GILES BREAULT*, SAMMY RASHED
*Corresponding author
The Beyond Group AG, Basel, Switzerland

Abstract

The Pharmaceutical industry is undergoing significant changes. These changes can be felt through the entire supply chain from the customer back to procurement organisations and the supply base that serve pharmaceutical companies. Through the use of surveys and focus groups the authors gained a sense of frustration emerging from procurement leaders that suggested they could contribute more broadly to company productivity goals as well as recognising that some traditional methods of supplier management had hindered their ability to fully exploit suppliers’ value propositions and streams of innovation. The authors first conducted a survey to understand what options purchasing departments might pursue to create more value for their respective employers, and then later conducted an industry “Think Tank” comprised of procurement leaders from 9 Pharma companies to further explore one of the “top” options (SRM) as a way of co-creating value between buyer and seller. Emerging from this Think Tank was the “Trading Relationship Management Canvas” that describes how companies can further understand and refine their approach to gaining new value from their supply base.

INTRODUCTION

The Pharmaceutical market has changed dramatically over the past years. New commercial models, combined with greater regulation, stiffer price controls and a move away from blockbuster medicines sales to more speciality medicines clearly indicate a sea change is underway. In an earlier article in Chemistry Today, author Giles Breault posed the question; “What does it take to become a supplier of choice?” The answer envisioned that in the future, suppliers would need to develop more visible and useful value propositions for their important customers. Recognising that market changes affects buyers as well as sellers, the authors undertook a study to evaluate where procurement organisations view their strategic future. Understanding the internal thinking of Pharma customers leads to how suppliers should be developing business proposals for their clients. Understanding the customer’s customer is at the core of the philosophy of co-creating value through strategic alignment. Subsequently the authors have conducted over 40 interviews held several focus groups, and conducted a survey that indicated what companies thought were the most likely ...