Passion and professionalism create the right conditions for successful outsourcing, explains Anders Ulfhielm, executive vice-president, business development for Rechon Life Science.

In the shadow of the financial crisis, pharmaceutical companies are considering outsourcing functions to service providers that specialise in non-core functions. Successful outsourcing allows a company to focus more on the performance of product development and to delegate other operations to one or more service providers who can reduce costs and improve performance in these non-core functions. However, the greatest challenge to get the improvements and cost reductions is the way the outsourcing is performed.

Rechon Life Science offers services across the entire pharmaceutical development process, from phase II development through validation, manufacturing, packaging and labelling.

"There is an increasing need for the pharmaceutical industry to become more time and cost effective, and we can speed up the entire process, from the first contact and the idea stage to contract manufacturing," says Anders Ulfhielm, executive vicepresident, business development for Rechon Life Science.

To get a win-win situation for all involved parties the following critical success factors are essential.

Communications management

An outsourcing contract can facilitate communications management by creating procedures for exchanging information and communicating issues first within the internal organisational structure of the outsourcing service provider and the customer and then between the parties.

"With the Rechon project management tools, we secure a fast and efficient reliable communication between the parties. Being located in the south of Sweden also gives us several advantages.

We are only 20-25 minutes away from Kastrup, Copenhagen, and have fast entry to the rest of Europe," says Ulfhielm.

Performance management

The greatest performance management challenge is to clarify the scope and define the critical functions that are delivering customers’ success with outsourced functions. After identifying these critical functions, performance measurement must be put in place.

Rechon Life Science has a very interesting platform for the developing and manufacturing of pharmaceuticals. Offering excellent conditions in terms of experienced staff and state-ofthe- art technology, the company aims to help clients speed up their processes and reach patients faster.

Because Rechon Life Science is owned by a Chinese company, other added values could be part of collaboration. "Being part of a global Chinese cooperation has several advantages; for example we can provide our customers with an established manufacturing in China and knowledge of the attractive Chinese market," says Ulfhielm. "It is also an advantage when searching for cost effective raw material."

Change management

Both parties need to share cost reliability. The customer enters into a contract based on the savings, while the service provider performs its services to create a profit margin. An outsourcing contract needs to include a structured change management procedure with routines for additional services that justify additional fees. Procedures to address new or additional services to customer personnel must be clearly approved. If not, it creates conflicts.

"To secure this we also have a quotation and agreement procedure including an efficient project management," says Ulfhielm. "This help clients to speed up their market entry at a lower cost."

Dispute management

It’s important to put a lot of effort into creating the contract. Procedures for managing and resolving disputes need to be established before a dispute arises. It is very important to have an open mindset in the communication between the parties. An outsourcing contract needs to encourage the parties to acknowledge and address disputes as they arise, rather than sweep them under a carpet where they often become more serious.

For the future, Ulfhielm hopes that Rechon Life Science will become a well renowned and respected contract manufacturer for the pharmaceutical industry, for both small and large companies.

"We want to be a reliable partner to companies throughout their entire process of drug development, not just deliver a naked vial. With passion and professionalism we want to improve quality of life."