Life Sciences: Adapting to a new reality

After a pandemic-fueled, turbulent few years, life sciences companies are examining their spending, as tight regulation and other factors affect their real estate management. Enabling smarter procurement and embracing innovation are two keys to facing the future with confidence.

Same story, different solutions

As in most industries, inflation and supply chain disruption are two of the biggest challenges for life sciences companies. Even during stable periods, health and safety regulations and protocols make changing suppliers difficult. As a result, companies tend to adopt two key approaches: developing close supplier partnerships and optimizing current services.

In some cases, companies acutely focused on cost are willing to cut services to reduce OpEx. But this approach is not widespread, given the strict requirements of laboratories and manufacturing environments. Regulations mean that switching suppliers, common in many sectors, is more problematic here.

Post-pandemic re-evaluations

The COVID-19 pandemic increased pressure and scrutiny on the life sciences sector. The unprecedented demand for masks, gowns and other PPE, and the sudden, unrelenting need to combat the virus led to fluctuations between shortage and surplus.

Now that pandemic-related concerns have stabilized, procurement teams can address issues such as restocking supplies, maintaining hygiene standards and reducing costs. With labor costs as a key driver of inflation, exploring innovative solutions to automate daily processes is top of mind for many. 

Leading the way in ESG

Environmental, Social and Governance (ESG) regulations are becoming increasingly stringent, and organizations are under pressure to demonstrate tangible progress toward decarbonization. Indirect emissions (Scope 3) include supply chain components and tend to be the largest part of a company’s carbon footprint, which is why they’re in the spotlight like never before.

Life sciences enterprises are making sustainability considerations fundamental to supplier selection. Management tools hold suppliers accountable for their performance, including KPI scorecards that illustrate trends and identify improvement opportunities. Many companies are adopting performance-based contracts with economic incentives or penalties to ensure a high level of quality and service. Technology will allow procurement teams to measure and assess the impact of supplier performance against these KPIs.
Procurement teams typically are responsible for many of a company’s decarbonizing commitments. Attention to ESG initiatives has raised the profile of procurement organizations, which are increasingly recognized as instrumental in achieving sustainability goals, driving cost savings, and powering supply chains.

Smarter procurement means a better future

In life sciences, recognition is growing that procurement and corporate real estate (CRE) teams need greater alignment in developing real estate and facilities management strategies. FM procurement is critical for achieving ESG objectives and maintaining operational efficiency amid supply chain disruptions and heightened economic concerns.
As FM procurement leaders seek to improve their relationships with their CRE clients, procurement teams must provide the subject matter expertise to re-design and optimize services. Taking that approach is most effective for driving cost savings, quality, and innovation.

Find out more

CBRE FM professionals support labs, manufacturing, and critical environments for a broad range of Life Sciences companies, including pharmaceutical and biotech firms, contract research manufacturers, medical device companies and the genomics industry.