Disruptions in the supply of raw materials can have devastating consequences for biopharmaceutical manufacturers. In fact, risks can include the discontinuity of production and even facility shutdowns.
By partnering with a production chemicals and sourcing service, researchers can mitigate supply chain risks. Such services provide access a comprehensive portfolio of market-leading chemical brands while offering supplier management, storage and second sourcing support.
This case study highlights how a CDMO at risk of a facility shutdown solved severe supply disruption problems with the help of an experienced sourcing service.
Download this case study to learn more about:
- The risks of a single sourcing strategy for critical production materials
- How to minimize supply chain disruptions with second sourcing approaches
- Services that can help your reduce workflow costs and improve productivity
Production Chemicals and Sourcing Services Situation A CDMO was at risk of a facility shutdown after an interruption of raw material availability with one of their suppliers. One of the high-volume raw materials critical to their manufacturing process was experiencing shortages globally due to increased demand for this material usage in all biologic processing, making the chemical difficult to reliably source in alignment with their production schedule. The CDMO’s current demand for use of the chemical surged by 172%, and future demand was expected to increase by another 165%. Additionally, the customer received notification from the incumbent supplier that the lead time for this material would increase from 8 weeks to 24 weeks—three times longer than the standard lead time—leaving the CDMO with little time to react. The lack of supply chain visibility amplified several risks within their single-sourcing strategy, including discontinuity of supply, potential of manufacturing facility shut down, and added expenses for expedite fees. The short-term solution for counteracting these risks was to hold excessive safety stock in their warehouse, increasing the inventory carrying costs, but management knew that this was not a sustainable practice for their facility in the future. Solution To assess the severity of the supply disruption, Thermo Fisher Scientific collaborated with the CDMO’s Directors of Materials Management and Operations to better understand its impact. Key observations included: •Inefficient supply chain planning and transparency resulting in expediting shipments •Lack of supplier communications regarding poor lead times affecting the production schedule •Several critical chemicals had only one manufacturing origin source qualified •Warehouse was nearing full capacity due to holding of safety stock, projecting to be at 100% capacity within one month To address the operational and business challenges observed, Thermo Fisher proposed alternate sources from our global supplier network within the Production Chemicals and Services business and facilitated discussions between the customer and a potential, new chemical supplier just a few days after reaching out for sourcing support Results $30K Annual savings Raw materials $3M Savings Reduced risk of production delays 87% Reduction in lead timesThermo Scientific Production Chemicals and Services works with biologic developers and manufacturers who want to do what matters most, innovate and produce life-changing therapeutics. With over 30 years of experience delivering production chemicals and direct material supply chain solutions, we deliver risk mitigation, improved operational efficiencies, and reduced total cost of ownership so our customers can accelerate their speed to market, speed to clinic, and improve productivity.
