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Contract Sourcing orative initiatives as if we were one company. THE INTEGRATED OUTSOURCED SUPPLY CHAIN If the FDAÕs concerns cause me to have sleepless nights, then so they must for those who run CMOs. Add to this the significant improvement in performance achieved with DSM, benefiting both our businesses, and we have the basis for a constructive conversation with other CMO partners, those for whom we are not a big client. Many of these companies have long known that the approach needs to change; they have been squeezed by clients and have felt the increased scrutiny from the agency. What we found was that they were looking for partners who were willing to join them in driving the change. So we have now embarked on a journey to create the ÒIntegrated Outsourced Supply Chain.Ó Starting with the supply chain for our biggest product, we are meeting with the supply sites for that product to discuss how we all work together to deliver the safety, quality, and availability of products required by our patients. The same principles apply, so we will do this behaving as if we are one company. This is a difficult concept when the supply chain is fully dual sourced, because CMOs normally compete with each other for work, but within a single productÕs supply chain the needs of patients are best served by sharing best practices. If the benchmark is the vertically integrated supply chain, for our outsourced supply chain to be as effective or better, we need to behave as if we are one company, and we need to make things happen in those vertically integrated supply chains to improve performance. This means that when a lab at one site is struggling with an analytical method that another siteÕs lab has no issues with, we should be able to get those analysts together to figure out what is going on and resolve it. This is what would be done in a vertically integrated supply chain, and the fact that we have chosen an outsourced model should not prevent us from doing the right thing. Of course, Shire needs to pick up the costs, as this is beyond the preventative measures that make sense for the CMO, and in rare cases we may need to address issues of IP. About the Author At Shire, David is senior VP for supply chain management, which includes accountability for all external manufacturing. He previously held positions as SVP global supply chain and quality and VP supply chain strategy and product commercialization within Shire's Specialty Pharma Division. Contract Pharma Services Sterile Manufacturing We recognize that Pharmaceutical Companies can reap significant benefits from implementing an outsourcing strategy - achieving it just got easier U.S. FDA, EMA Licensed Advanced Dosage Forms High Potency Exceptional Compliance Commercial Manufacture Controlled Release Technologies Proven Performance Team of Experts Visit www.alkermes.com/contract Email contract@alkermes.com Four Decades Providing Outsourcing Solutions to Our Partners Visit us at: CPhI World BOOTH #42J01 50 AAPS BOOTH #1623 The CMO Leadership Awards 2013