Ten Years In, African-American Firm Is Committed To Continual Innovation And Quality

- by Helene Saunders

In 2000, Neta Scientific Inc. started out as a diverse supplier. Since that time, the company has grown into a firm with more than $20 million in annual revenues. The bulk of the business is done in prime contracts with major pharmaceutical and life sciences companies.

Dr. Winfred J. Sanders, President and General Manager of the company, helped bring Neta to life. Leaving his own career in the pharmaceutical industry with Hewlett Packard behind, he and his partners struck out on a new path that took them to the top of the supply chain with many of their clients.

Seizing An Opportunity

Working in the industry, Sanders saw the need for a small, diverse supplier with the expertise and experience to really help those working in the pharmaceutical and life sciences. “Many companies were looking for quality and diversity in their suppliers and we thought that was an opportunity,” Sanders said now.

“We are technical. We’re scientists and engineers, and most of the people on our staff had worked with the instruments industries and so we knew the need from an end user side, too,” he added. This advantage in knowing the industry helped Neta position itself as a Tier One type supplier right from the start.

The company combined its personal expertise with technological savvy. “It used to be that you provided a physical catalogue and presented your pricing on spreadsheets,” noted Sanders. All of the human touchpoints in the process added costs to the supply chain. Even in 2000, Neta Scientific Inc. could see that embracing technology would give them a cost and efficiency advantage over other suppliers.

Meeting Customers In Their Channel

“We made the first priority when we got into business, that we had to be able to sell the products in channels where the customers were buying,” Sanders said. For the pharmaceutical industry, this meant online procurement and SRM systems such as SAP, Ariba, and PsyQuest.

“By capitalizing on the technology, we put ourselves on par with the other prime suppliers who were already up on the electronic systems. Being technology driven gave us a unique opportunity because a lot of companies did not have web sites, did not have punch out sites, were not on PsyQuest,” he added. Making the technology leap enabled Neta to be a serious contender for contracts despite their smaller size because they were as easy to deal with as any other major prime player. “Choosing us as a diverse supplier was as easy as turning a switch.”

Being in the right channel at the right time has continued to open doors for the company over time. As the use of online SRM systems has grown in the pharmaceutical and life sciences field, companies “have become very selective in choosing the suppliers they want to work with because now you not only have to have the assurance that the quality, the cost, and the innovation are there, but they also select suppliers on the basis of the value of what they bring to them and how you can integrate in their supply channels with your product,” Sanders noted.

Maintaining Strategic Partnerships

Another way that Neta has powered its growth over the last 10 years is by being selective and focused in its partnership building. “We don’t try to be everything to everyone. We try to stay on the Tier One side of the contracts.” Sanders said. It is a strategy that seems to be working, as 90 percent of Neta’s business is Tier One or Prime contracts.

Sanders also noted that within its partnerships, there are certain qualities that set the company apart from other suppliers, namely innovation, technology, flexibility, and ability to meet cost goals and other objectives. “We also bring a technical expertise that other suppliers, large and small, just don’t have. They just do procurement, but we understand the technology and functionality behind all the products we sell. We can talk to the end users in their language because we are scientists ourselves.”

Continually Innovating

The focus on science knowledge and technology makes Neta more willing to take on new technologies and showcase them to customers as a way to build business relationships. Sanders points out that in the pharmaceutical and life science industry, the innovation doesn’t come from the large players. The risks are high, and most are heavily invested in their legacy systems.

Being a smaller, more nimble player lets Neta Scientific Inc. pursue the most cutting edge methods to improve efficiency and costs. “Big guys don’t do the technology as fast as the small guys do,” Sanders said.

He likens large firms to major ships in the ocean that need a rudder to slowly steer, and his own company to a small boat that can change course quickly at minimal cost. They benchmark against major supply chain management and logistics leaders in all industries for ideas about how to innovate in their own supply chain. As one example, Neta leveraged Wal-Mart’s RFID warehouse management systems to create an on-site inventory management system for themselves and their clients.

Emphasizing Service And Quality

Along with their innovation and technological strength, Sanders feels that Neta succeeds because of their emphasis on service delivery and customer satisfaction. “We are not just a diverse business – we’re a good business. We have good business metrics, strong financials, and we provide you a very viable service. Diversity gets you in, but once you are in, you want to be looking at every opportunity to grow your brand and your business with that customer.”

GSK gave us our first big opportunity and we leveraged that relationship with other Pharmaceutical companies. He also cited a contract relationship with Merck as an example of a time when the company was able to make a break through thanks to the high quality of their service delivery. Neta had pursued Merck for a number of years to try and break in as a supplier, but Merck was concerned that the business they wanted to give to them was more than Neta could handle.

Positioning For Future Success

Sitting on their laurels is not Neta’s style. To meet their near-term goals, the company is committed to growing in the niches where they feel there is profitable growth and they can create value for their clients. As a part of that, Neta is continuing to build its international partnerships.

In some cases, this means establishing itself as a supplier manager for international firms looking to break into the U.S. market. This is a service Neta also provides for smaller firms that can’t break into the pharmaceutical market on their own but that have a value proposition to bring to Neta’s existing business relationships with large firms.

Sanders feels this moves in sync with two trends that he sees in the pharmaceutical industry: a bundling and reduction of supplier relationships, and the emergence of the international markets. They have set up Neta Systems to handle Tier Two contracts, and continue to build their Tier One connections and service offerings.

“Even with the health care bill and all the regulations coming down, the pharmaceutical industry learns to adapt very quickly and we’re going to have to adapt with them. If it means extending ourselves a little beyond our core competencies, we’re open to it. We’re not locked into any one paradigm,” said Sanders.

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