Increasing pressure on the pharmaceutical industry to reduce cost and focus internal resources on "high value" activities is driving a trend to outsource traditionally "in-house" drug discovery activities. Compound collections are typically viewed as drug discovery's "crown jewels"; however, in late 2007, Johnson & Johnson Pharmaceutical Research & Development (J PRD) took a bold step to move their entire North American compound inventory and processing capability to an external third party vendor. The authors discuss the combination model implemented, that of local compound logistics site support with an outsourced centralized processing center. Some of the lessons learned over the past five years were predictable while others were unexpected. The substantial cost savings, improved local service response and flexible platform to adjust to changing business needs resulted. Continued sustainable success relies heavily upon maintaining internal headcount dedicated to vendor management, an open collaboration approach and a solid information technology infrastructure with complete transparency and visibility.