In reducing costs for a customer, a contract manufacturer (CM) with specific areas of expertise can bring together the economies of scale and the fullest knowledge base for a specific product need. This then allows the customer to focus on its core competencies (marketing, sales or other technologies) while reaping the benefits (or avoiding the headaches) of manufacturing excellence and a lower cost structure.

Specifically in the areas of new product development and commercialization, there are two key factors which must be in place with a CM in order to achieve excellent results.

The first is expertise. This expertise must exist in several areas. Most critical is the need for the CM to have a complete understanding of both the material's (actives, excipients and packaging) functionality and manufacturability. Here a customer should understand the CM's relationship with its material suppliers. Does the CM have an integral relationship with their material suppliers or do they simply buy powder and put it in a capsule? A good purchasing manager does not replace scientific acumen and product knowledge. Other areas of expertise absolutely required for success are in the regulatory environment, quality systems, supply chain management and manufacturing improvement. These areas must be evaluated through facility tours, systems audits and

CM leadership discussions. This takes time and effort, but what more valuable investment can you make than in getting the right organization for your new product's success.

The second is clear communication and understanding. With the expertise mentioned above, a CM must be able to listen to a customer's concept or need and translate this into a viable and effect product. Again, time and effort must be invested by both the customer and the CM, but this investment made at this development stage of the process is the only way to avoid costly mistakes and product failures.

The result of this investment by the customer will be a timely launch of an economically optimized product meeting all the market requirements and claims. Along with this launch should come the ongoing confidence that the product will always meet quality and regulatory specifications, always be defendable against competitive (or other outside) challenges, always be supported by the CM in the face of future emerging issues and always be as economical as possible.

Jim Cudahy is president and COO of Sabinsa Corporation, a North American and international manufacturer of phytonutrients, Ayurvedic herbal extracts and specialty fine chemicals for nutritional, pharmaceutical and food industries. www.sabinsa.com

For more on contract manufacturing, read "Top tips for working with a contract manufacturer"...