-clinical studies, manufacturing and global supply at commercial stages.


Customers often value having their outsourcing partners located close to their own facilities and operations, to improve communications and allow for improved levels of collaboration especially at key stages of product development.


Further challenges for the outsourcing industry are meeting customers’ growing needs for specialist chemistry capabilities, as biotech and pharma companies increase their understanding of the fundamental cause of diseases and develop high complex and innovative products. There are increasing demands in solving challenging chemistry and engineering scale-up problems to leverage effective and efficient synthetic routes. A further concern for pharma companies is improving their process cost-effectiveness without impacting on quality or innovation.


Sustainability is also an important focus and will remain an ongoing concern for the broader industry. Suppliers make progress in reducing their own carbon emissions and establishing and maintaining best practices for efficiency, including reducing the material use and production of waste.


I will be critical that outsourcing partners remain adaptive to meet customers’ changing needs as the pharma industry is continuing to evolve, like in continuous processing technologies. Suppliers are considering how to bring these capabilities together with their custom pharma solutions, offering to meet the emerging and future requirements of their customers and their developing needs for more effective, technology-enabled outsourced services.


SAP solutions can help simplify sourcing and procurement processes including the onboarding of third parties, managing complex contracts and statements of work, and collaborating with a contingent workforce. The solutions provide full visibility into spend and supplier performance.