The growing importance of supply chain collaboration in life science

Gustavo Salem, Group President at IDEX Health & Science LLC

A recent Forbes Insights Survey of 180 life science, aviation/ aerospace and pharmaceuticals executives found that 68 percent believe that active and meaningful engagement with suppliers is essential to success. The report based on this survey, “Unlocking Innovation in Your Supply Chain: Five Collaborative Insights for Life Science,” explores how companies in these sectors are using supply chain collaboration in their innovation strategies. One example that shines a light on the benefits of working more closely with suppliers is SCIEX, a leading innovator of mass spectrometry technologies.

Jakub Rucinski, senior director of hardware and system development at SCIEX explains:

“We think of suppliers in two categories: the first group, we classify as providers of key technologies. These are esoteric areas that are very specific to mass spectrometry where generally, there are only a handful of vendors capable of producing what we need. These tend to be our closest and most strategic relationships. At the other end, we have fabricators: printed circuit board assemblers, metalworking and machine parts. Here, we work closely to get the right costs, manufacturability and performance quality.

“With our key providers, we share our five-year technology roadmap, as well as more refined product development timelines for better coordination. As delivery dates get even closer and our needs become more firm, we engage more closely with both groups of suppliers.”

In our experience at IDEX Heath & Science, agile design and development is pushing engineers to integrate and fail fast. As a provider of fluidics, microfluidics, and optics solutions, we have the greatest success with customers when we are involved earlier on in the R&D process and are able to take part in that agile process, rather than trying to answer a specific or isolated challenge that has arisen as a consequence of it.

Communicate to innovate

Rucinski is clear that communication is key to unlocking the potential of these relationships. “It’s so easy to get wrapped up in what we are doing that we may not adequately convey our expectations. So, something that we might need in a matter of days isn’t ready for a number of weeks due to poor communication. And the same can happen at the supplier – they may be facing a challenge, they’re falling behind, but they don’t let us know. And it may be an area where we can help or it might be something that can be adjusted. Of course, the degree of communication and information sharing varies with the relationship. With our key suppliers, the ties are closer and we share more data.”

When it comes to supply chain collaboration, a common challenge cited is ownership or protection of collaboratively developed intellectual property. While risk-aversion is fundamental to many of us operating in life sciences, the risks are indeed manageable. Rucinski explains the approach taken by SCIEX: “Beyond a fundamental confidential disclosure agreement (CDA), we generally create language to support a relationship where whatever is yours remains yours, whatever is ours remains ours, and anything co-developed, we share. That is, unless some specific payment for research changes hands. If we pay for it, it’s entirely ours.”

Redefining the vendor-manufacturer relationship

Overall, SCIEX and many other manufacturers in the life science industry, are becoming more accustomed with sharing information and collaborating with strategic suppliers, which is encouraging. However, still 37 percent of executives say that they lean towards a ‘do it all’ orientation versus only 28 percent in pharma and 22 percent in aerospace, so there is still progress to be made.