3PL Health Checks Generate Savings for Manufacturers: Here's How to Begin
There are many moving parts for pharmaceutical and biotech manufacturers launching a new product. Outside of pure-play commercial functions that drive marketing, sales, and market access activities, Third Party Logistics (3PLs) partners that support the distribution of pharmaceuticals, medical devices, and ancillary products are an essential piece of the puzzle. Pick, pack, and ship operations are vital to the success of any 3PL program, but many other services can help fill the distribution needs of a biopharma company. Those needs also evolve—often resulting from higher volume distribution needs—from the point of launch and throughout the lifecycle of a drug. Many manufacturers often put a 3PL relationship in place well before a product launch, failing to examine the relationship's progress as the program evolves. This can result in outdated processes and overlooked challenges. We've included a list of strategic and operational questions below that manufacturers can ask as a "health check" on their 3PL relationship to determine how effective the partnership has been post-launch and evaluate its potential for future success. 1. Assess the 3PL Relationship
Do you feel like a valued partner alongside your 3PL? One of the most critical relationships in your supply chain is your 3PL partner. As a manufacturer, you should ask the following:
Is your 3PL receptive to feedback?
Is your program appropriately staffed?
Are your quarterly business reviews effective?
Is the account management relationship constructive?
2. Review the Fundamentals
When you initially launched your product with your chosen 3PL(s), it was under specific product, customer, and stakeholder assumptions. Post-launch, manufacturer teams often change, priorities evolve, team members add more responsibilities to overflowing plates, and busy calendars create barriers to streamlining processes.
By carving out valuable time to reassess 3PL offerings and customer service metrics post-launch, your program could see positive changes and increased bandwidth for your manufacturer teams. Here are some program areas to review post-launch:
Commercial Strategy: Does the initial model support current needs?
Customer Service: Are operational metrics and customer engagement levels exceeding expectations?
Transportation: Is your transportation approach appropriate for your distribution network?
Financial Services: Are your transactions processed accurately and within deadlines? Do you have significant open Accounts Receivables and/or collection concerns?
3. Strategic Outlook
Over time, partnerships evolve, and manufacturer product portfolios expand and contract. Manufacturers should determine if original strategic decisions remain a priority for their commercial success or if priorities have shifted for various reasons. When considering the value and future success of your current 3PL partner, focus on these strategic factors as you look ahead:
Is the 3PL part of a more extensive network?
Does your 3PL have the capacity for future growth?
Does your 3PL have the financial stability to remain a strong partner?
Does your 3PL have a stable management team?
When to Conduct a Health Check Do any of these questions resonate with you or your 3PL program? If so, it's likely time to conduct a health check on your third-party logistics partner and current services. Archbow Consulting can help. As your program evolves, we can assist with your strategic and tactical 3PL and distribution needs.
Stay tuned for Part II of the '3PL Health Check' series, where we'll highlight the nuances between a 'good' 3PL partner and an 'excellent' partner in four key areas.
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Archbow Consulting helps pharmaceutical and biotech companies in the USA and Europe reach their commercial goals with strategic and tactical approaches to distribution, pharmacy, and patient access. Archbow was founded by industry veterans to meet a need in the marketplace for consulting options that offer diverse real-world experience, are able to leverage deep connections across the industry, and can also provide actionable strategic guidance. We invite you to learn more about our team, services, and clients’ success, and connect with us via email, LinkedIn, Twitter or subscribing to this blog which you can do below.