Today, there are over 16 million diabetic people in the United States who must test their blood sugar at least twice a day. Before the release of the TheraSense monitor, blood samples were drawn from the fingertips, which can be particularly painful because of the concentration of nerves in the area. The TheraSense technology marked a major breakthrough for potentially improving the quality of life of diabetic people.

Despite its technology advantages, TheraSense knew that its launch would be a difficult battle. The company had to manufacture custom glucose monitors, custom strips (which soak up the small amount of blood), lancets (which draw the blood), and lancing devices; acquire specialized packaging; and roll out all of these supplies across the country through both retailers and a variety of direct channels. TheraSense also had to build awareness among doctors and other health care practitioners

To accomplish this formidable undertaking, TheraSense made the decision to outsource all of its key activities but two: the sales force and the manufacturing of the proprietary strip. A variety of different suppliers, including what would become UPS Supply Chain Logistics, were enlisted to handle complex distribution through retail and direct channels, to manufacture the glucose meter, to manufacture the lancing devices as well as the lancets, to provide 24-hour customer service, and to operate the Web site and all e-commerce activities.

Holly Kulp, the company’s vice president of professional relations and customer services, explained:

We had limited resources and we wanted to get to market fast. So we decided to focus on our core competency. We needed our own sales force because of the specialized

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