West Coast, U.S. (with global reach)
Supply Chain Services
Background: A global life sciences company, based on the West Coast of the U.S., develops, manufactures and markets pharmaceuticals for serious medical conditions, including numerous cancer and other life-threatening illnesses. The client uses RS Integrated Supply full storeroom management services, including Supply Chain, Asset Services and Technology. In addition to the on-site personnel provided by RS Integrated Supply, the client also benefits from a dedicated Enterprise Strategic Sourcing Manager whose responsibility is to identify and implement sourcing plans that reduce costs while improving service levels.
RS Integrated Supply chain services, in addition to delivering strategic sourcing, storeroom operations and logistics, also offers off-site purchasing as well as bulk and daily purchasing, as necessary.
The Opportunity: During the initial spend evaluation process, an opportunity to purchase directly from a specific product manufacturer presented itself as a cost-savings alternative to a distributor. The project involved a custom-made part manufactured for the client, with exacting specifications. Acting quickly in order to take advantage of the opportunity, the enterprise strategic sourcing manager contacted the manufacturer, introduced the idea and negotiated a direct purchase agreement delivering significant savings.
In the process of implementing those savings, the RS Integrated Supply team worked closely with both the client and the manufacturer in ensuring the product was manufacturer-equal and that all appropriate documents, including the certification of compliance, were provided and verified as required by the site’s GMP (Good Manufacturing Practice) designation, before the product was sent to the production floor.
When completed, the same concept was shared with additional sites within the client’s network, thereby extending the program benefits across the enterprise while remaining GMP compliant. Additionally, the RS Integrated Supply team is exploring how to leverage similar purchases across its client roster, thereby delivering further savings.
Challenges: Among the challenges was the need to meet product specifications and performance, ensuring the newly sourced item was the exact same product, performing exactly the same way in the demanding and highly regulated production environment. In some cases, when similar changes are made, a change management process is triggered. Those usually center on a change to the form, fit and function of the part. In this case, however, it was the same part sourced directly from the manufacturer. The process maintained compliance with the site’s GMP process (including the proper documentation for any FDA audits).
The industry’s regulation and government oversight mandates additional steps to maintain the integrity of the supply chain. Certification of conformance is one measure, as is USP VI Testing, which evaluates various types of plastics materials used in the production or packaging of pharmaceutical products. The end goal is to protect the purity of the final product without introducing cross contamination to the production environment.
Results Realized: With the help of the RS Integrated Supply on-site operations team, those challenges were overcome by providing item specs, conformance certification and other requirements for the individual part and doggedly addressing client concerns with documented research findings.
This sourcing optimization project delivered a 30% cost savings to the client for this single product. These results also led to a secondary opportunity, delivering an additional $22,000 in savings.