For Brand Owners, Strategic Partnerships With CMOs Can Breed Innovation

The inspiration for innovation can come from an array of sources: internal or external, organic or acquired, customer or competitor, subordinate or manager. We find people to emulate in the darnedest places.

However, for pharma manufacturers, one often overlooked source of innovation is existing supply chain networks—particularly contract manufacturers, many of whom have, by necessity, been flexible, under-the-radar problem-solvers for years. Often, versatility breeds inventiveness.

When viewed and valued as a strategic partner, your CMO can inspire truly transformative innovation. This may seem like a lofty statement, but at my company, Pharma Tech Industries, we’ve found that when customers view us holistically—as a strategic partner rather than a merely transactional vendor—we develop a mutual stakeholder relationship that yields ingenuity and impactful dividends.

Disrupting Traditional Paradigms
Transformative relationships surface when traditional paradigms are disrupted in the spirit of mutually beneficial collaboration. Traditionally, many organizations have defined contract manufacturing rigidly within the confines of supplier relationships, akin to other suppliers in their procurement stable of third-party vendors.

As such, contract manufacturers are often cautiously engaged at an arm’s length and given only a minimum of privileged insight. Basically, they are provided with information on a need-to-know basis and told what to make, when to make it, and how to go about doing so. They’re given transactional details that afford just enough of a glimpse behind the strategic curtain to render a sufficient Request for Quote (RFQ).

As executors, it’s a given that CMOs are expected to execute—to produce and deliver finished goods. But in today’s hyper-competitive CMO landscape, true brand stewards can offer a capabilities portfolio extending far beyond manufacturing horsepower alone. If entrusted as a true strategic partner, a CMO also can help refine strategy and inspire innovation—critical upstream activities that old school paradigms presume to be outside the proverbial CMO box. 

Traditional Versus Strategic Partnerships

At Pharma Tech Industries, we have a wide-ranging portfolio of clients, including both traditional, “just get the job done” customers and those who see us as a strategic production partner. Our more conventional customers provide specifications and transactional POs that prescribe and precipitate production. That’s all well and good, of course—sometimes that’s all a customer needs.

On the other end of the spectrum are customers whose relationship with us goes well past that of a purely executional downstream supplier. These clients bring us into the fold as partners from upstream collaboration onwards, cementing fundamental value well before execution even commences. In these relationships, both parties are more deeply entrenched in each other’s businesses, yielding mutual stakeholdership and shared dividends. 

For example, Pharma Tech is currently engaged in projects that involve initial concept ideation, product formulation, ingredient/function design, and beta prototyping for major household brand clients. We are privileged to contribute key components to these products’ innovation cycles as if they were our very own. This enables all parties to get to market faster, more economically, and more effectively, and with a product that resonates not only with our capability matrix, but, more importantly, with market trends, regulatory requirements, and consumer demands.

Let’s take a closer look at the different stages of a comprehensively collaborative brand owner-CMO partnership.
 

Concept Ideation
Concept ideation kicks off the strategic partnership as both parties survey the market for a 360-degree assessment and inventory of what is presently available. In coming up with the next compelling big idea, they must ask: What needs/functions does it fulfill? What do competitors already offer the market that is tantamount? Who does this offering serve? Why will consumers care? Why is this relevant versus other alternatives both past and present? When and how will this product be used? What features must be built in for successful fulfillment, i.e:  cost, size, shape, taste, appearance, preservation?

Thought should also be given to which niches the product will serve and whether these channels, i.e. institutional versus drug, versus club space, will have different packaging and configuration needs. In seeking answers to these questions, key design elements and criteria will surface and serve as invaluable inputs to the next stage: product development.

Product and Package Development

This is where the rubber begins to meet the road, and conceptual ink translates to paper design. The CMO will begin to frame out the product and package architecture and quantify exactly how much of what types of functionalities are needed. This, in turn, will precipitate such design elements as size, volume, materials, and ingredients. Brand guardrails and development tradeoffs will be weighed, separating the ‘wish-list’ items from the ‘must-haves.’ 

High level strategic questions must be asked and answered, such as “Are we aspiring to create a Cadillac or a Chevrolet?” and, more tactically, “Is portable consumption a central need state? Is immediate dissolution and transparency of the finished product necessary? Will the product be consumed alone or as a cocktail—at home or en route? What is the shelf-life target and anticipated environmental conditions for this product, both in storage and at point of consumption?”

The answers to these questions will drive selection of the particular ingredients and packaging components that make up the finished goods bill of materials. 

In the bench prototype stage, ingredient and packaging design selections are rendered to fully vet their application. Although the best intentions and ideas may look elegant on paper, they may not work out when put to the test of actual lab application. Perhaps the selected ingredients take too long to dissolve together in the earmarked delivery system; perhaps components excel individually on a standalone basis but, in concert, render organoleptic variances that miss the mark. Maybe the oxygen barrier is not adequate for product integrity, or the traits don’t align with downstream distribution/point of sale/usage restraints. 

This real-world preview stage is the time for nuances to surface that can lead to further product and package improvements for an optimized final product.

Commercial Trial
And now for the final exam. While our prototype may appear to be ideal, we cannot be sure the existing blueprint is complete and readily translatable from small-pilot to full-scale commercial operation. This is where the conversion to scaled up commercialization occurs—the factory floor culmination of both technology transfer and cross-company collaboration. 

To the extent that brand owners trust their CMO partners and view them as extensions of themselves—as development and manufacturing partners—they will be able to focus their energies on marketing, sales and building brand equity to educate, influence, and ultimately, win over more consumers.
 

Tu T. Tran is Vice President of Sales & Marketing for Pharma Tech Industries (PTI). He came to PTI with more than 20 years of business development experience in a career spanning engineering, manufacturing, sales, and marketing, including a strong background in both pharmaceuticals and nutraceuticals.