Managing Contract Manufacturing Relationships

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Managing Contract Manufacturing Relationships

Contract manufacturing has become a cornerstone of global supply chains since the first wave of production outsourcing. Since then, brand-leading companies have focused their supply chains on the end consumer, while contract manufacturers have overtaken brand-leaders in various key areas. As a result, contract manufacturers are becoming strategic partners in the implementation of product designs, which requires dedicated relationship management to enable manufacturing coordination across company boundaries. This book addresses the relationship management of contract manufacturing relationships through the client's use of management practices. It adopts an eclectic transaction cost economics and relationship velocity perspective. To this end, applied management practices, relationship dynamics, and the targeted selection and adjustment of management practices are examined. The findings indicate the need for systematic alignment of client companies and contract manufacturers at commercial and social relationship levels. Furthermore, relationship dynamics require a regular assessment of the commercial and social fit. The findings contribute to the understanding of contract manufacturing relationships in literature and include recommendations for practical application.
Excellence in Management of Contract Manufacturing Relationships

Contract manufacturing relationships (CMRs) have become an integral part of pharmaceutical supply chains. Solid regulation, technological complexity, and high investment pressure encourage collaboration between client companies and CMOs. Due to the high complexity of pharmaceutical value creation and high relevance for clients, CMRs always move in a field of tension between client control and trust-based self-governance. Against this background, the study investigates the success factors of excellent relationship management of pharmaceutical CMRs. A consortium of seven pharmaceutical companies representing the client and the CMO side is involved in the study to ensure the practicality of the results. First, the study findings give insights into purposeful relationship development amid internal and external dynamics. Second, the study discusses current tailoring practices and provides a method-supported process for conducting meaningful partner differentiation. Third, the study addresses the need for partner alignment to achieve through the concept of the Relationship Gap to systematically include perceptions, business, and partner behavior expectations in relationship management.
Issues in Industrial Relations and Management: 2013 Edition

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