Supply Chain Success Outsourcing is Critical to Business Growth

 Diagnostic companies of all sizes have discovered the need to focus on core competencies and farm out everything that others can do more efficiently. Outsourcing is nothing new of course, but what started with isolated processes such as IT or payroll  has now evolved to encompass the entire front-end process: design, procurement, production, IT ordering services, warehousing, assembly, fulfillment, and package tracking for specimen collection test kits.

The trend is nurtured by corporate leaders' desire to concentrate on those elements of the value chain that they master best and delegate everything else to trusted third-party service providers.

Creating supply chain stability is particularly critical for diagnostic testing organizations, whether their supply networks are established or nascent. Diagnostic testing organizations need flexible capacity to handle spikes or surges in demand that specialized fulfillment companies can provide.

Outsourcing also allows these companies to funnel operational savings into research and development to allow them to bring more new tests to market.

For newer ventures, reducing costs to offset margin pressures is more a cost-avoidance benefit. This happens when they minimize or reduce the need for more people, space and processes as they ramp up to commercial volumes.

For midsized and larger organizations the desire is to establish world-class, globally-capable supply chains as a means to both deal with competitors and configure their supply chains to meet rising customer demand. There are a number of variable conditions that must be accounted for to ensure on-time delivery and protection of product condition and integrity from origin to destination and return to the lab.

With the inevitable rise of genomic and diagnostic testing world-wide, the concept of supply chain management continues to evolve to meet the unique challenges presented when sending, receiving, and returning time and temperature sensitive specimen collection diagnostic testing kits.

Brian Butler is the VP Business Development of The Allied Group and TAGmedica. He is also the author of two books: Find 'Em Get 'Em Keep 'Em and the recently released In Search Of...Customers!