Pharmaceutical and Life Science Manufacturing: Are You in Control?

Jennifer Braner
July 30, 2021 | Updated: November 21, 2023

Modernizing your supply chain is a worthy goal, and for pharmaceutical and life science companies, a big part of modernization is to outsource manufacturing and other business functions to various trading partners across the supply chain. There are many good reasons to do so. Benefits include cost savings, efficiency, specialized manufacturing capabilities, and operational productivity enhancements. Companies should evaluate their core competencies and outsource where it makes the most business sense.

The high stakes of outsourcing in pharmaceutical and life science manufacturing

Think of a time when you had to share responsibility with others—maybe even strangers—to accomplish a project that your job or reputation depended on. Team sports are one way many of us have learned to “trust” teammates, counting on our partners to work collaboratively to secure the win. But what if that “win” wasn’t just a trophy but involved delivering life-saving drugs to customers? How easy would it be to trust your teammates when the stakes are truly high?

Sharing control with partners

With all the benefits of outsourcing in the modern supply chain, there is justifiable concern about the loss of control. When your company had sole responsibility for manufacturing and production, you could control almost every detail since your internal systems held all the data you needed to run the business. When you outsource many of these functions, your trading partners share the control, and the essential information required to run the business is spread across multiple systems, tiers, and ecosystems.

Like many other industries, companies in the pharmaceutical and life science space have invested significantly in outsourced manufacturing. According to research by ISPE, over the past four years, investments in outsourced manufacturing have grown 25%, reaching $1.17 trillion in 2021. A recent survey by Statista forecasted that nearly 50% of expenditures for services in the life science sector will be outsourced by 2023, showing the continued upward trend in contract manufacturing and the heightening complexity of pharmaceutical supply chains.

Keys to successful partnerships

To successfully produce products and deliver them to global markets at the right place and time, you must have complete end-to-end visibility and control throughout your supply chain. This starts with reliable, easy access to the data. The ability to gather transactional and inventory data from manufacturers, suppliers, and other trading partners is crucial. The data must be collected from multiple disparate systems across all functions, tiers, and ecosystems and made decision-grade so it can provide all parties with a holistic view—not a simple task when bi-directional data flows are moving between disparate systems and in different formats. How do you accomplish this type of synchronization if you aren’t on the world’s largest business network? Good question.

The power of the supply chain network

Look for a vendor that can provide access to an extensive global business network that connects trading partners across all functions, tiers, and ecosystems, enabling you to exchange information and work collaboratively and securely with all partners in real time. A network that empowers organizations across the supply chain focuses on end-to-end opportunities, risks, and inefficiencies that trading partners and companies can tackle together.

Ability to see, understand, act, and learn

With the power of the network, pharmaceutical and life science companies can see what is happening across the entire supply chain and bring it into decision-making cycles. There, they and their trading partners can understand the impact of what is happening, take action that results in shared value, and learn for next time.

Regaining control and visibility into your supply chain allows you to rapidly determine the business impacts of deviations and plan the best course of action. The last step is to orchestrate corrective actions between all appropriate parties. Time to collaborate!

Given the rise in outsourced manufacturing today, collaboration extends outside the four walls of your organization and is imperative for pharmaceutical companies working with their trading partners. You are not just sharing data about the current state of manufacturing processes. You are shifting, adjusting, compensating, and learning—together. When irregularities arise and unforeseen challenges enter the scene, it is important for all team players in your supply chain to collaborate to resolve problems, agree on commitments, manage disruptions, and have the knowledge to prepare for future ones.

Reaping the benefits of outsourcing

Outsourcing is likely here to stay and will continue to grow in the future. Pharmaceutical and life science companies that harness the power of a business network, data from all trading partners, end-to-end applications to manage business processes, and powerful artificial intelligence (AI) will gain the control and visibility required to reap the benefits of the modern supply chain.

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