Insourcing technical expertise in the pharmaceutical industry is another tool in the mix for bringing badly needed talent while minimizing risk and cost. The insourced resources can be highly skilled and experienced in their technical field, and work at the facility. However, they are not employees of that company but rather a third-party contract research organization (CRO). In addition, this staff can acquired at far less cost than full-time employees or temporary workers. (Gamble 2011)
Insourcing allows tighter control of quality and avoidance of hidden costs of outsourcing to China and India (Stanton 2014). “… it is not solely remediation and recalls that lead to question as to whether or not India and China are still cost-cutting economies as many firms do not factor in the hidden factory and supply chain costs…[which] include experimentation and process understanding, supplier training and tech transfer, process and product validation as well as ongoing expenses from delayed and incomplete deliveries, IP violation and long-lead times, all contributing to the “total cost of ownership”.
Cost is not the only advantage to the insourcing option. There are also real advantages in avoiding the high turn-over rate of temporaries. Turn-over in the insourced resources is minimized as they are full time employees with benefits and healthcare (just not from your company). In adidition, this staffing solution provides a flexibility similar to that offered by using temporaries while at the same time avoiding the risk of potential co-employment issues that temporary staffing entails.
Use of insourcing allows the company to focus on its strengths and available facility resources without becoming concerned with the quality of the technical support provided by the analytical chemistry and microbiology laboratories and EM staff. The insourcing company can frequently bring the laboratory function up as a turn-key operation supplying all needs (specific SOP, training, lab supervisor and bench workers) within the company’s existing Quality systems. This also provide the advantage of having a competent technical manager on-site to serve as a Subject Matter Expert as needed (not to mention the support team behind that supervisor from the CRO)
Insourcing offers a significant opportunity to reduce risk. Gamble described the supply chain risks inherent in the outsourcing model that can be eliminated by insourcing. Less obvious are risks arising from communication failures between distant facilities trying to work together. Insourcing R&D resources allows the entire project to be performed under a single roof without increase in headcount.
In brief, insourcing offers advantages in: