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The challenge
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 cancers and other life-threatening illnesses.
RS Integrated Supply provides MRO-integrated supply services to the site and utilizes a dedicated enterprise strategic sourcing manager whose responsibility is to identify and implement sourcing plans that reduce costs while improving service levels.
During the initial spend evaluation process, an opportunity to purchase a specific product directly from the manufacturer presented itself as a cost-saving alternative to a distributor. The project involved a critical spare that came with exacting specifications.
Among the challenges was the need to meet product specifications and performance, ensuring the newly sourced item was the same product, performing the same way in the demanding and highly regulated production environment.
The solution
To take advantage of the opportunity, the enterprise strategic sourcing manager contacted the manufacturer and negotiated a direct purchase agreement delivering the client significant savings.
In the process of implementing those savings, the RS team worked closely with both the client and the manufacturer in ensuring the product was manufacturer-equal and that all appropriate documentation, including certification of compliance, were provided, and verified as required by the site’s GMP (Good Manufacturing Practice) designation, before the product was installed on 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.
In some cases, when similar modifications 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 requirements (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 several types of plastics materials used in the production or packaging of pharmaceutical products. The goal is to protect the purity of the final product without introducing cross contamination to the production environment.
This sourcing optimization project delivered a 30% cost savings to the client for this single product.
The results
With the help of the RS Integrated Supply on-site operations team, overcame the challenges by providing item specs, conformance certification and other requirements for the individual part and doggedly addressing client concerns with documented research findings. The attention to detail led to swift client approval.
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.