Contract (Development) Manufacturing Organizations continue to be in growth mode. There are a few big players in the market and several new entrants backed by either Corporations or Venture Capital firms, interested in the two digits growth rates. With the shift from small molecules and solid dose drugs to more complex and harder to copy large molecules typically in liquid formulations there is a run in the industry to expand the range of capabilities as well as services inorganically in order to become more attractive as end-to-end service provider to large pharmaceuticals as well as biotech’s. We just have to take a look at how the big players evolved over the last 10 years, or even just the consolidations in the last 3 years. And an increasing number of service providers ultimately can only be good for customers: consolidation, maturing competition, etc.
As the competition grows, eventually an additional business differentiator which CDMOs could leverage to gain market share on top their capabilities and technology will be crystallizing into something more concrete and relevant: Client Services.
For a variety of reasons, the a.k.a. Project Management departments have been left practically untouched as the corporations grew or acquired more facilities in additional countries and regions. Eventually, leaving the organization with geographically dysfunctional Project Management teams which continue to function as they were initially conceived to operate, as siloed departments being part of a local P&L organization and covering their corresponding customer base. Hence not a surprise that many “global” service providers are still not perceived as such. So, what to do? There are 3 rules that ought to be considered: (1) change first what customers see and after the internal misalignments, (2) remember that the use of best practices might get you there quicker, but the creation of new practices will get you further, and (3) a shift from a local management culture to a global one is inevitable.
The first one should be self-explanatory, start by harmonizing the processes that impact directly your clients. These can be numerous and not only bound to Project Management. The variances can range from Operations to Quality Control eg. different ways of working (SOPs), different standard lead times, use of different Batch Records/Templates and versions, a variety of communication approaches and maybe several at the same time if several facilities are working with the same client, different job descriptions or job titles, … all of these not really projecting a “one look and feel” towards the customer. Such a transformational process cannot be covered in a blog, however applying a simplified FMEA through the customer’s lens (severity, occurrence, detection) can help you triage all tasks in order to tackle first the right processes.
The second rule has something to do with team spirit and people development. The ultimate goal should not be to copy all processes from a specific facility and deploy them as such onto the remainder of the organization. This is typically a recipe for failure as most teams will revert back to the old processes once the business transformations are a few years down the path and continue to operate with less visibility under the radar. A way to approach this dilemma is to start by sharing all practices and building up new processes on a jointly defined basis of “that’s probably the best we have today” which can be a mix of processes from various regions, constituting a theoretical best practice (= the starting point of the journey).
The third one is the most difficult and lengthy one as it involves site heads, regional managers, …in short, all managers with an incentive to hold on to the past. Eventually, it’s the local P&L’s which will also absorb part of the Change Management costs including consultancy support as well as potentially negative impacts to the local revenue in case of an operational shift within facilities. In most cases this challenge is either resolved in a top down approach: “this is how we ought to serve our customers”, or clients and new competitors with a less historic burden will put the additional pressure for the industry to evolve and mature. Let’s face it, at some point all service providers will claim to have seamless, end-to-end capabilities and state-of-the-art technology, therefore the “how” services are delivered to customers and a robust customer relations approach will be key market differentiators to ensure the expected sustainable growth.