| It is now a well-known fact that outsourcing has | | | | keep costs low while simultaneously increasing delays |
| become an integral part of the agrochemical and | | | | and administrative costs. Very often there are |
| pharmaceutical Industry resulting from the pressures of | | | | unexpected costs in a new business environment that |
| global competition. This especially applies to their | | | | were not anticipated and a quick venture can quickly |
| R&D activities. Initially, only Building Blocks were | | | | turn sour for all parties involved. Top management |
| being outsourced to third parties but this activity has | | | | expects remarkable savings at greater yields and |
| spanned to the degree where entire research projects | | | | middle management faces the frustration of being |
| are now being outsourced. The management | | | | caught in between and eventually bearing the bad |
| philosophy of “we’ve got to do it all in-house | | | | news of lower margins. The search resumes for a |
| maintaining top secrecy” has given way to | | | | fresh partnership resulting in the same repeated |
| “let’s do it all outside.” The major outsourced | | | | failures with increased losses and delays and a |
| activity is usually the synthesis of organic molecules. | | | | general disillusionment about the outsourcing practice. |
| First, simple Building Blocks were outsourced, then | | | | Initially, Mithros Chemicals offered a “service |
| simple libraries, then large libraries, then more | | | | product” like its competitors, in the form of mutual |
| sophisticated libraries, and now, whole aspects of | | | | coorperations with clients until it realized that this |
| medicinal chemistry are being outsourced to third | | | | arrangement, for the most part, led to increased costs |
| parties. | | | | and administrative difficulties for both sides thereby |
| Outsourcing not only provides significant cost savings | | | | defeating the very purpose of outsourcing. Following |
| for the company but it also provides a faster and less | | | | that, FTE’s or Full Time Equivalents were |
| complex approach to getting research done, keeping | | | | introduced which seemed to work better as clients |
| in-house resources focused on core business while | | | | had better control over their projects together with |
| providing greater flexibility. The types of outsourcing | | | | increased flexibility. |
| partnerships formed tend to vary from company to | | | | Prior to outsourcing, it is very important for a company |
| company. Some companies outsource research only | | | | to understand the outsourcing market within and |
| within their country’s borders to ensure greater | | | | without its borders, to analyse the key players in the |
| accessibility and confidentiality, while others have | | | | field and determine their strengths in order to match |
| reached far and wide in search of lucrative | | | | projects with compatible partners. Only then, can the |
| partnerships. Some have the outsourcing process | | | | long-term benefits of outsourcing or off-shoring be |
| completely centralized whereas others prefer it | | | | gleaned and sustained. While off-shoring, it is essential |
| completely decentralized, leaving the decision to | | | | to choose a partner who understands both worlds. |
| individual department heads. | | | | Taros Chemicals, for example has been in the |
| While contract synthesis companies have existed in | | | | contract synthesis area since 10 years and has |
| the west for at least a decade, some outsourcing | | | | worked with the major agrochemical and |
| companies had early insight into the eventual | | | | pharmaceutical companies with a seasoned |
| off-shoring of custom syntheses projects to countries | | | | understanding of what customers want. Taros is the |
| like India and China to beat growing research costs. | | | | only European company to have the privileged position |
| Although it sounded easy enough, only few survived | | | | of running its own laboratory in India with a central |
| the initial challenges of doing business across the miles | | | | logistical processing unit that tracks projects to ensure |
| and across business cultures that are as varied as it | | | | they are processed in a timely manner. |
| gets. One such company, a forerunner among its | | | | A client can optimise its process and reduce costs by |
| German counterparts, is Taros Custom Chemicals, a | | | | involving Taros in deciding which projects should be |
| well-known Dortmund-based outsourcing partner for | | | | processed by Mithros. Taros sources and provides |
| chemical, crop and pharmaceutical companies. Taros | | | | starting materials, managing projects closely from start |
| set up its extended laboratories, Mithros Chemicals, in | | | | to finish making it easy for partners to keep projects |
| the former pearl capital of India, Hyderabad, now | | | | cost efficient. There are no communication barriers |
| famous as India’s leading IT hub popularized by | | | | and cultural misunderstandings as projects outsourced |
| Microsoft’s presence there. | | | | to Mithros are managed by the german management |
| The founder of Taros Chemicals described this move | | | | team. Based on experience, Taros can select the |
| as a giant step towards providing its customers with | | | | project-flow and keep failure rate very low. There is |
| top quality research, increased capacities and timely | | | | also only a minimal of travel involved on the part of the |
| service at a far better price. Moreover, Taros’s | | | | contracting company saving both time and money |
| CEO, acted as a “human bridge” for German | | | | while facilitating optimal use of its internal resources. |
| clients wanting to outsource custom synthesis projects | | | | Delays are avoided through an excellent internal |
| to its subsidiary, Mithros, in India (A human bridge is a | | | | logistics system which optimizes raw material sourcing, |
| person who has roots in one country but has lived long | | | | processing and shipping for the Mithros site. As a |
| enough in another to understand its culture and modus | | | | result, projects are processed significantly faster than |
| operandi). The challenges therefore, of cross cultural | | | | the local service provider. When there are synthetic |
| business practices and the quintessential red tape | | | | difficulties the process is hauled to Germany for |
| were duly overcome. | | | | completion as the availability of Fine Chemicals is |
| While some companies prefer to work with FTE’s, | | | | higher and the project originally outsourced to India can |
| others choose to work on a molecule to molecule | | | | be completed without long delays and a better |
| basis. Matters get even more complex when a single | | | | success rate than if one were to depend solely on |
| project is splintered and sectioned to be handed off to | | | | Indian partners. |
| multiple contractors in different countries in order to | | | | |