Beyond Supplier Relationship Management

In an effort to determine the sources of dysfunction that affect the integrity of supply in the pharmaceutical and medical device industry, a research collaboration was created by the academia, business practitioners and regulators. The research used a multi-stage effort that relied on the DMADV (define, measure, analyze, develop, and verify) approach to identify and propose solutions for key issues influencing the reliability of supply chains in an effort to improve existing processes of the participating firms. The data was collected over 3 years and involved 41 executives from 25 participating firms that had either Fortune 500 or Fortune 100 status with median revenues of $7.3 billion, The study found that conventional wisdom about Supplier Relationship Management (SRM) is not working as intended due to the following issues: (1) A top-down mentality within the buying organization; (2) A lack of purposeful engagement with suppliers; (3) A lack of robust internal alignment and (4) The ‘dark side’ of a close relationship with suppliers/customers. The research also identified two significant shifts in the current conceptualization of SRM practices. The first paradigm shift was: From “our suppliers are causing the problems” to “we are causing the problems”. The next paradigm shift was: From “Suppliers are suppliers” to “Suppliers are customers first”. Finally, the research proposes a set of Good Supply Practices to increase manufacturers’ confidence in their products. The solutions include practices such as: robust internal alignment, purposeful transparency; comprehensive supplier qualification and manufacturer self-qualification