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Request For Quotation Management: The oxygen generator for CDMOs

Contract Manufacturing (CM) continues growing globally at a CAGR between 6% and 8% as different studies and reports indicate. This is partly due to the increase in the global pharma business (mainly NPIs) and partly due to the outsourcing increase by the pharma companies.

On the other hand, the CDMOs’ established business is continuously confronted by challenges coming from products maturity (volume churn, market withdrawals), market specificities (price pressures, cost increase) and customer strategy (insourcing, supplier consolidation), leading to year-after-year top-line and profitability shrinking.

It is more than obvious that CDMOs, independently of the strategy they follow (“Growth” or “Stabilization”), are doomed to look for new business. New projects’ introduction is the oxygen they need, at least for keeping the CDMO in the business, let alone to support growth.

The fact that any new business opportunity passes first from the Request For Quotation (RFQ) process of the CDMO, makes the RFQ management the oxygen generation engine, the quality of which will determine the short and long term company health.

The result of the RFQ process builds perception and provides valuable information:
•     Externally: Provides a strong indication to new but also to existing customers about the overall efficiency of the CDMO organization and the importance that the customer will receive from the CDMO.
•     Internally: Secures future sustainability, provides valuable information for Pricing policy efficiency, expected future pipeline and facilitates realistic but challenging internal targets setting.

An efficient RFQ process has to:

be standardized, fast and under control

• serve the CDMO strategy and facilitate profitable growth

• minimize offer preparation workload, facilitate project complexity management and monitor the process steps

• propose prices that increase probability of success and are within the desired/realistic profitability range

• provide competitive advantage and pass the right message to the customer

• facilitate statistical evaluation for strategic decision making

CDMOs (pure or integrated) have to make sure that the RFQ process gets the appropriate attention as it is one of the first cornerstones of their business and strategy sustainability.