CPhI 2014 Experts Statements: Jörg Schneider, Head of Marketing, Saltigo
3. Which new business models, like project-based or value-based outsourcing, could turn out to be the most promising guarantors for a successful cooperation with the pharmaceutical industry?
Within the framework of project-based outsourcing, companies have the capability to offer different engagement models for their clients. The target is to gain maximum value in compliance with their overall strategic goals. All engagement models are based on the daily and weekly reports, which give a transparent overview of the entire progress. This is the basis of enabling the customer to make necessary adjustments throughout the entire process.
Entire-project outsourcing is the best solution for companies with clearly defined project scope and planning. Dedicated-team outsourcing is efficient in case the companies have a well-defined project idea and their own management teams but need some additional staff. Value-based outsourcing strives to deliver a business-focused solution to the client. To achieve these goals, value-based outsourcing includes the following key attributes: partnership-based and mature service-level agreements. Since cost management is a given in the current market environment, the aspect of value and differentiation prevails.
4. The establishment of shared risk/shared reward partnerships has increased significantly. Can these partnerships accelerate drug discovery and fill up the innovation pipelines?
In the past, relationships down the supply chains were based upon transactions relating to cost and efficiency. Outsourcing has a positive impact on flexibility and efficiency of processes. Costs are reduced, turning fixed costs into variable costs. Assets can be removed from the balance sheet. Therefore, strategic outsourcing will continue to receive much more importance than it has today. The growing outsourcing market provides services across the entire pharmaceutical value chain. Each industry player will have to concentrate on core competencies: For Saltigo, this would be scale-up and commercial manufacturing, process optimization and continuous improvements, technologies, high quality, low-risk environmental, HSE - health, safety and environment - and sourcing excellence.
Tightly aligned supply chains are forming at a rapid pace in the pharma market. Risk considerations and the risk aversion/sharing characteristics of players are also important. The search for reduced risk-sharing operational cost leads to the formation of supply chains among participants that are more willing to share risks, as well as rewards. More specifically, strategies to reduce internal/external transactions costs lead to the formation of supply chains among participants who are less risk-averse or have more ability to manage or mitigate risk. This will lead to more financial funds, which can be used in the discovery of drugs. But there is no real rule for this. It is subject to each individual project opportunity.
