The new approach to contract services:
co-creatingbetter value and the shiftfrom cost-cutter to customer of choice
The way in which pharma companies evaluate the work of their CMO suppliers is changing fast and the approach called the value proposition is becoming much more important. It sets out to generate best value for the customer and achieves this through a range of practices including open book calculations, the buying of capacity, much greater visibility and effective supply chain management. The approach entails very close strategic partnering and ultimately changes the relationship between pharma clients and their customers from that of “cost-cutter” to “customer of choice”.
Pharmaceutical companies are starting to reevaluate how they operate with CMOs. There is a growing appreciation that they need to adopt a new approach to how they value the work of contract manufacturers. This has strong implications for the market as it is set to radically change the way in which CMOs and their pharma customers work together. To achieve what are being termed the new “value propositions”, a new mindset with fresh strategic thinking is fast evolving. This new strategic approach, which forward looking CMOs are